New Loan Disclosure Rules................

     For the many years I have been doing real estate I have been telling all my buyer's to make sure they receive a good faith estimate from their lender. Any lender can promise you what you want to hear but not to many deliver. Some even provide a good faith estimate and fall short of the estimate they give only leaving the buyer's totally dismayed at doc signing. There is now new guidelines to protect buyers from this happening.
     Starting July 30, 2009, if the APR on an initial Good Faith Estimate is no longer accurate (within a 0.125% range) at close of escrow, a lender must generally provide a residential borrower with a new disclosure and a three-day right to rescind before consummating the loan. Because of this new three-day waiting period, a lender's failure to timely provide corrected disclosures has the potential of delaying funding of the loan and close of escrow. When signing loan docs always make sure the rate is correct.
     This new requirement is part of the Mortgage Disclosure Improvement Act (MDIA) implementing new loan procedures to protect borrowers and create greater more responsibility in mortgage industry. For loan applications submitted on or after July 30, 2009, the new MDIA changes to the Truth In Lending Act are generally as follows:
Applicability: The new MDIA rules pertain to federally-related mortgage loans covered under RESPA and secured by a consumer's dwelling. The rules apply to both purchase and refinance loans.
     Early Disclosures: A lender must provide a borrower with an initial Good Faith Estimate within three business days of receiving the borrower's written loan application as specified. For this provision, a "business day" is generally defined as a day on which the lender's offices are open for business. Always ask your Realtor to review the good faith estimate to see if it seems correct. Some lender's don't accurately list escrow and title fees so their fees seem less.
     Upfront Fees Restriction: Neither a lender nor any other person may impose an upfront fee on the borrower (except for credit report) until the borrower has received the early disclosures in person or, if mailed, three business days after the early disclosures are mailed. For this rule, a "business day" is defined as all calendar days except Sundays and legal public holidays as specified. In some cases you will be asked to pay the appraiser in person. This should only take place if you are in escrow and have a home secured.
     Seven-Day Waiting Period: A lender must wait seven business days after providing the early disclosures before consummating the loan. For purposes of this waiting period, a "business day" is defined as all calendar days except Sundays and federal legal holidays as specified. A borrower may waive the waiting period in writing in case of personal financial emergency, such as an imminent foreclosure sale.
     Re-disclosure Requirement: If the final Annual Percentage Rate (APR) at loan consummation varies more than 0.125% (or 1/8 of one percent) from the initial APR on the early disclosures of a regular transaction, the lender must provide the borrower with a corrected disclosure at least three business days before the loan is consummated. For purposes of this waiting period, a "business day" is defined as all calendar days except Sundays and federal legal holidays as specified.
     Three-Day Waiting Period: For corrected disclosures, a lender cannot consummate a loan until three business days after the the borrower receives the corrected disclosure in person. If the corrected disclosure is mailed, the borrower is deemed to have received it three business days after it is placed in the mail. A borrower may waive this waiting period in writing in case of a bona fide personal financial emergency, such as an imminent foreclosure sale.
     If your lender has not provided you with loan docs that reflect the good faith estimate when you go to sign loan docs you are stuck in a position to either sign docs you are not happy with or risk your deposit you have in escrow because you can't preform within the time frames of the purchase contract. It's very important when considering a lender you don't just pick the best rate. Many factors have to be considered in today's market. Try to pick a lender that is referred to you and has a good reputation. Ask your Realtor for a list of three broker/lenders and have them all provide good faith estimates and compare apples with apples.