When the Consumer Financial Protection Bureau’s (CFPB) final RESPA/Truth in Lending Act (TILA) integrated mortgage disclosure form rule goes into effect, it is going to bring with it many changes to lending and closing processes. One of these changes is who has the responsibility of providing the Closing Disclosure to the consumer. In part two of this multi-part series, RESPA News reviews Closing Disclosure responsibility and liability, as well as tolerance levels and changed circumstances.
Who provides the Closing Disclosure?
Currently under Regulation X, the settlement agent prepares the HUD-1 settlement statement.
When the bureau released its proposed rule in July 2013, it requested comments from the public regarding two alternatives regarding who should provide the Closing Disclosure to the consumer:
1) The creditor provides the Closing Disclosure; or
2) The settlement agent provides the Closing Disclosure but the creditor has the liability.
The final rule states that the creditor will provide the Closing Disclosure, but allows settlement agents to provide the disclosure as long as the agent complies with all of the regulatory requirements.
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