Congress continues to change the way mortgages are done. Effective July 30, 2009, there are several changes that will take place per the HERA/MDIA laws recently passed.
The new laws require the borrower to receive the initial disclosures and have 3 days to review BEFORE we can collect any type of fees. (Including appraisal fees).
Because of the new HVCC (Home Valuation Code of Conduct) - the borrowers now have to charge to a credit card or debit card the appraisal fee. Basically, what the new change means is that we cannot order an appraisal until 3 working days after the initial disclosures have been signed here at our office.
Further, the borrowers will receive "initial disclosures" from the mortgage company when the file is actually submitted. The new law stipulates that a purchase transaction (where financing is concerned) cannot close until 7 business days after the initial disclosures are sent from the mortgage company. Not the disclosures we give them here, but the ones they receive in the mail from the mortgage company.
If for any reason, the fees or loan amounts need to be changed, a "re-disclosure" has to be sent by the mortgage company. That will further delay a closing because if fees change, and a re-disclosure is required, the law stipulates the closing cannot occur until six business days after the mortgage company sends the new disclosures to the borrower.
Traditionally, a closing date is established by the borrower and seller when the sales contract is finalized. While the practice of establishing a closing date at contract signing will continue, please be aware of the MDIA guidelines and the restriction they impose about the time frame of when a transaction can actually close.
We all will survive this market and the sweeping changes that continue to bombard us. But be prepared to hear,"Will This Loan Ever Close"?
RE/MAX Unlimited 870 W. Church St. 731-249-5376 http://unlimited.tennessee.remax.net
Linda Lipscomb 731-695-1118 http://LindaLipscomb.com
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