The Consumer Financial Protection Bureau today issued a fact sheet to help lenders determine when the TILA-RESPA integrated disclosures—the Loan Estimate and the Closing Disclosure—are required when mortgages are assumed. The fact sheet addresses TRID requirements when a new consumer is added or substituted as an obligor on an existing closed-end credit transaction secured by real property and that is not a reverse mortgage.
The fact sheet uses a flowchart to illustrate when the Loan Estimate and Closing Disclosure are required, and it discusses the specific factors that characterize an “assumption” as defined in Regulation Z: the creditor’s express acceptance of the new consumer as a primary obligor, the creditor’s express acceptance in a written agreement and the new borrower’s use of the real property securing the mortgage as a principal dwelling.
