The RESPA law has changed and took effect for applicaiton taken August 1, 2009 or after.  There are three big changes that took effect on August 1, 2009.  These changes can have a dramatic effect on closing times if you end up working with the wrong lender.  The lenders most effected are the big banks such as Wells Fargo, Bank of America, CitiMortgage, and Chase.  These banks have to completely change their business models.  Other lenders are not as effected because their business models are already setup to work under the new changes.

Here are the changes

1) Cannot close a loan for at least 7 business days from application date.  Applicaiton happens when client signs loan docuemnts & diclosures if in person or 3 business days from mailing date.

2) Lenders cannot collect any upfront fees before official applicaiton date.

3) If APR on loan changes by more than 1/8 of percent then lender must re-disclose the new rate and wait 3 business days from time of receipt of new APR.  So if mailing, could actually take 6 days because have to wait 3 business days for mail to get to client.

The probelms arise for the big banks because they don't have effect systems to monitor the APR change until they draw docs for closing.  The old law allowed you to disclose APR change at the settlement. Which didn't give clients any warning their APR changed before closing.

We at Primary Residential Mortgage have always re-disclosed APR changes when any fees actually changed from the original estimate.  This has always been done and hasn;t caused any delays in closing under the new law.

If you have questions or need a home loan for the purchase or refinance of a home, please feel free to call me at 302-588-3665 or send an e-mail to DelawareMortgages@yahoo.com

John R. Thomas - Certified Mortgage Planner - Primary Residential Mortgage, Inc.

www.DelawareMortgageLoans.net