HUD-1 Going Away: Understand New Closing Forms, Procedures
The HUD-1 settlement statement and Good Faith Estimate forms are going away on August 1. The Truth in Lending Act disclosure is going away as well. In their place will be a new closing disclosure and a new loan estimate. There will be changes to the closing process as well, including a new rule requiring everything to be in place three days prior to closing. And last-minute changes face new hurdles. Learn about the changes in this walk-through.
There are also new rules for the closing procedure. One rule requires all forms to be ready three days prior to closing. NAR is recommending you actually get everything ready seven days prior to closing, so when you go into the three-day period, you don’t have to make any changes. Because making changes as the clock winds down comes with a cumbersome set of hurdles.
What this means is, you and the other settlement service providers, including the lender and title agent, are under the gun to get everything squared away earlier than you have to today. And the buyers and sellers have to be cooperative as well, because if last-minute changes are made, a new three-day waiting period kicks in, at least in some cases.
The good news is, you have until August 1 to get familiar with the new forms and learn about the new closing procedures, and NAR is hosting a series of webinars on the topic. To learn when the next one is, go to Realtor.org/respa.
The video above, with Ken Trepeta of NAR Government Affairs, provides a concise overview of what to expect and also shares some tips on how to decrease the likelihood of snags in this new environment.
The CFPB’s goal in making these changes is to increase transparency for consumers. Start your education process by accessing the 5-minute video.
Houtan is a seasoned professional with nearly 20 years in the real estate and mortgage industry, and past President of the California Association of Mortgage Professionals. An entrepreneur at heart, he co-founded CRESTICO, a boutique Real Estate and Mortgage Brokerage firm in Los Angeles, CA, revolutionizing real estate and mortgage lending with a focus on client needs and compliance. His expertise spans from sales to strategic market expansion and navigating regulatory landscapes. A thought leader, Houtan contributes to major industry publications and is a Freddie Mac SmartCredit coach, influencing financial services and community initiatives alike.
