“CFPB issues proposals to update Integrated Disclosure Rule.” Say what? Read on!


The Consumer Financial Protection Bureau recently published recommendations for updating the Integrated Disclosure Rule, which is under the Truth in Lending and Real Estate Settle Procedures Acts.

The rule’s purpose is to supply easy-to-understand disclosures for borrowers when they complete a residential mortgage application. The CFPB proposed two changes to the Integrated Disclosure Rule:

One change is in regard to construction loans. Given the longer time it takes to close one of these loans compared to other loans, the estimated charges can change after 60 days.

“Our proposal would create a space on the Loan Estimate form where creditors could include language informing consumers that they may receive a revised Loan Estimate for a construction loan that is expected to take more than 60 days to settle,” the CFPB said.

The second change would give creditors more time to give borrowers a revised loan estimate after the latter locks in a floating interest rate. The current turnaround period is limited to the same day, and the CFPB proposed extending that time to the next business day. This strategy would give creditors adequate time to produce new disclosures while giving borrowers more time to lock in their rates.

Mortgage market becomes more favorable. The CFPB’s proposed changes to the Integrated Disclosure Rule are welcome news for consumers who want to get a US home mortgage while clearly understanding their obligations in receiving financing to buy a home. Although borrowers will have to wait until Aug. 1, 2015 to see the rule in affect, they currently can get some relief in getting a mortgage via low interest rates. Here are the findings of the latest Primary Mortgage Market Survey by mortgage insurer Freddie Mac:

·        The average interest rate for a 30-year fixed mortgage was 3.97% in the week ending Oct. 16, down from 4.12% the previous week and marking the first time the average fell below 4.00% since June 2013.

·        Fifteen-year FRMs’ average interest fell from 3.30% to 3.18%.

·        For 1-year Treasury-indexed adjustable-rate mortgages, the average rate was down four percentage points to 3.28%.

·        Five-year Treasury-indexed hybrid ARMs dropped below 3% to stand at an average of 2.92%.

Freddie Mac Vice President and Chief Economist Frank Nothaft attributed the drop in mortgage rates to investors’ skepticism regarding economic volatility in Europe.

Academy Mortgage is one of the top independent purchase lenders in the country as ranked in the 2013 CoreLogic Marketrac Report. Visit www.academymortgage.com to find a loan, get a rate, or calculate your payment today.


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