Effective October 3, 2015, the Closing Disclosure Form (CDF) is the new form used by settlement agents to disclose to the borrower the actual terms and costs of the transaction in relation to the estimated terms and costs outlined on the Loan Estimate Form. The CDF combines and replaces the existing HUD-1 and final TIL (Truth In Lending) disclosure, and therefore not only breaks down all charges associated with the transaction, but also outlines the terms of the loan clearly for the borrower.
The TILA-RESPA rule (the rule finalized by the CFPB with new, integrated mortgage disclosures Under the Truth In Lending Act and the Real Estate Settlement Procedures Act) and accompanying forms apply to most closed-end consumer credit transactions secured by real property. They do not apply to loans made by a person or entity that is not considered a creditor or to the following types of loans:
The TILA-RESPA rule imposes a three-business-day waiting period for the consumer to review the CDF. Therefore, the creditor is responsible for providing the CDF to the consumer no later than three business days before consummation. If the form needs to be corrected for one of the following reasons, a new form must be delivered and a new three-business-day waiting period will begin:
If there are any other types of changes to the form, the creditor must ensure that the consumer receives the corrected form at or before consummation.