Know Before You Owe mortgage closing rules.

Started by RichardP13 • 4 replies • 1966 views

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RichardP13 (California)
Posts: 3,868

Posted:

A new rule by U.S. Consumer Financial Protection Bureau scheduled to take effect on October 3, 2015. Details below:

www.consumerfinance.gov/knowbeforeyouowe

TimB4 (Tennessee)
Posts: 21,062

Posted:

The rule actually took effect on August 1, 2015 (even though it was adopted in November of 2013).
See the full text: RIN 3170-AA19

It did change the HUD-1 form. Here is the new form: Settlement Statement (HUD-1)

Keep in mind that the forms and examples were drawn up in 2014. However, in the appendexe to Mortgage Letter 2015-01, says that mortgage insurance continues for the life of the loan if less than 10% is paid down (LTV>90%).

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By TimB4 on 08/17/2015 2:20 AM
mortgage insurance continues for the life of the loan if less than 10% is paid down (LTV>90%).

A very good incentive to refinance once the buyer has sufficient equity.

The FHA loan we took out in the depths of the real estate melt-down in 2011 required us to pay mortgage insurance. Three years later prices rebounded and we found ourselves with a home whose value had doubled. We refinanced to get rid of the mortgage insurance and found that our new interest rate was a full one percent less than the old one. My advice is to suck it in and pay the mortgage insurance if you have to but refinance as soon as possible to get rid of it.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By TimB4 on 08/17/2015 2:20 AM
The rule actually took effect on August 1, 2015 (even though it was adopted in November of 2013).
See the full text: RIN 3170-AA19

It did change the HUD-1 form. Here is the new form: Settlement Statement (HUD-1)

Keep in mind that the forms and examples were drawn up in 2014. However, in the appendexe to Mortgage Letter 2015-01, says that mortgage insurance continues for the life of the loan if less than 10% is paid down (LTV>90%).

The rules was to take effect August 1, 2015, but there was a proposal to delay until October 3, 2015. Don't know if the delay was granted. In reading my article from CAI, it would appear that the delay was granted. Who know?

RichardP13 (California)
Posts: 3,868

Posted:

Below was posted on the CAI National website for a webinar they are hosting next Wednesday:

The U.S. Consumer Financial Protection Bureau's Know Before You Owe mortgage closing rule becomes effective on Oct. 3. The new federal rule sets in motion sweeping changes to the disclosures borrowers receive about their mortgage loans and closing costs when buying or refinancing a home. Community associations and their managing agents will be required to provide very specific and accurate information earlier in the process. Learn about the new requirements and ask questions to help incorporate these new rules into everyday practice.

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