Just when you thought we couldn't change anything else in our industry...

By
Mortgage and Lending with Landover Mortgage

Here's another current observation from Your RED-Headed, Mortgage Guy

YES, the Mortgage Disclosure Improvement Act of 2008 comes to haunt us on July 30th.

Early disclosures are required for "any extension of credit secured by the dwelling of the consumer".  Not that we in the mortgage business weren't already required to provide a Good Faith Estimate and a Truth in Lending form within three business days, we are now bound by other restrictions with this law.

The earliest a transaction can possibly close is SEVEN days AFTER the initial closures have been ISSUED by the lender (delivered by mail, e-mail or in person).  This is assuming NO re-disclosure is required - let me discuss that.

Mortgage Lenders are now required to RE-DISCLOSE if the APR changes by more than .125% (whether it's bad or good), if the fees and charges change by more than 10% or there is a change in loan terms.  THREE business days must pass in the event of redisclosure.

The three business day waiting periods begin when the consumer actually receives them.  (I try to meet with my clients, so that I can hand them the disclosures directly.)  When sent by e-mail, which we at Landover do over a secure line with encrypted e-mail, we are notified when e-mail is received.

Just to add to the fun, NO MONIES can be collected from the borrower, with the exception of a "bona fide and reasonable" credit report UNTIL they receive the initial disclosures.  Another exception to this rule is in regards to collecting for an appraisal up front.  Up-Front appraisal fees can be collected if the loan application is taken in person and the disclosures are distributed at that time.

On a side note, HVCC (our lovely appraisal CODE), requires the borrower receive a copy of the appraisal three days prior to closing.

I'll keep you posted when our next set of changes come to market.  Until then, have a GREAT day!

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Mike Frazier
Carousel Realty of Dyer County - Dyersburg, TN
Northwest Tennessee Realtor

Dave,

Thanks for sharing these changes with us. Is there anything in the new rules that says buyer or borrower should be able to see the HUD1 before closing? We normally do n ot see the HUD1 here in my area until the closing. We used to be able to see it a day before closing.

Jul 22, 2009 03:14 AM #1
Rainer
6,153
Dave Andrews
Landover Mortgage - Gig Harbor, WA

My rule of them is to provide a new GFE whenever there is a change to it.  There is nothing in the law that says they are to receive a HUD-1 prior to closing.  Although I send one out as soon as I get mine from escrow (if you work with escrows).  I wouldn't be surprised to see that added to a law or instituted somewhere in the future.

As of right now, we only need to provide the HUD-1 prior to closing if the APR changes by an .125% or 10% change in closing costs.

What would you prefer prior to closing, a HUD-1 or a copy of your appraisal?

I personally would want the HUD-1.

Jul 22, 2009 11:50 AM #2
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Rainer
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Dave Andrews

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