Last year the Consumer Financial Protection Bureau created the new “Know Before You Owe” forms that are due to take effect in August 2015. Easy HUD, Easysoft’s real estate closing program, will undergo significant changes to accommodate the new law.
New Forms To Protect Consumers
Much as the Good Faith Estimate form was created to allow consumers to be able to compare loans easily, the new CFPB forms are meant to give borrowers the information needed to make informed decisions when shopping for real estate loans. There will be two new forms:
- The Loan Estimate will replace the Good Faith Estimate and provide a summary of the loan conditions, closing costs and other information consumers need. As with the GFE, this form will make it easy to shop loans so consumers can find the best deal.
- The Closing Disclosure will replace the HUD 1 settlement sheet and will serve the same function, giving a detailed listing of all closing costs associated with a specific loan closing. This form will be provided shortly before closing to give borrowers time to look over the final costs, make sure they are getting the deal expected, and ask any questions about the figures involved.
The CFPB hopes the new forms will help consumers better understand short-term and long-term costs, risk factors, and the true impact of monthly payments over the course of the loan.
Free Easy HUD Update
Next year Easysoft will update Easy HUD, our GFE and HUD-1 software, to reflect the new forms. Active Easy HUD subscribers will receive the update for free as part of our ongoing support commitment.
Watch the Easysoft blog over the next few months as we explore some of the changes that the new forms will bring to the real estate industry. We’ll look at how the new forms protect consumers, and how they will affect closing.
The Easy HUD update is an example of how we stay abreast of changes in the law so that our software always reflects the latest regulations, requirements and government forms needed for your real estate practice.