New Mortgage Rules – What You Need to Know

This past October, a seismic shift occurred in how home mortgage applications are processed and consummated, and these changes have resulted in important conversions in how you’ll interact with your lender. It’s called “Know Before You Owe,” implemented by the Consumer Financial Protection Bureau, after the Dodd-Frank financial reform legislation was passed into law in the wake of the 2008 financial meltdown.

For home buyers, the two most critical changes involve the paperwork you receive at the start of the process as well as at the end, the estimates of your loan and the closing documents.

Two documents, the HUD-1 Settlement Statement and the Truth in Lending Act (TILA) disclosure are combined into the single “Closing Disclosure” form intended to state all aspects of the mortgage during the life of the loan; monthly payments, total payments, closing costs, prepayment penalties, potential interest rate changes during the life of the loan, and balloon payments.

This document also contains information on the borrower and lender, late fees, and other terms of the contract. It is required to be provided to the borrower 72 hours prior to closing.

Many lenders across the country, realizing the complexities involved with the “Know Before You Owe” requirements and the added regulatory burden began to require certain standards of operation from the title companies they will agree to work with. In several instances, smaller title companies in Arkansas found themselves unable to take on the added costs of compliance, which are considerable.

First National Title Company is independently owned and operated and as one of the largest title companies in Arkansas it has had the opportunity to acquire some other title companies, rather than simply allow those companies to close, leaving some Arkansans without an independent closing agent easily accessible.

As a result of the “Know Before You Owe” implemented by the Consumer Financial Protection Bureau, will costs rise? Yes. Unfortunately, that’s unavoidable. But fortunately, FNTC is positioned to keep those increases manageable while still providing the highest level of service, but with the personal touch Arkansans throughout the state deserve. Through it all, FNTC is and will remain your one-stop shop for residential and commercial closing services, escrow services, title insurance, 1031 and Reverse 1031 transactions, abstracting, and witness closings. During these changes, we’ve grown, and will continue to do so to the extent required to meet the needs of Arkansas home buyers.

Contact our experts at any of our Arkansas locations listed below. The way FNTC is structured guarantees you’ll have the information and documentation you need, when you need it, and we’ll always be here when you need us.