Financial Crimes Enforcement Network (FinCEN)įor Immediate Release ALTA Requests Three Changes to CFPB’s New “Your Home Loan” Consumer Toolkit.The Toolkit can also be provided in electronic format. Lenders can add their logo and contact information to the Toolkit if they so choose. The CFPB has created two sizes for the Toolkit: 1) a letter size version and 2) a version designed to fit a typical business envelope. The Toolkit can be purchased through a mortgage document vendor or the U.S. 62 notes that the CFPB encourages all market participants “to provide the to consumers at any other time, preferably as early in the home or mortgage shopping process as possible.” 2(a)(6) as “a day on which the creditor’s offices are open to the public for carrying on substantially all of its business functions.” Although the Toolkit must be provided not later than three business days after receipt of an application, Federal Register Vol. Lenders are required to disclose the Toolkit to consumers not later than three business days after receipt of an application. The consumer is introduced to a brief overview of HELOCs and refinancing options. Understand Home Equity Lines of Credit and refinancing.The consumer is asked to explore their flood insurance options at. Determine if you need flood insurance.The consumer is reminded about home maintenance and repairs, and for compensating for taxes and homeowner’s insurance if they do not have an escrow account.
The consumer is given information on how to contact their mortgage servicer.
The consumer is given a detailed breakdown of the five page Closing Disclosure. Understand and use your Closing Disclosure.The consumer is educated about how the Loan Estimate can change. This part explains shopping for closing agents, title insurance, home inspectors, and home appraisers. Section 2 explains the closing process to the consumer. The consumer is given a table with hypothetical pitfalls and problems, including advice on how to deal with these situations if they arise. The consumer is informed about their intent to proceed and rate locks. The consumer is asked to make a list of several lenders, getting the facts from the lenders on their list, obtaining at least three written offers, and, finally, comparing the total loan costs. The consumer can reference a chart that compares three points scenarios which affect the monthly payment over the life of the loan. Understand the tradeoff between points and interest rate.The consumer is educated about different down payment options and the possibility of having PMI on the loan. Choose the right down payment for you.The consumer is asked to choose between a fixed rate or an adjustable rate mortgage. Pick the mortgage type that works for you.The consumer is asked to weigh their options on whether to use their current credit rating or wait to improve their credit rating. The last step establishes what monthly home payment the consumer will be comfortable paying. The third step calculates what is left after subtracting their monthly debts such as car payments, student loan payments, credit card payments, and child support or alimony.
The second step estimates the percentage of their income spent on a monthly home payment. The first step calculates their total monthly home payment, including principal and interest, mortgage insurance, property taxes, homeowner’s insurance, and applicable HOA or condominium fees. The consumer is asked to fill out a worksheet in four steps.
Section 1 helps the consumer choose the best mortgage for their situation. The Toolkit is divided into three sections: The aims of the Toolkit are: 1) to notify consumers of the steps they need to take to get the best mortgage for their situation 2) to help consumers understand their closing costs and what it takes to buy a home and 3) for consumers to understand how to be successful homeowners. The Toolkit is to be disclosed in conjunction with closed-end loans for the purchase of 1-4 family residences, condominiums or townhomes. When the TILA-RESPA Integrated Disclosure Rule goes into effect on August 1, 2015, the HUD “Shopping for Your Home Loan: Settlement Cost Booklet” will be replaced with the CFPB “Your home loan toolkit: A step-by-step guide.” This new Toolkit satisfies the RESPA requirement per 12 CFR §1024.6 and the new TILA requirement per 12 CFR §1026.19(g).