Well, the wait is over. After 16 months and much anticipation, the Consumer Financial Protection Bureau (the “CFPB” or “Bureau”) released a 1,888-page final rule on November 20, 2013 to combine mortgage disclosures required under the Real Estate Settlement Procedures Act (“RESPA”) and the Truth in Lending Act (“TILA”).  With an August 1, 2015 effective date, the anxiety for lenders, title companies, and real estate brokers has just begun.
The final rule is the result of several years of government focus on the disclosures that consumers receive regarding the terms and costs of a mortgage loan. In November 2008, the U.S. Department of Housing and Urban Development (“HUD”) amended Regulation X, which implements RESPA, to require a new Good Faith Estimate (“GFE”) and HUD-1 Settlement Statement (“HUD-1”). These amendments required, for the first time, a particular form for the GFE and introduced new restrictions on increases to disclosed fees. Shortly thereafter, the Federal Reserve Board issued its own proposal to make sweeping changes to the Truth in Lending (“TIL”) disclosures for closed-end mortgage loans. These disclosure forms, however, contained overlapping information, inconsistent language, and proved burdensome for lenders to provide and consumers to understand.
Enter the Dodd-Frank Wall Street Reform and Consumer Protection Act, which directed the new CFPB to combine consumer disclosures in connection with mortgage loans under RESPA and TILA. For over three decades, RESPA and TILA had required two different disclosure forms at the time of a loan application and shortly before a loan closing. On July 9, 2012, after months of form prototype development and consumer testing, the CFPB issued a 1,099-page proposed rule to amend RESPA and TILA regulations to require a new Loan Estimate form and Closing Disclosure form in place of the GFE, HUD-1, and early and final TIL disclosures. In addition, the CFPB proposed to amend the definition of finance charge to remove most of the existing exclusions in order to create an “all-inclusive” finance charge calculation. After 2,800 public comments on these proposals and more consumer testing, the CFPB has finalized the requirements for the new Loan Estimate and Closing Disclosure forms. Not surprisingly, the final rule closely mirrors the original CFPB proposal. Nevertheless, the long road of revising technology, training employees, and implementing the forms starts all over again.
This client alert highlights the key changes made by the Bureau’s final rule, with a focus on the requirements for completing and providing the Loan Estimate and Closing Disclosure. With many other issues impacted by the final rule, K&L Gates LLP plans a series of subsequent client alerts to drill down on important considerations for the settlement service industries.
I. GFE + Initial TIL = Loan Estimate
For loan applications received as of the effective date, a mortgage lender will no longer be required to provide both a GFE and initial TIL. Instead, the final rule directs a mortgage lender to provide a single disclosure known as the Loan Estimate in all closed-end consumer credit transactions secured by real estate other than reverse mortgages. Under a new Section 1026.19(e) in Regulation Z, a lender must provide the three-page Loan Estimate within three “business days” of receiving an “application,” but no later than the seventh business day before closing. In addition, a lender must make all fee disclosures on the form in “good faith,” which for many fees, means that the actual fees charged to the consumer at closing must be the same as those originally disclosed. Many of the requirements related to completion and provision of the Loan Estimate will be familiar, either because they conform to existing requirements related to fee estimates on the GFE or recreate loan term disclosures required under TILA. However, as each line and section of the Loan Estimate form is governed by detailed instructions in the final regulations, mortgage lenders are facing a steep learning curve. Below, we highlight certain of the requirements related to the Loan Estimate form.
A. Uniform Application Definition
With the revisions to Regulation X in 2008, mortgage lenders are used to certain pieces of borrower information constituting an “application” and triggering early disclosures. However, lenders presently rely on a catch-all provision for “any other information deemed necessary by the loan originator to make a credit decision” to craft their own definition of application for purposes of providing meaningful GFE and early TIL disclosures to consumers. The CFPB has removed this discretion before providing a disclosure and finalized a uniform definition of “application.” Under the final rule, a lender has received an “application” triggering the Loan Estimate disclosure requirement when the lender receives the following six pieces of information: (1) name; (2) Social Security number; (3) income; (4) property address; (5) property value estimate; and (6) mortgage loan amount sought. Despite industry comments discussing the reasons why lenders need additional information before issuing a disclosure following application, the CFPB adopted its proposed definition to create a uniform standard for all lenders and ensure that consumers are receiving the Loan Estimate as soon as possible in their shopping for a mortgage loan. While lenders are still free under the final rule to collect other information they deem necessary for a credit decision, as soon as a lender has obtained the six pieces of information noted above, it must provide the Loan Estimate to the consumer.
B. Timing and Waiting Period
Consistent with the requirements of RESPA and TILA, a lender (or mortgage broker if permitted by the lender)  must provide the Loan Estimate disclosure to the consumer within three business days of receiving the application, but no later than seven business days before closing. For purposes of the three-day timing requirement, “business day” is defined differently than otherwise defined for the seven-day waiting period. Notably, “business day” means a day on which the lender’s offices are open to the public to carry on substantially all of its business functions. That means a lender whose offices are open only five days a week counts Monday through Friday for purposes of providing the Loan Estimate to the consumer three business days after receiving an application. However, for purposes of the seven-day waiting period, “business day” is defined as all calendar days except Sunday and certain federal holidays. That means a lender must count Saturday for purposes of determining the days it must wait before closing the transaction.
The CFPB recognizes there may be circumstances when a consumer cannot wait the seven business days after the Loan Estimate is provided to close a mortgage loan. If a consumer experiences a bona fide financial emergency, the final regulations permit the consumer to waive the seven-business-day period through a dated written statement that describes the emergency, specifically modifies or waives the waiting period, and is signed by all consumers that will be primarily liable on the loan. The final regulations prohibit a lender from producing a pre-printed form for the consumer to use for this waiver. A similar waiver requirement is included in the regulations for the three-business-day waiting period that applies to the Closing Disclosure.
C. Settlement Service Provider List
The CFPB maintained the GFE concept of a written list of settlement service providers in the final regulations. If a consumer is permitted to shop for settlement services, the lender must provide a settlement service provider list on a separate sheet of paper, which contains at least one provider for each applicable settlement service, the provider’s contact information, and a statement notifying the consumer that he or she may choose a different provider. The Bureau specifically acknowledges that the listed providers may be a lender’s affiliates, but any providers included on the list must be able to provide services where the consumer or the property is located. Unlike the current Regulation X, which says very little regarding the format of the written list that accompanies the GFE, the final regulations contain a model form that lenders may use for the Settlement Service Provider List.
D. Up-Front Fees Charged to Consumers
Again, like the current requirement for the GFE and early TIL disclosure, lenders are prohibited under the final rule from charging up-front fees to the consumer until the consumer receives the Loan Estimate form and expresses an intent to proceed with the transaction. However, lenders are permitted to charge consumers a bona fide and reasonable fee for obtaining the consumer’s credit report before the Loan Estimate is provided. As lenders often collect credit card information from consumers to charge fees when permitted under existing regulations, the CFPB’s Official Commentary in the final regulations addresses how this practice is to be handled with the Loan Estimate. Notably, under the final rule, if a lender uses a consumer’s credit card number to charge for the up-front credit report fee connected to the Loan Estimate, the lender may maintain that credit card number on file to impose later fees on the consumer after the consumer receives the disclosure and expresses an intent to proceed. However, the lender must obtain a separate authorization from the consumer to charge those later fees to the consumer’s credit card.
E. “Good Faith” Fee Estimates
While the final rule does not use the word “tolerances,” that concept remains. The rule refers to a “good faith determination for estimates of closing costs” based on the CFPB’s belief that consumers will benefit from having more reliable estimates of costs and the notion, whether accurate or not, that a creditor often should be able to estimate costs with considerable precision. The result is that a fee disclosed on the Loan Estimate will be deemed to have been disclosed in good faith if the actual charge to the consumer at consummation does not exceed the amount disclosed on the Loan Estimate. Limited increases, however, are permitted for certain charges. The CFPB, therefore, has implemented a strict tolerance system that holds lenders financially accountable to consumers for inaccurate estimates of third-party fees.
Like the current requirements under Regulation X, the final rule for fee disclosures on the Loan Estimate results in three categories of fees:
(1) Fee increases permitted;
(2) Limited increases permitted in the aggregate (10 percent tolerance); and
(3) No increases permitted (zero tolerance).
Under the first category where increases are permitted, the CFPB recognizes that a lender’s estimate of certain charges is in good faith if it is consistent with the best information reasonably available to the lender at the time of disclosure, whether or not the borrower ultimately pays that amount. This category includes prepaid interest; property insurance premiums; amounts placed into an escrow, impound, reserve, or similar account; charges paid to third-party service providers selected by the consumer and not on the lender’s written list; and fees for services not required by the lender. The second category, where an aggregate increase of 10 percent is permitted, includes recording fees and fees charged by non-affiliated third parties included on the lender’s written list and for which the consumer was permitted to shop. Finally, under the third category, no increases from the amounts disclosed on the Loan Estimate are permitted. This category includes the lender’s or mortgage broker’s charges for its own services, charges for services provided by an affiliate of the creditor, transfer taxes, and charges for services for which the lender does not permit the consumer to shop. This “zero tolerance” also applies to lender credits. If the total amount of a credit provided by the lender at closing is less than the credit disclosed on the Loan Estimate, this is considered an increased charge for purposes of determining “good faith.”
Similar to the current Regulation X, the final rule also recognizes that certain events may occur after the initial Loan Estimate is provided to the consumer that should permit the lender to revise and increase the fee disclosed on the Loan Estimate. Notably, the final rule permits the Loan Estimate to be revised and good faith to be determined based on a revised estimate of a charge if:
(1) Changed circumstances cause the charge or aggregate charges to increase or a borrower’s eligibility to change;
(2) A borrower requests a change;
(3) The interest rate is locked, in which case the Loan Estimate must be revised to reflect updated interest-rate-dependent charges;
(4) The consumer indicates an intent to proceed more than 10 business days after the Loan Estimate is provided; or
(5) The loan is for new construction and the closing is expected to occur more than 60 days after the Loan Estimate is initially provided (and the Loan Estimate includes a statement indicating that the disclosure may be revised at any time prior to 60 days prior to closing).
With the exception of an interest rate lock, which requires a revised Loan Estimate to be provided on the day of lock, and new construction loans, a lender must provide a revised Loan Estimate within three business days of receiving information sufficient to establish that one of the reasons above has occurred. And, like the current rule for the GFE, the lender may only revise those charges that increase as a direct result of the reason for change. The lender also must provide a revised Loan Estimate disclosure no later than four business days before closing. That means a revised Loan Estimate cannot be provided on the same day or after the Closing Disclosure is required to be provided to the consumer. This requirement is new when compared to the current regulations governing the GFE.
Finally, just like current GFE requirements, if a charge increases at closing outside of its permitted category above, the final rule requires the lender to refund the excess to the consumer. That refund can either occur at the closing table or up to 60 days after closing. While many lenders had hoped the concept of a “tolerance cure” would die with the GFE, the CFPB will require lenders to make the same refund but under more stringent tolerance categories.
A continuation of these “tolerance” categories and limited reasons for revision to the Loan Estimate beg the question of whether the CFPB has statutory authority to essentially define a “good faith estimate” to be the actual charge imposed on the consumer at closing. The same question was raised to HUD in 2008 when it substantially overhauled the GFE to introduce tolerances on settlement charges for the first time. While the CFPB cites to authority under TILA that allows it to create tolerances for numerical disclosures in addition to the Annual Percentage Rate (“APR”), the creation of a “zero tolerance” category effectively changes the requirement for a “good faith estimate” of certain fees to a requirement for the disclosure of actual charges. Additionally, neither RESPA nor TILA refer to the disclosure of actual settlement charges within three business days of application. While the ship has likely sailed in terms of the CFPB making further changes to the requirements in the final rule, this is one of those requirements that leave lenders scratching their heads.
F. Loan Estimate Form
The three-page Loan Estimate form remains largely unchanged from the disclosure form proposed by the CFPB, which is not surprising given the substantial amount of time spent by the CFPB testing prototype forms with consumers. Page one includes: (1) basic information about the loan product; (2) a summary of significant loan terms, including the loan amount, interest rate, and monthly payment; (3) a projected payment schedule; (4) information regarding taxes, insurance, and other assessments; and (5) a summary of costs at closing. This final summary of costs is a notable change on the final form from that proposed by the Bureau. Specifically, the bottom of the first page on the final Loan Estimate (and the Closing Disclosure) now contains a summary of “Closing Costs” and a summary of “Cash to Close.” The proposed forms included only a summary of Cash to Close, which purported to define the costs that comprised Closing Costs. The Cash to Close disclosure now more simply refers to the inclusion of Closing Costs without definition.
Page two of the form contains closing cost details, which are broken into Loan Costs, which include origination charges and fees for services required by the lender, and Other Costs, which encompass all other costs associated with the transaction including taxes, prepaid items, initial escrow amounts, and any other costs known to the lender. The new Loan Estimate (and Closing Disclosure) mark a change in philosophy by the CFPB. HUD bundled the settlement service fees together on the theory that consumers are more interested in the total price, rather than the individual charges that make up that total. The new Loan Estimate created by the Bureau, however, requires itemization of all charges, including each individual charge that comprises a lender’s or broker’s origination charge, as well as title insurance and closing fees. The form is further micromanaged to go so far as to dictate the number of individual fees that may be listed in each subcategory, require fees to be alphabetized within those subcategories, and require the word “Title-” to precede every fee related to title insurance and settlement. This page also includes a “Calculating Cash to Close” table, that differs depending on whether the transaction is a purchase or a refinance loan. Finally, to the extent a loan has an adjustable interest rate or the monthly payment may adjust during the life of the loan, page two must include an Adjustable Interest Rate Table and/or an Adjustable Payment Table, as applicable.
Page three of the Loan Estimate includes additional information about the loan, including: (1) the APR, Total Interest Percentage, and amount paid in the first five years of the loan; (2) certain disclosures, including an appraisal disclosure where applicable and a late payment disclosure; and (3) an acknowledgment and signature lines for the borrower. To the extent a lender does not require an applicant to sign the Loan Estimate, an additional loan acceptance disclosure is required. Note that the final rule includes a model Loan Estimate form in both English and Spanish.
II. HUD-1 Settlement Statement + Final TIL = Closing Disclosure
In addition to combining the GFE and initial TIL into a single Loan Estimate, the final rule combines the final TIL and HUD-1 into a single Closing Disclosure. Although the goal is to create easier-to-understand disclosures, the five-page Closing Disclosure is chock full of loan terms, closing costs, and disclosures, and it is two pages longer than the three-page HUD-1. Moreover, lenders and settlement agents are used to their division of responsibilities as it relates to the lender’s preparation of the final TIL and the settlement agent’s preparation of the HUD-1. Now lenders must decide how much control they will give settlements agents to prepare and provide the combined Closing Disclosure form. Also, settlement agents that will prepare and provide the form must get used to doing so a few days sooner than is their current practice. Nevertheless, effective August 1, 2015, lenders must ensure that a consumer receives the Closing Disclosure form no later than three business days before consummation.
A. Timing and Responsibility for the Form
Despite the RESPA requirement that a consumer receive a copy of the HUD-1 one business day prior to closing, TILA requires the final TIL disclosure to be received by the consumer no later than three business days before consummation. Thus, it is no surprise that the final Closing Disclosure is tied to the timing requirements under TILA. As noted above, a creditor must ensure that a consumer receives the Closing Disclosure no later than three business days prior to consummation, regardless of whether the creditor prepares and delivers the form or a settlement agent is responsible for this activity. Note that the three-business-day waiting period begins on the day the consumer receives the form and is not automatically measured from the day the lender or the settlement agent sends the form to the consumer. For purposes of this requirement, “business day” also means all calendar days except Sunday and certain federal holidays. For instance, if a lender or settlement agent mails the Closing Disclosure to the consumer via first class mail, the consumer is deemed to receive the disclosure three business days after mailing. To comply with the timing requirement for the Closing Disclosure, the lender or settlement agent must count three business days from the date mailed plus three business days before consummation. Like the Loan Estimate, however, if a consumer experiences a bona fide financial emergency, the final regulations permit the consumer to waive the three-business-day period through a dated written statement that describes the emergency, specifically modifies or waives the waiting period, and is signed by all consumers that will be primarily liable on the loan. A lender or settlement agent is prohibited from producing a pre-printed form for the consumer to use for this waiver.
While the CFPB’s proposed rule considered allowing only the creditor to prepare and provide the Closing Disclosure, the Bureau recognized the important role and unique responsibilities of settlement agents as it relates to disclosing final costs in a mortgage transaction. Thus, the file rule permits either the creditor or settlement agent to prepare all or portions of the form and provide it to the borrower. The creditor, however, remains ultimately responsible for the Closing Disclosure form. In purchase transactions, the final rule continues the practice of requiring the settlement agent to prepare and provide a Closing Disclosure to the seller. This must be done no later than the day of consummation; the three-business-day waiting period is not applicable to seller-only Closing Disclosures.
B. Revisions to Closing Disclosure Before Closing
With final closing costs now required to be disclosed on the Closing Disclosure three business days before consummation, revisions to the form and the circumstances under which a new three-business-day waiting period is required drew a lot of attention in the proposed rule. This was particularly the case because the CFPB proposed to require a new waiting period for changes in fees of $100 or more. The CFPB, however, heard industry comments and dropped this proposal. The final rule requires that if a Closing Disclosure becomes inaccurate before consummation, the creditor (or settlement agent) must provide a corrected disclosure so that the consumer receives it at or before consummation. However, the following changes on the Closing Disclosure before closing will require a new three-business-day waiting period:
(1) The APR changes outside of existing tolerances;
(2) The loan product changes; and/or
(3) A prepayment penalty is added to the loan.
In those cases where a lender is permitted to provide a revised Closing Disclosure to ensure a consumer receives it at or before consummation, note that the final rule, nonetheless, requires that the consumer be able to inspect the corrected disclosure during the business day immediately preceding consummation.
C. Revisions to Closing Disclosure After Closing
Once a transaction has closed, the lender or settlement agent’s responsibility to revise inaccurate information on the Closing Disclosure does not end. Similar to proposals made by the CFPB, the final rule requires a revised Closing Disclosure to be provided in three circumstances. First, if an event related to settlement occurs during the 30 days after consummation and that event changes an amount actually paid by the consumer and disclosed on the Closing Disclosure, a corrected disclosure must be delivered or mailed no later than 30 days after the creditor receives information sufficient to establish that the event occurred. For instance, if the mortgage documents are recorded a week after closing, and the actual recording fee is different than the fee disclosed and paid by the consumer, the creditor must revise and resend the Closing Disclosure within 30 days after the recording date. The same rule applies to seller-only Closing Disclosures. If an event occurs after closing that changes an amount actually paid by the seller, the settlement agent must revise and resend the Closing Disclosure within 30 days of that event. Second, if the Closing Disclosure has non-numeric clerical errors, a revised Closing Disclosure must be delivered or mailed to the consumer no later than 60 days after consummation. For example, if the name of the vendor providing a settlement service were listed in error. Finally, as mentioned above, to the extent a creditor has not refunded the excess amount resulting from an improper fee increase at closing, the final rule requires the creditor to refund the amount and provide a revised Closing Disclosure within 60 days of consummation.
D. Closing Disclosure Form
Like the Loan Estimate form, the five-page Closing Disclosure form remains largely unchanged from the disclosure form proposed by the CFPB. Page one mirrors the first page of the Loan Estimate, including the expanded disclosure of Closing Costs and Cash to Close at the bottom of the page. Page one of the final form allows the disclosure of the sale price, appraised property value, or the estimated property value. The proposed Closing Disclosure form only permitted the disclosure of the sale price and appraised property value. This change to the final form will allow for more accurate disclosure when neither a sale price nor an appraised value is applicable in a transaction.
Page two of the form includes a detailed itemization of closing costs similar to the HUD-1, but with categories of fees grouped to match the structure of the Loan Estimate. That means Loan Costs and Other Costs are itemized in separate sections using the same subcategories of fees that are required on the Loan Estimate. This page also provides separate columns for fees paid by the borrower, seller, and other parties to the transaction. The paid-by-others column will allow, for instance, the separate disclosure of mortgage broker compensation that is paid by the lender. Page three repeats the “Calculating Cash to Close” table from the Loan Estimate and highlights whether any of these entries changed when compared to the Loan Estimate. This page also includes the summary of both the borrower’s side and the seller’s side (if applicable) of the transaction, similar to the current HUD-1.
The fourth page of the Closing Disclosure includes a number of loan disclosures, including disclosures regarding assumption, demand features of the loan, late payment, negative amortization, partial payments, security interest, and escrow. To the extent a loan has an adjustable interest rate or the monthly payment may adjust during the life of the loan, this page also must include an Adjustable Interest Rate Table and/or an Adjustable Payment Table as applicable. As compared to the proposed form, the partial payments disclosure includes three boxes to indicate whether the lender accepts and applies partial payments, accepts and holds partial payments, or does not accept partial payments. The middle box disclosing that the lender may accept partial payments and hold them in a suspense account is new. This modified disclosure on the final form will allow a more accurate disclosure of a lender’s practices regarding partial payments.
Finally, the last page of the form contains other loan disclosures, including an appraisal disclosure if applicable and disclosures regarding contract details, liability after foreclosure, refinancing the loan, and tax deductions. This page also includes important disclosures required by TILA, including: (1) the dollar amount of total payments; (2) the finance charge; (3) the amount financed; (4) the APR; and (5) the Total Interest Percentage. Despite public comments that such disclosures need more prominence to ensure they are viewed and understood by the consumer, the Bureau left these disclosures on the final page. Moreover, the CFPB had proposed to include an Approximate Cost of Funds disclosure with these Loan Calculation disclosures, but the final form does not require that disclosure. Based on public comments received and consumer testing, the Bureau acknowledged that an Approximate Cost of Funds disclosure could be confusing. Accordingly, the Bureau is exempting creditors from the cost of funds disclosure requirement.
The form concludes on page five with instructions to the consumer if he/she has questions, a section to include contact information, and an acknowledgment and signature lines for the borrower. To the extent a lender does not require an applicant to sign the Closing Disclosure, an additional loan acceptance disclosure is required on the form. The Closing Disclosure form now directs the consumer to generally use “the contact information” appearing on this page if the consumer has questions about the loan terms or costs appearing on the form. The proposed Closing Disclosure included language directing the consumer to contact the lender with questions about the terms or costs disclosed on the form. Recognizing that the lender may not be able to answer questions about fees and costs outside of its control, the final form provides a general reference to contact information, which discloses information for the lender, mortgage broker, real estate brokers, and settlement agent as applicable. Finally, like the Loan Estimate, the final rule includes a model Closing Disclosure form in both English and Spanish.
III. What is NOT in the Final Rule
If it is not enough to combine and completely overhaul RESPA and TILA disclosures, the CFPB’s proposed rule would have revamped the calculation of the finance charge. Specifically, under current TILA requirements, a fee or charge is included in the finance charge if it is payable directly or indirectly by the consumer to whom credit was extended and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit. Certain real estate-related fees are excluded from the calculation, including fees for title searches, document preparation, appraisals, credit reports, and notaries. The CFPB had proposed to remove these exclusions and create an “all-inclusive” finance charge calculation to include nearly all of the up-front costs of the loan. Such a proposal sparked concern among lenders and other settlement service providers that an “all-inclusive” finance charge calculation would result in higher APRs, result in more high-cost loans, and cause loans to fail the three-point test under the definitions of qualified mortgage and qualified residential mortgage. The Bureau ultimately agreed to abandon this proposal. The final rule makes no changes to the calculation of the finance charge under TILA.
In addition, the CFPB had proposed to impose a new record-keeping requirement by dictating that lenders keep records of the Loan Estimate and Closing Disclosure forms provided to consumers in a standard electronic, machine-readable format to make it easier for regulators to monitor compliance. Based on public comments the CFPB received that raised implementation and cost concerns regarding the record keeping proposal, the Bureau did not finalize this provision in the final rule. The Bureau, however, stated that it continues to believe the idea may have benefits for consumers and the industry and intends to continue following up on data standards and electronic record keeping systems.
While the effective date of the final rule is 20 months away, there is a lot to be done in that time. Technology companies and document form companies are already pouring through the hundreds of pages of regulations and Official Commentary that dictate the structure, language and format for each page of the Loan Estimate and Closing Disclosure forms. After flipping the switch on a January 2014 effective date for other CFPB requirements, you can be sure mortgage lenders will soon be turning their full attention to the Loan Estimate and Closing Disclosure requirements. Title insurance companies and settlement agents will begin the process of defining their ongoing relationships with mortgage lenders regarding preparation of the Closing Disclosure form. There is no question that a lot of time and resources will be expended by these companies in the coming months to learn the new requirements, update technology, and train employees.
Give the Bureau its props. The agency sought to create transparent, easier-to-use disclosure forms, improve consumer understanding of a complicated process, aid consumer shopping, and prevent surprises at the closing table. Whether consumers will wade through a three-page Loan Estimate and a five-page Closing Disclosure, and whether lenders, title companies, and real estate brokers will have their act together by August 2015, remains to be seen. As we said, the wait is over. The anxiety is just beginning.
K&L Gates also continues to pour through the regulations and work through the many legal and practical issues presented by the final rule. As a result, we are planning a series of alerts to highlight certain issues that industries should be aware of as we move towards the August 1, 2015 effective date.
 Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act
(Regulation X) and the Truth in Lending Act (Regulation Z), available at http://files.consumerfinance.gov/f/201311_cfpb_final-rule_integrated-mortgage-disclosures.pdf.
 Like the current requirements for the GFE, if a mortgage broker provides the Loan Estimate to the consumer, the lender is bound by the disclosure.