The Home Ownership and Equity Protection Act (HOEPA) and the Housing and Economic Recovery Act (HERA) that were passed by Congress in 2008. The Federal Reserve Board published the regulations under the Truth in Lending Act. These regulations were written to provide more transparent, level and fair regulation of the real estate industry; to add additional steps to help prevent deceptive lending practices; and to protect consumers by making them more informed - and therefore more confident- in their home financing choices.
Housing and Economic Recovery Act - (HERA) amends and impacts several aspects of obtaining a mortgage, the disclosures required for borrowers, and the timing of their delivery. Below are some of the new time tables that may affect your closings. The following rules only apply to primary residences and second homes.
1. The earliest a closing may occur is no sooner than 7 days after the borrower has been issued all the initial mortgage disclosures (Saturdaysmaycount -depends on lender but Sundays and federal holidays do not).
2. Upfront fees may not be collected until after the early Truth in Lending disclosures (good faith estimate and the Federal T&L disclosure)have been provided. Truth in lending disclosures must be provided at least 3 days after application.
Face to face application-Credit report fee(reasonable) may be collected at application.
-Appraisal fees may be collected the day after.
Mail out application Credit report fee(reasonable) may be collected up front
includes overnight and email) Appraisal fees may be collected 3 business days after mailing.
3. The homebuyer must receive a copy of the appraisal 3 days before closing. This right may be waived by borrower.
4. Redisclosure -if the Truth in Lending changes by more than .125% a revised one must be issued at least 3 days prior to closing. If mailed it is considered to be received by borrower 3 days after mailing. You can see from the time line that this could be a long delay with any changes if your working with a lender that is not local.