New escrow disclosure forms have been introduced in the hope that they will help simplify the complex process of taking out a loan. The Consumer Financial Protection Bureau (CFPB) refers to the new disclosure forms as the “Know Before You Owe” forms. The new disclosure rules grew out of the Dodd-Frank Act requirements that addressed two sets of disclosures that consumers usually receive under the Truth in Lending Act (TILA) and Real Estate Settlement Practices Act (RESPA) in connection with application for and closing of mortgage loans.
The new “Closing Disclosure” replaces the Housing and Urban Development settlement statement (HUD-1) and final Truth in Lending (TIL) statement that must be provided to the consumer at least three business days prior to loan closing.
The new escrow disclosure forms will be used for all loans closing after August 1, 2015. You can view a sample of the new forms and learn more about the rule at the CFPB website.