New GFE Forms on July 31st?

You may have heard lenders talk about starting to use new GFE rules at the end of July (and this may have caused you to hyperventilate just a bit).  It is highly unlikely, however, that they’re talking about the new GFE required under RESPA reform.  You know the one, the much dreaded GFE that triggers the use of the new HUD-1 form.
 
We’ve talked some about the alphabet soup of reform that’s going on right now.  The new TILA provisions (sometimes referred to as MDIA Rule) rule are getting ready take effect, and there are new requirements around GFE issuance, but it doesn’t require the new form.  Here’s a brief overview of what’s coming at the end of July...
 
Applications taken after July 29th require lenders to deliver the good faith estimate (GFE) to the borrower within three business days AND they cannot collect any fees before delivery - except for the credit report.  The new rule also requires lenders to “wait seven business days after they provide the early disclosures before closing the loan,” according to the Federal Reserve Board.  If the financing charges or APR changes, the lender must provide a new Truth In Lending disclosure with the revised APR “and wait another three business days before closing the loan.”  The three-day waiting period can be waived by consumers in emergency situations - such as a foreclosure.
 
So if you hear of someone “using the new forms” at the end of July, please ask them more questions (or call me and I’ll be glad to ask them).  Chances are they are making the immediately required TILA changes, not the 2010 RESPA changes.  You need to know what the TILA changes are and how they impact your transactions, but I think it is safe to put the brown paper bag aside… at least for now.