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New truth in lending act that goes in to affect July 30th, what do you think??

By Marchel Peterson

Real Estate Agent with Results Realty

July 21, 2009 01:49 PM

New Truth in lending law coming in to affect July 30th WOO HOO my clients were able to get a cut on their interest rate. They are doing a VA loan and were eligible for one cut if the interest rates dropped and they did. I got a call from their lender today saying the interest had dropped but it would have to be re-submitted and would delay closing; would the seller agree. In this case they are already in the house (leasing back before closing) so they can just pay the seller's for the extra days; no big deal as it is only a few days.

This would not have been the scenario had this happened after July 30th. With the new Truth in Lending Act that goes in to affect July 30th they would have had to wait 7 business days to go to closing. Perhaps the seller's would have agreed to the extra time but who knows; there is quite a bit of difference between a few days delay and almost 2 weeks.

I'm a bit dumbfounded as to the reasoning behind the new law. I'm sure it has to do with what has happened in the lending industry but there will be no more quickly flipping to another lender when things don't work out or even flipping to a new loan.

I tried to find the new law but when I did a Google search this is what I found http://www.fdic.gov/regulations/laws/rules/6500-1400.html. I'm sure it is in there somewhere but I searched around and did not find it. So someone please explain to me why this is good?

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Robert Vegas Bob Swetz

Las Vegas, NV

Marchel - These new laws keep coming out and they should all benefit home owners & home buyers, but they don't! We need a miracle to get this economy back on it's feet!

Jul 21, 2009 01:57 PM

Myrl Jeffcoat

Sacramento, CA

Greater Sacramento Realtor - Retired

Marchel - The bigger the circle of light with these new laws and changes, the larger the perimeter of darkness:-)

Jul 21, 2009 02:04 PM

Mary Douglas

United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO

REALTOR, Red Feather Lakes, Colorado

Hi Marchel, I don't have access to the complete new rule -- it seems if the change was in the buyers favor, i.e: interest rate decrease, the waiting periods could be waived. Only if any changes were to the buyers detriment, they would have new numbers and time to "review"- thus no surprises at the closing? I like Myrl's description of the perimeter of darkness...like a permanent eclipse of logic :-)

Jul 21, 2009 02:10 PM

George Souto

George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT

Your Connecticut Mortgage Expert

Marchel, I don't like the new change to the Truth In Lending Guidelines, but after July 30th they would only have to wait 7 days if it is the initial TIL. If the initial TIL has been issued for more than 7 days, but the APR changes by .125% up or down, then a new TIL will have to be given to the Borrower 3 days before they can close.

I hope that makes things a little clearer for you. 7 days for the initial TIL and 3 additional days if a new one has to be issued after that.

Jul 21, 2009 02:31 PM

Dale Baker

Baker Energy Audits and Commercial Properties Inspections - Claremont, NH

New Hampshire Relocation Real Estate Information

Howdy there Marchel

I just can't of one good thing this new law is going to do for home buyers and sellers. Maybe what this one is really for, is the banks them selves. So folks can't flip over to a new loan.

Signature

Jul 21, 2009 02:39 PM

Dan and Amy Schuman

Howard Hanna Real Estate Services - Solon, OH

Luxury Home Specialists

I didn't realize there was a change in the TIL. Thanks for bringing it up and I appreciate George's ( above ) explanation.

Jul 21, 2009 02:51 PM

William Johnson

Retired - La Jolla, CA

Retired

Hi Marchel, Like minds...... I wrote a blog on this yesterday, done as a localism post since I am working on trying to get some Google Juice on San Diego Real Estate. Most people were not getting the impact of the changes though. I thought they were significant and after the 30th we will see what additional delays they spell for Buyers with tight sales contracts and lenders that might not be 100 on top of things.

Jul 21, 2009 03:34 PM

Trey Thurmond

BCR Realtors - College Station, TX

College Station , Texas Homes

Marchel

I cannot understand this one either. I am certain this is just the tip of the iceberg of mass confusion in Washington right now.

Jul 21, 2009 04:05 PM

Shirley Parks

Sands Realty 210-414-0966 - San Antonio, TX

Broker, 210-414-0966, San Antonio TX Real Estate

Hi Marchel, I'm dumbfounded by a lot of things the government does but thanks for posting about this.

Jul 21, 2009 04:12 PM

Marchel Peterson

Results Realty - Spring, TX

Spring TX Real Estate E-Pro

ROBERT, these laws are making no sense. It is like they are over compensating.

MYRL, I'm afraid we are about to descend in to a black hole.

MARY, The logic escapes me.

GEORGE, That helps a little I think but I think it shouldn't be this confusing.

DALE, It appears that it will make it harder to flip fast.

DAN & AMY, I didn't realize either until the lender brought it up today.

WiLLIAM, I will have to check your post out. I did make this one public but did not write to localism. I did add it to my outside blog though.

TREY, Mass confusion in Washington; imagine that!!!!!

Jul 21, 2009 04:14 PM

1~Judi Barrett

Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 - Idabel, OK

BS Ed, Integrity Real Estate Services -IDABEL OK

I am wondering how much is in the new law that we do not even realize will affect the transaction in not necessarily good ways.

Jul 22, 2009 12:15 AM

Joe Harris

Morgan Financial - Melbourne, FL

I am not for over regulation of an industry, however, I am for protecting the consumer, and weeding out un-professionals that can not get "close" to the target. I recently wrote a blog on this topic, as you can find it here.

Jul 22, 2009 01:05 AM

George Souto

George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT

Your Connecticut Mortgage Expert

Marchel, you are right it should be this confusing, but the more they regulate the more confusion there will be.

I do need to clear up one thing. The 7 and 3 day periods start from receipt of the TIL, so if the TIL is sent out by mail, you need to add 3 days to both the 7 and 3 days.

How is that for making it a little more confusing :)

I wrote a blog with a lot more detail on this last Saturday the 18th.

Jul 22, 2009 01:49 AM

Kate Kate

San Diego, CA

Marchel, the problem as I see it is the delivery of the information in the regs. I actually like reading disclosures, I know call me crazy, but this one is not my favorite to wade through.

We need regulation. No one would argue with that keeping consumers' interests in mind but I am not convinced more confusing regs will help more than hinder. Kate

Jul 22, 2009 03:20 AM

Cynthia Tilghman, Realtor® Onslow County NC Home Specialist

Kingsbridge Realty, Inc - Hubert, NC

Marchel,
Oh goody, more government rules and regulations to deal---just what we need, right?

Jul 22, 2009 01:30 PM

Sidney Kutchuk - Realty Works Temecula Kutchuk - Realty Works Temecula

Realty Works Temecula - Temecula, CA

Realty Works Temecula

Marchel: This new law will result in many, many, many delays!

Jul 26, 2009 08:27 AM