Jay Auerbach, a real estate attorney with Khani and Auerbach, sent me this informative email about how closings are going to be changing in August:

At Khani & Auerbach we are prepared to meet the challenges that lie ahead in the coming year. One such challenge includes new rules adopted by the Consumer Finance Protection Board (“CFPB”). If you are unfamiliar with these new rules, the “CFPB” is requiring the use of a new Closing Statement for real estate transactions that include the initiation of a loan application on or after August 1, 2015. The changes will require closing/settlement agents, like my firm, to work differently with all parties related to the transaction to insure that we are able to close without unnecessary stress or delay.

Replacing the HUD will be a Closing Disclosure (“CD”).  The CD will include all of the final costs between the buyer and the seller, or a borrower in a refinance transaction. The most drastic change in the law requires the lender to provide the CD to the borrower/buyer no less than three (3) business days prior to closing.  This requirement is not negotiable by any party.

Please note, that the lender is required to deliver the CD. The lender may rely on my firm, as a settlement agent, to deliver the CD. However, it is more likely that the lender will handle this task itself. Therefore, my firm, working in conjunction with you, must be ready to provide all necessary information to complete the CD. All information required by the lender must be gathered at least two (2) weeks earlier in the process then what has previously been customary. This information includes, but is not limited to, taxes, Condo/HOA fees, survey costs, inspection fees and any other third party costs. As a result of these changes in the law, our firm will need to modify its closing process to ensure that all third party vendors understand these changes.

What does that mean for the consumer?

Remember how much you hated that you got your HUD the day of closing and then had to scramble to review it, get the funds from your bank and get to closing?

Those days will be over as these new rules go into effect later on this year. This will cause longer closing schedules. So if you thought a 30-45 day closing was long, be prepared, they are going to get longer…