New Mortgage Regulations - Add Protections But Could Delay Closings

New Mortgage Regulations -

 Add Protections But Could Delay Closings

These new rules came into place at the end of July and may lead to longer closing times in the coming months. Specifically they require lenders to:

• Provide a good faith estimate (GFE) of a mortgage's full cost within three business days of receiving an application.

• Not charge any fees until consumers receive the GFE. The only fee lenders can ask for upfront is a "reasonable fee" for obtaining the consumer's credit history.

• Wait seven business days after providing the initial loan costs before closing the loan.

• Offer a new estimate of the loan costs three business days before the closing date if the original annual percentage rate (APR) increases by more than one-eighth of a percentage point.

These new regulations are in effect now and as mentioned you may begin to see these lengthening the time frame to complete purchase and refinance transactions in the coming months. How much impact they have on increased transparency is yet to be seen, but we will provide updates on the effectiveness of these new regulations in the coming month. What we do know for now, is that one additional piece of regulation has been added to the mortgage lending process with the goal of protecting consumers, but the only guarantee at the moment is a lengthier loan process.    

For more information on mortgage programs, rates and information  for potential and current homeowners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com