There are new federal regulations that WILL DEFINITELY impacts your closings starting 7/30/09. These regulations, HVCC and HERA -HOEPA, are designed to protect consumers by making them more informed about their home loan choices. A few highlights:
-HVCC: Requires that all consumers receive a copy of their appraisal no less than 3 days prior to their closing; therefore, closings should not be scheduled for at least 10 days AFTER the lender receive the appraisal to allow sufficient time to underwrite the appraisal, to mail the appraisal, and to provide 3 days for consumer review.
1. The EARLIEST a consumer can close their home loan is 7 business days AFTER receipt of initial disclosures. Disclosures are not sent to the consumer until after we receive the initial loan decision. (Encourage your clients to get a preapproval as soon as they start the home buying process!)
2. Lenders are now required to issue a Truth-In-Lending (TIL) Disclosure at least 3 business days prior to closing. If the actual APR at closing is .125% more or less than the APR in the initial TIL, lenders will need to re-disclose a new TIL and the closing will have to be rescheduled for 4 business days later (this will SIGNIFICANTLY impact the ability of Mortgage Brokers to meet your closing deadlines!)
There are several other changes under HERA-HOEPA which can impact your closings. Without going into much detail, I would suggest following these guidelines to insure a positive client experience:
1. Encourage your clients to get a real pre-approval at the beginning of the home buying process - make sure that the lender reviews these federal guidelines with them at that time.
2. Identify the closing attorney as soon as the contract is written and obtain their fee sheet as their fees can have an impact on the APR.
3. DO NOT schedule a closing date until at least 30 days after the contract is executed to avoid missed closings.
Anita C. Young, Broker
Milicki and Associates
110 Evans Mill Drive, Suite 103, Dallas, Georgia 30157
Office: 770-874-2022 | Fax: 770-874-2027