New Real Estate Closing Rules Begin August 1, 2015

New real estate closing rules are scheduled to take effect August 1, 2015. The new rules affect a number of important aspects of closing concerning the Good Faith Estimate (GFE), Truth in Lending Disclosures, and the HUD-1. Learn more about the upcoming changes in our blog.


Changes are coming to the settlement/closing process.

New Real Estate Closing Rules

The new rules are being instituted by the Consumer Financial Protection Bureau as result of new procedures of the Dodd Frank Act.

The Loan Estimate form, or “LE”

A new Loan Estimate form (LE) will take the place of the Good Faith Estimate (GFE) and Truth in Lending disclosures. “The Loan Estimate must be delivered to the prospective buyer no later than three business days after receiving the application,” according to the NAHB.

The Closing Disclosure

The Closing Disclosure (CD) will take the place of the final Truth in Lending Disclosure and HUD-1 Settlement Statement. “The Closing Disclosure must be provided to the consumer a full three days prior to the closing, and if there are changes during that 72-hour period, the closing could be delayed.”

What does this mean for homebuyers?

The new rules are designed to make the loan application process more streamlined and easier to understand for consumers, says the NAHB. All of the most important details, including “the interest rate of the mortgage loan, the amount of the monthly payments and a listing of all the closing costs,” will be listed on one page.

In addition, “For consumers applying for adjustable rate mortgages, the documents will explain how their interest rate and future monthly payments could change based on certain factors.”


To review, here are the key points of the new real estate closing rules. For a more detailed look at what’s changing, please see the NAHB’s Key Information on New Mortgage Lending Disclosures, and TILA-RESPA Integrated Disclosure Changes.

  • “For mortgage applications submitted on or after August 1, 2015, consumers must receive a Loan Estimate (LE) no more than three business days after applying for a mortgage loan and a Closing Disclosure (CD) at least three business days prior to closing on the loan.
  • “The new disclosure documents replace the Good Faith Estimate, the Trusth-in-Lending Statements, and the HUD-1 Settlement Statement.”

Real Estate Closing Services from Colony Title Associates

Colony Title has been in business since 1995 and handles more than 2,000 real estate closings per year. If you have any questions or would like to speak to a representative about closing, please give us a call at 410-884-1160 or visit our website for more information.

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