Closing Delays from TIL-RESPA Integrated Disclosure

In Real Estate by Tramontozzi Law

The new integrated disclosure forms to be used by mortgage lenders is set to begin next week (October 3, 2015).  The new forms are designed to simplify the information provided by lenders and to make fees and other costs easier for consumers to understand. Massachusetts home buyers and sellers should be aware that there may be closing delays from TIL-RESPA integrated disclosure.

New Forms to Be Used

There are two new forms that will be used. One is provided to borrowers after mortgage application and the other just before closing.

Loan Estimate Form – This replaces the good faith estimate and truth-in-lending disclosure forms. The loan estimate form provides detailed information on mortgage terms, closing fees, estimated monthly payments on the loan, and other critical information. It must be provided to borrowers within 3 days of mortgage application.

Closing Disclosure Form – This form combines figures previously provided in teh HUD-1 and Truth-in-lending disclosure documents. It details applicable fees organized by category and any pre-paid items. This form must be provided at least 3 days before closing.

Potential Closing Delays from TIL-RESPA Disclosure

Given that the closing disclosure form document must be provided 3 days before closing, there is a possibility for delays. Certain information is required to complete the form. Although most of the data comes from the lender, information may be required from the buyer, seller, or attorneys involved. Therefore, all parties must act diligently and provide requested information in a timely manner to ensure that the closing takes place as scheduled.

Some Realtor organizations, such as the Massachusetts Association of Realtors, have gone so far as to provide a specific addendum to the Purchase and Sales Agreement on this matter. The addendum explains that there are new forms and rules in place and that buyers and sellers have certain obligations to ensure an on-time closing. By signing the form, buyer and seller also acknowledge the potential for closing delays in light of the 3 day requirement.

Questions on the New TIL-RESPA Disclosure

If you have any questions about the new TIL-RESPA disclosure or about an addendum that you may be asked to sign relating to it, give us a call. We are Massachusetts real estate attorneys and represent both buyers and sellers. We would be happy to review information on your behalf and ensure that your best interests are protected.