Showing posts with label closings. Show all posts
Showing posts with label closings. Show all posts
Sunday, January 12, 2014
Tuesday, July 28, 2009
New Truth In Lending Rules can cause a 3 day delay for closing
New Truth In Lending Rules for Mortgages
Here are the new rules for TIL (truth in lending) forms for all mortgages applied for after July 30th, 2009.
• The “early” TIL disclosures must be delivered or placed in the mail not later than 3 business days after the creditor receives the consumer's written application, and at least 7 business days before consummation of the transaction. This is a new “waiting period.”
“business days” do not include Saturday or Sunday. Similar to attorney review.
• If the annual percentage rate (“APR”) on the disclosure becomes inaccurate, by increasing or decreasing changes by more than 1/8 (.125%), the creditor must now make corrected disclosures to the consumer with a revised APR. The consumer must receive the corrected disclosures no later than 3 business days before consummation.
What does this mean?
If any of the fees change on the final settlement statement to a great extent compared to the GFE (good faith estimate) that was signed by the borrower at time of application (increase OR decrease in fees), a new TIL(truth in lending) disclosure will have to be generated and you have to wait 3 more days before you can close.
So a lender can’t have a higher or lower rate by more than .125% at closing AND the lender fees can’t go up or down by more than a couple of hundred bucks or you will have to wait another 3 days. Lender credits of any significant amount will cause a 3-day delay, even if it benefits the buyer.
for more highlights on this new rule
Here are the new rules for TIL (truth in lending) forms for all mortgages applied for after July 30th, 2009.
• The “early” TIL disclosures must be delivered or placed in the mail not later than 3 business days after the creditor receives the consumer's written application, and at least 7 business days before consummation of the transaction. This is a new “waiting period.”
“business days” do not include Saturday or Sunday. Similar to attorney review.
• If the annual percentage rate (“APR”) on the disclosure becomes inaccurate, by increasing or decreasing changes by more than 1/8 (.125%), the creditor must now make corrected disclosures to the consumer with a revised APR. The consumer must receive the corrected disclosures no later than 3 business days before consummation.
What does this mean?
If any of the fees change on the final settlement statement to a great extent compared to the GFE (good faith estimate) that was signed by the borrower at time of application (increase OR decrease in fees), a new TIL(truth in lending) disclosure will have to be generated and you have to wait 3 more days before you can close.
So a lender can’t have a higher or lower rate by more than .125% at closing AND the lender fees can’t go up or down by more than a couple of hundred bucks or you will have to wait another 3 days. Lender credits of any significant amount will cause a 3-day delay, even if it benefits the buyer.
for more highlights on this new rule
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