The new federal home loan disclosure rules designed to give borrowers more time to review documents are causing increasing closing times for some home loans and hitting some borrowers with higher lending fees, according to Daniel Goldstein of MarketWatch.

As of Oct. 3, a rule set forth by the Consumer Financial Protection Bureau required that loan disclosure documents must combine the information required in the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). Under the new rule change, known as the “Know Before You Owe” rule, or the TILA-RESPA Integrated Disclosure (TRID) regulation, consumers must be given the new combined Closing Disclosure (CD) with all the charges, fees and line items three days before the closing, rather than at the closing on the HUD-1 form, which is no longer used.

“The new rules are the reason I drink,” said Joe Parsons, a senior loan officer at mortgage lender PFS Funding in Dublin, Calif. Parsons said because the new federal home disclosure rules are now extending closings by a week or more, some of his clients have to pay extra to lock in the interest rate on their home loans for 45 or even 60 days, instead of the typical 30-day period that it takes to close a loan.

Read more >