beginning August 1, 2015. This Federally required Settlement Statement showing the actual settlement costs of a real estate transaction will be replaced with the ‘Closing Disclosure‘ form. The HUD1 has slowly changed over the years since the RESPA Act of 1974 first required the closing document. The new ‘Closing Disclosure’ form is now referred to as the ‘CD’ in real estate discussions. The required use of ‘CD’ is the result of the new rules of the Consumer Financial Protection Bureau (CFPB). The CFPB was created by the ‘Dodd Frank Act‘ in 2010. Also, beginning August 1, 2015, The ‘Good Faith Estimate’ provided by your mortgage company will be replaced by the ‘Loan Estimate’, now referred to as the ‘LE’.
REQUIREMENTS: The most important change in real estate transactions nationwide, is that the ‘CD’ is required to be in the hands of the buyer and seller three days prior to closing. No more showing up to closing and seeing the closing documents for the first time. This should improve and make closing go smoother. With the ‘LE’, it is required to be in the hands of the buyer within three days after making application for the loan.