Major Change to RESPA 3-Day Waiting Period

In producing the new RESPA/TILA rule, the Consumer Financial Protection Bureau (CFPB) listened to NAR to nix a broad 3-day waiting period when there are changes to the closing disclosure.

NAR had argued for nearly three years that CFPB should focus on harmonizing the upfront disclosures, the Good Faith Estimate (GFE) and the Truth in Lending disclosure (TIL) and not fundamentally change the settlement process by implementing the 3-day waiting period for Today's HUD-1. CFPB essentially maintained the TILA aspects of the three-day waiting period—requiring a new disclosure and tolling period if the Annual Percentage Rate (APR) changed by one eighth of a point, if the loan type changes, or other significant changes to the loan itself like if a prepayment penalty is added.

This is a major change from what was proposed where even minor changes to the closing documents could have required a new 3-day waiting period. NAR will continue to work with CFPB to fine tune the rule and obtain guidance. The rule becomes effective in August 2015.