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Mortgage loans are originated under two sets of rules: The Truth in Lending Act (TILA), which was created and enforced by the Federal Reserve Board and the Real Estate Settlement Procedures Act (RESPA), created and enforced by the U.S. Department of Housing and Urban Development (HUD).
Each set of rules require a different disclosure. The TILA rules require the TILA disclosure, which contains the loan's Annual Percentage Rate (APR) and the RESPA Rules require the Good Faith Estimate (GFE).
The Dodd Frank Act required the Consumer Financial Protection Bureau (CFPB) integrate the mortgage loan origination rules contained in TILA and RESPA into one set of rules, with one combined set of disclosures.
The mission was accomplished on November 20, 2013 when the CFPB published 1,888 pages of combined rules and disclosure forms which will be required to be used to process loan applications received on or after August 1, 2015.
The new combined disclosure form provided at the beginning of the transaction is called the Loan Estimate and it replaces the TILA disclosure and GFE. The form used at the end of the transaction was named the Closing Disclosure and it replaces the final TILA and HUD–1 settlement statement.
Finally, the industry has a single set of rules for loan origination and loan closings. To view the new rules and new forms visit the Regulations section of the CFPB website at www.consumerfinance.gov.
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