Proposed HUD-1, GFE Revamp: Too Much?

About two years ago, the U.S. Department of Housing and Urban Development revamped the HUD-1 Settlement Statement and the Good Faith Estimate (GFE). Among other things, the forms were shortened and some “tolerances” were added to decrease the incidences in which figures on the HUD-1 differed too much from what was originally estimated on the GFE. The changes required HUD to provide a lot of training to everyone involved in the settlement process, including real estate practitioners.

Now, here we are two years later, and these same two forms, the HUD-1 and the GFE, are the subject once again of a revamping, this time by the Consumer Financial Protection Bureau (CFPB). In part, the agency needs to make changes because by law it’s required to harmonize the Truth in Lending Act (TILA) disclosures with the settlement forms.

NAR is still looking at CFPB’s proposed changes, which are detailed in an 1,100-page rule. You read that right: 1,100 pages. So, it’ll take some time to get a good picture of exactly what the agency is proposing. But, at this point, it looks like CFPB is trying to do too much, and already NAR sees some potential trouble spots.

First, the agency left it unclear who is supposed to fill out the proposed combined settlement form. Is it the lender or the closing agent?

Second, the agency has left it ambiguous what kinds of things can derail the closing with a three-day delay. Building in a three-day delay sounds good for consumers in theory, because if there is a big discrepancy in what they were told in the loan estimate and what shows up in the settlement form, they should have time to review that. But if the delay is triggered by something minor, then the closing will get snagged at the 11th hour for little purpose, and no one wants that.

Third, the sheer breadth of changes has to have a disruptive effect on closings as lenders and title agents and even practitioners figure out what has changed and what hasn’t. And is that a good thing to be dealing with now, when the housing market is still trying to recover and other big rules—like the qualified mortgage (QM) rule—are still waiting to drop? (QM is intended to set minimum underwriting standards for lenders to prevent them from originating loans to borrowers who lack the ability to repay.)

It might just be too much right now.

In any case, CFPB is taking public comments until Nov. 6 on most of the rule. It’s worth your time to familiarize yourself with the main changes and share your thoughts with the agency. CFPB has a reputation for being good about asking for and considering public input, so consider taking advantage of this opportunity to share your thoughts.

In the 6-minute video above, Ken Trepeta, director of Real Estate Services for NAR,walks us through the main points of the rule.

Read the rule for yourself and submit comments.

Robert Freedman

Robert Freedman is director of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at

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  1. Like many other things in this country, there are too many fingers in the pie. Only 1 government agency needs to oversee many of these forms. First, every agency wants to make a name for themselves so they are constantly doing & redoing everything they touch. Too many agencies & too much government. Secondly, most folks are just getting used to the new form & now we want to change it again. Tell me, why is it necessary to make the 2 forms come out to be almost the same by modifying the form. Make the lenders do a better job with the TILA form they now have instead of making the form say what you want it to say.

    Why is it that federal employees lose all common sense when start working for the government? Actually, I know the answer but don’t have the time or the patience to spell it out here. You just have to be outside the government to see it in most cases.