Last week, the clarification that the Consumer Financial Protection Bureau (CFPB) had released one year ago, went into effect.
This action made it official that it is acceptable for real estate professionals to receive a copy of the closing disclosure from lenders, according to the National Association of Realtors® (NAR).
This is great news for consumers, because mistakes and omissions are more likely to occur when real estate agents aren’t given the chance to see the information during the transaction, according to research conducted last year by NAR.
Here is more from FloridaRealtors.org:
“Real estate agents traditionally have used information in the disclosure form to advise their clients during transactions. But about two years ago, the CFPB made sweeping changes to the settlement process, and some lenders stopped making the form available to agents due to privacy concerns.
NAR has been working with CFPB for a while to clarify a procedure for real estate professionals to receive the closing disclosure, arguing that nothing in this type of procedure would affect CFPB’s privacy rules for lenders.
The final rule “again made clear that lenders may share disclosures with third parties, including real estate agents,” NAR President William E. Brown said after CFPB finalized the rule. “This was common practice for years in advance of Know Before You Owe (the CFPB rule that caused the issue), and Realtors are eager to see that cooperative atmosphere take hold once again.”
“Know Before You Owe,” the name of CFPB’s procedures, was developed two years ago. Under those changes, a form called the Loan Estimate replaced the Good Faith Estimate, and the Closing Disclosure replaced the HUD-1.
The changes also added other requirements and imposed timelines for when borrowers are to receive the closing documents for review. They also address what to do if there are material differences between the Loan Estimate and the Closing Disclosure.”
You can view the update in its entirety here: Amendments to Federal Mortgage Disclosure Requirements under the Truth in Lending.
Source: Robert Freedman, Realtor® Magazine