The mortgage industry is undergoing many changes. These changes are intended to help increase information to better inform buyers. More regulations are not always the answer, but we are hopeful this at least helps! Now buying homes in Mesquite NV and Scenic AZ (or wherever you are looking) could take longer if you need a loan.
In 2008 a number of regulations were passed by congress including the Home Ownership and Equity Protection Act (HOEPA) and the Housing and Economic Recovery Act (HERA). Both of these were intended to provide more transparency with level and fair regulation of the real estate industry.
HERA: amends the Truth in Lending Act, by including provisions such as the Mortgage Disclosure Improvement Act, which changes the Truth in Lending Act requirements regarding early and final disclosures to home buyers and addresses timing of when fees can be charged.
This is effective beginning July 30, 2009. However, you many see many of the larger lenders such as Wells Fargo and others implement this sooner. Mesquite and Scenic AZ real estate are going to be impacted. Here are the main things you should know about these changes.
- When financing property, these new regulations could impact or even set your closing date. Normally the buyers and sellers agree on a closing date and then all others including Realtors, lenders, and other services work to meet the deadline. NOW, federal regulations mandate the earliest a home purchase can close is 7 business days after the home buyer is issued the initial mortgage disclosures from the lender. (NOTE: this does not apply to cash transactions.)
- Upfront fees cannot be collected by the lender until disclosures are received. Previously lenders could collect fees at the initial meeting or over the phone, NOW fees cannot be collected until the following day after buyer receives the initial disclosures. The only exception is the credit report fee which can still be collected at the time of the application.
- Buyer must receive a copy of their home appraisal a minimum of 3 days prior to closing. This now gives the buyer an opportunity to review the appraisal for at least 3 days prior to closing, just as the bank does. The buyer may waive this review period for any reason at their discretion.
- An increase of more than .125% in the Annual Percentage Rate (APR) from the original Truth in Lending Disclosure requires that it be revised and reissued to the buyer at least 3 days prior to closing. This will hopefully counter act the epidemic of buyers arriving at the signing and have the interest rate raised and them having never been previously notified. If rates are raised more than the .125% allowed by this new regulation then the closing can not occur sooner than 3 business days. This really forces lenders and title companies to work together to get the fees correct as they can influence the APR.
The overall effect of this will more than likely extend out closing dates on financed transactions to about 45 days with some up to 60 days. The 30 day or sooner closing may be now limited to cash transactions.
This article was written by the Mesquite Real Estate Team from Bowler Realty. Find listings for Scenic AZ real estate and find Beaver Dam AZ mobile homes as well as Mesquite Nevada Listings.
{ 0 comments… add one now }