Among concerns about the new integrated disclosures is a new disclosure for total interest as a share of the loan amount and unexpected increases in fees with no tolerance.
In August, separate disclosures currently required under the Truth in Lending Act and Real Estate Settlement Procedures Act will be integrated.
The upcoming change was discussed at the
TILA/RESPA Integrated Disclosures: Closing the Door on the HUD-1 settlement statement session held during TechMecca 2015.
The conference is being
hosted this week at the Dallas Omni by the Independent Bankers Association of Texas.
Among the presenters was Georgette King.
She noted that one section of the Loan Estimate requires a disclosure of the total loan interest percentage. This is calculated by taking the total interest to be paid over the life of the loan and dividing it by the loan amount.
“I think this is going cause some heads to turn,” King stated. “…I think that is going to be a big discussion point for a lot of borrowers at closing. They’re going to say, ‘what is that?'”
Sellers don’t have to sign the borrower’s Closing Statement, according to King.
She explained, however, “I think that’s going to — when you have to have that seller’s HUD at closing — it’s going to bring out some, you know, ‘how are they going to handle that?'”
King predicted that more discussion will take place about seller signatures.
An audience member highlighted how appraisal fees are surging past what was estimated — leaving the lender to eat the difference. This is costing “an incredible amount of money.”
He went on to describe various scenarios where the appraisal fee unexpectedly jumps.
One of the session’s organizers highlighted the impact from integrated disclosures.
“You’re on the hook for everything now. Any numbers that are incorrect like that — you get to write the check,” he said. “You can’t point to the title company or something like that.”
He added that both Wells Fargo and Bank of America have announced that they have each decided to do their own closing disclosures.
