Getting a mortgage completed is like making sausage; the finished product is desired but the process of getting there is best left behind the 
curtain as it is usually ugly. Buyer horror stories about the application and approval process are universal, and the process is likely to get uglier. Effective August '15, the "HUD-1" and "Truth in Lending Disclosure" will be replaced with the "Closing Disclosure"; a seemingly benign change, but one that's already causing headaches. The kicker is that the buyer will be required to have this three days in advance of closing; this in an environment where it's a struggle to get everything in place by the day of closing.
Wes Miller put it succinctly clear in a recent Inman News article:
Buyers have to run all over town and deliver the same information to multiple parties so that the different players in the transaction have the necessary documentation. They are often stunned and upset by the inefficiencies and frustrations inherent in the process, and are slow to come back to the market or refer the people they worked with.
On average, there are 25 individuals working on a single closing, and each of them are affected to varying degrees if the deal falls through. Real estate agents aren’t paid because they are based on commission. The cost of storage units, hotel stays and so on adds up quickly for the buyer or seller. And let’s not forget the wasted time and energy for everyone involved. That’s a lot of unnecessary work and cost.
And it's likely to get even more convoluted come August. It's clear to everyone involved in a home purchase that the "system" is broken, this upcoming change does nothing to enhance that. The guidance and regulatory "book" on this change is over 1000 pages long; is that necessary?
We're seeing the mortgage approval process stretched out already due to Collateral Underwriting; yet another oversight slapped onto the appraisal industry. To this point, delays have been better than expected but the concern is that as the market heats up the appraisal time frames will lengthen.
Buying and selling real estate continues to get more more complicated, thank you so much Washington.
The article by Miller is here
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