The Consumer Financial Protection Bureau this week finalized changes to the “Know Before You Owe” mortgage disclosure rules. The changes were proposed in October and address (1) when consumers will receive updated disclosures after locking in an interest rate and (2) how consumers receive information regarding certain construction loans. The final rule is posted here.
The Hill summarized the changes:
The new rule, gives creditors more time to draft disclosure forms. Now, creditors have three days to provide a revised loan estimate once a consumer locks in a floating interest rate. Previously, the loan estimates were due on the day the rate was locked.
Another change will give creditors more leeway in revising estimates for construction loans. Because construction loans take longer to settle than other loans, the CFPB said estimated charges often change. Under the new rule, there is a space on the loan estimate form where creditors can notify consumers they could receive a revised estimate if the loan does not settle in 60 days.
The rule will become effective on August 1.