The New Mortgage "Norm" as of January 2014
Talk to real estate and lending professionals regarding the current Home Buying and Closing process and you will most likely hear one of the following:
"The Loan Closing process is an imperfect one."
"All too often, it's a last-minute business."
"It generally and eventually comes together."
I've personally heard each of the above statements. But this "inexactness" is officially coming to an end in January, 2014.
Yes, big changes are coming in just two months. Changes that will decree that only "perfectly" executed transactions will Close ... on time ... and "as scheduled".
Based upon rules being implemented by the CFPB (Consumer Financial Protection Bureau), as a directive by the Dodd-Frank Act, "perfect" ... and nothing less ... must be the new normal. As a measure to protect Consumer (Borrowers), the new "Closing Disclosure" Form will have to be completed correctly (i.e. "perfectly") three (3) business days before Closing in order for Funding to be accomplished.
As it stands currently, the new Guidelines and Rules are slated to be implemented in January, 2014. The new Closing Disclosure Form replaces the current Hud 1 Closing Statement. The new Closing Disclosure Form, plus a new Loan Estimate Form, which replaces the current Good Faith Estimate, are designed to be "more understandable" for a Borrower.
These new forms will carry more weight then those in place right now ... and Mortgage Lenders will be held accountable for having correct, accurate figures and data ... or the Loan Closing will be delayed.
As with any new changes made, there will be objections, resistance, and complaints heard from many. But I'm confident that I can uphold my end of the transaction. My Mortgage Process, delivering the Interest Rate and fees promised, Underwriting, Approval, and funding of the loan will be successfully provided.
But here's what I find the scarey part within the changes coming in January, 2014:
The Proposed Rules (soon to be Final Rules) state that the new Closing Disclosure must be correct and presented for the Buyer/Borrower three (3) business days in advance of Closing. And: If ANY figures are revised (above $100) the Closing will be delayed, under the new rules. A new Disclosure will have to be made/completed and the 3-Day waiting period will start again.
So ... to all of us that contribute figures to the Title Company (or Closing entity) for preparation of the Closing Disclosure, we must have our act together. We must provide accurate, timely figures and hope that the Seller's Attorney, Buyer's Attorney, and Title Company are also completely onboard and able to perform fully. The pressure will continue to be on the Mortgage Lender to process and approve loans in a timely manner ... and for the various parties involved to perform their duties too. No more last minute changes will be allowed.
Also, for the record ... to fund a loan on a Friday, the new Closing Disclosure must be completed and acknowledged by the Borrower no later than Monday of that week. My take on this is that figures must be completed, delivered to, and receipt acknowledged by the Title Company by the Friday before.
The New Mortgage "Norm" as of January 2014 ... to say the least, there will be an "adjustment period" as a result of the changes coming in January. But this change once again underscores the great importance of working with the right real estate and lending professionals. Professionals not fully-committed and capable of delivering timely, quality, experienced service can definitely prove costly to Consumers. Costly in both actual monetary expenditures, but in time as well.
"All too often, it's a last-minute business."
"It generally and eventually comes together."
I've personally heard each of the above statements. But this "inexactness" is officially coming to an end in January, 2014.
Yes, big changes are coming in just two months. Changes that will decree that only "perfectly" executed transactions will Close ... on time ... and "as scheduled".
Based upon rules being implemented by the CFPB (Consumer Financial Protection Bureau), as a directive by the Dodd-Frank Act, "perfect" ... and nothing less ... must be the new normal. As a measure to protect Consumer (Borrowers), the new "Closing Disclosure" Form will have to be completed correctly (i.e. "perfectly") three (3) business days before Closing in order for Funding to be accomplished.
As it stands currently, the new Guidelines and Rules are slated to be implemented in January, 2014. The new Closing Disclosure Form replaces the current Hud 1 Closing Statement. The new Closing Disclosure Form, plus a new Loan Estimate Form, which replaces the current Good Faith Estimate, are designed to be "more understandable" for a Borrower.
These new forms will carry more weight then those in place right now ... and Mortgage Lenders will be held accountable for having correct, accurate figures and data ... or the Loan Closing will be delayed.
As with any new changes made, there will be objections, resistance, and complaints heard from many. But I'm confident that I can uphold my end of the transaction. My Mortgage Process, delivering the Interest Rate and fees promised, Underwriting, Approval, and funding of the loan will be successfully provided.
But here's what I find the scarey part within the changes coming in January, 2014:The Proposed Rules (soon to be Final Rules) state that the new Closing Disclosure must be correct and presented for the Buyer/Borrower three (3) business days in advance of Closing. And: If ANY figures are revised (above $100) the Closing will be delayed, under the new rules. A new Disclosure will have to be made/completed and the 3-Day waiting period will start again.
So ... to all of us that contribute figures to the Title Company (or Closing entity) for preparation of the Closing Disclosure, we must have our act together. We must provide accurate, timely figures and hope that the Seller's Attorney, Buyer's Attorney, and Title Company are also completely onboard and able to perform fully. The pressure will continue to be on the Mortgage Lender to process and approve loans in a timely manner ... and for the various parties involved to perform their duties too. No more last minute changes will be allowed.
Also, for the record ... to fund a loan on a Friday, the new Closing Disclosure must be completed and acknowledged by the Borrower no later than Monday of that week. My take on this is that figures must be completed, delivered to, and receipt acknowledged by the Title Company by the Friday before.
The New Mortgage "Norm" as of January 2014 ... to say the least, there will be an "adjustment period" as a result of the changes coming in January. But this change once again underscores the great importance of working with the right real estate and lending professionals. Professionals not fully-committed and capable of delivering timely, quality, experienced service can definitely prove costly to Consumers. Costly in both actual monetary expenditures, but in time as well.
* Hoping to Buy a Home or Refinance in the Chicagoland area? Contact me!I'll be happy to put my 36 years of Mortgage experience and expertise hard to work on your behalf.
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