My New Blog

Change is inevitable, except from vending machines! I want to share with you some of the rules and regulations that mortgage lenders must comply with--and how working together, we can insure smoother transactions & closings! There were 2 new laws that affect all of us:

The Mortgage Disclosure Improvement Act

• Uniformity – Lenders must all use the same Good Faith Estimate
• Business Days – Defined as Monday thru Saturday, EXCEPT holidays
• Re-disclosure – If APR rates changes an 1/8% over original disclosure
• Waiting Periods – Time to review disclosures and HUD 1
• GFE – 10 Days
• Appraisal – 3 days (Covered by HVCC law)
• Comparison Shopping – GFE encourages rate comparisons from 3 lenders

RESPA & New Good Faith Estimate

• New Good Faith Estimate, 3-page Form ALL lenders must use
• New HUD Settlement Costs Booklet
• GFE needs to match HUD1 at closing (some tolerances apply)
• No “waiting time” Waivers Allowed
• No Last-minute negotiations between buyers & sellers

What to Advise your Clients to Insure Smoother Transactions

• Lock interest rate 10 days before closing
• Encourage buyers to SHOP for their mortgage BEFORE buying a home. (Switching lenders starts the disclosure (and waiting periods) all over again)
• Review “good faith WORKSHEET” (not the uniform GFE) with your clients
• Read the HUD Settlement Cost Booklet (first pages describe the role of real estate agents)
• Add clause to purchase agreement with “automatic extension” due to RESPA/GFE delays
• Make sure clients get a REAL pre-approval
• Ask Title Company to Provide “mock” HUD1 at least 10 days before closing