Recently I attended a symposium at the Federal Reserve in Boston. The focus was a forecast of economic trends in 2013, and how these will affect the real estate industry. I am writing a series of blogs from the information shared by the panel of speakers.
THE TOP 5 CHANGES IN THE MORTGAGE INDUSTRY FOR 2013
#1: New HUD Forms at real estate closings:
Among the 400 new rules imposed by the Dodd-Frank Act, are mandated changes to the HUD document signed by buyers and sellers at closing.
The old HUD was a 2-page (legal sized) document. It was deemed too difficult for consumers to understand.
The new HUD-1"simplifed" form is 5-pages long.
Retraining and reprinting to accommodate the new form has a cost, and you can be assured these costs will be passed on to consumers in the form of higher closing costs.
The other requirement that will most dramatically affect closings is the rule that Borrowers must receive this new disclosure statement no less than 3 days prior to closing. If it there is some kind of last-minute change to the paperwork, the clock on the 3-day wait starts all over again - A delay of game resulting in a serious penalty...
Common situations can now derail a closing. Take, for example, the requirement that any adjustment between the parties in an amount greater than $100 must be on the HUD.
In the "old days" if you sold a house with oil heat, and you would collect a check at closing from the buyer for the oil in the tank. If you remember this on the day of closing, the HUD must be changed, and the 3-day waiting period begins again. Head's up to realtors, sellers, and buyers... these situations need to be handled like "don't ask, don't tell" - or done quietly in the basement boiler room...
As if it wasn't hard enough to get everyone to a speedy closing...
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