Introducing the New HUD 1 Settlement Statement The growth of the housing mortgage industry has finally forced the Consumer Financial Protection Bureau to issue a final rule to bolster fairness and clarity in residential lending. Come August 2015, the CFPB will be introducing a simpler, direct HUD 1 Settlement Statemeent, Truth in Lending, and Good Faith Estimate. These less convoluted documents will help buyers and sellers comprehend their closing figures more easily. The new Loan Estimate is what will replace the Good Faith Estimate and Truth in Lending. The new Closing Disclosure will replace the HUD 1; it may be longer, but it will ultimately organize the settlement statement in a more conducive way so the client can grasp the entirety of their closing costs. The new Loan Estimate will combine the figures previously listed in the GFE and the TIL. Furthermore, the lenders will be required to provide the Loan Estimate 48-72 hours prior to closing. This may cause some issues because each closing transaction is different and may need to be rushed at times, but the general rule will be to send 48 hours prior to closing. The Loan Estimate will conveniently provide for the monthly principal and interest payment, projected payments over the term of the loan, estimated taxes and insurance (escrows), estimated closing costs, and cash to close - all in one instead of separate documents. The Annual Percentage Rate, APR, will appear on page 3 and will provide the rate lock deadline on the document. The new Closing disclosure will be a 5 page document compared to the 3 page document. Page one of the Closing disclosure includes much of the figures and information from the previous TIL. Page 2 and 3 replicates the HUD 1 in showing the closing costs, commissions, and adjustments of the fees. It also contains a more extensive section on the cash to close which is helpful to explain. Page 4 contains a nice easy-to-read section on the escrow account. Finally, the last page of the Closing disclosure is similar to page 3 of the HUD 1 outlining the loan terms, interest rate, and monthly payment. The closing process with significantly change with the introduction of the new integrated disclosure forms. In conclusion, the 3 page HUD 1 document we know now will transition into a 6 page document that is seemingly easier to read and understand by buyers and sellers.