Sunday, July 19, 2009

Provided by Alan Vanderheiden At Regions Bank on Amelia Island.

New government regulations for mortgage loan transactions have recently been enacted. These new regulations are designed to give the customer additional time to make informed decisions but they will increase the time it takes to process and close a loan. They take effect July 30. Here’s a brief overview.

· Borrowers must receive a copy of their appraisal at least 3 business days prior to closing. This is not too big a deal. Most appraisals are completed in time to meet this deadline.
· Mortgage disclosures have to be received by the customer 3 business days after an application is made. No fees (appraisal or application) can be collected until the customer has received their initial disclosures. Again, not too big as this happens in the first week of application
Here’s the biggie. If the APR on the TIL changes more than .125% on a fixed rate loan or .25% on an ARM from the rate on the initial disclosure, a new TIL has to be sent to the customer and we wait three more business days to close. For example, if the closing date gets moved from the last few days of the month to the first few days of the next month, the pre-paid interest will be much higher and the APR will adjust outside the limits. A new disclosure will have to be sent and we wait three days. If an interest rate lock or re-lock effects the pricing of the loan the APR can increase…a new disclosure will have to be sent and we wait three days. If the loan amount changes it can effect the APR….a new disclosure will be sent and we wait three days.

John Holbrook - Realtor 904-415-0171

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