respa changes

The Consumer Financial Protection Bureau (CFPB) implemented changes to simplify the forms and terminology used in most mortgage applications. These changes, enacted in October 2015 under the Real Estate Settlement Procedures Act (RESPA), aim to make the mortgage closing process more transparent and easier for homebuyers to understand.

What has changed?

• New forms: The Good Faith Estimate (GFE) and the HUD-1 Settlement Statement have been replaced with the Loan Estimate and the Closing Disclosure.
• Standardized terminology: The new forms use consistent language across lenders, making it easier to compare loan offers and understand the closing costs associated with your mortgage.

What does this mean for you?

You might notice these changes at your next real estate closing. The Loan Estimate will provide you with a clearer picture of your estimated loan terms, including interest rates, closing costs, and monthly payments. The Closing Disclosure will offer a final breakdown of the actual settlement charges you'll be responsible for at closing.

Understanding the Importance of Title Insurance

While the RESPA changes focus on simplifying the closing process, it's important to remember that they don't replace the need for title insurance. An Owner's Policy of Title Insurance protects you from unforeseen financial losses resulting from ownership defects or hidden claims on your property.

Learn More:

Click on the links below to learn more about the CFPB's RESPA changes and the benefits of Owner's Title Insurance:

• CFPB Title Information for Consumers at Stewart Title
• CFPB Title Information for Consumers at Old Republic Title