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

You can NOT use the tax credit as a down payment

DON'T BE FOOLED!!!! AS OF TODAY you can NOT use the tax credit for a down payment

Yes there has been a lot of discussion about this topic but it is NOT an option currently. Those statements were made by the SECRETARY of HUD yesterday and a HUD/FHA letter was published on the website Monday night.

BUT……..the new DIRECTOR of HUD pulled that Mortgagee letter this morning and is no longer even available on the HUD website.

Here is the link to all Mortgagee Letters:

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/

Notice ML 09-15 has been pulled.

This theoretical program is now off the table

Market Watch for Monmouth County NJ

In January, the prospect for a strong Spring Real Estate Market is bleak as under contract properties were down by 27% from a year ago and the economic and financial crisis continue to depress home sales.

The under contract properties of this January are down 48% from January 2005; however New Jersey's actual foreclosure rate in January was .02% ranking it 32nd in the nation. By comparison the national average rate is .05% more than double that in New Jersey.

ON the other hand with mortgage rates dropping in the last couple of weeks,there may be a gentle 'Spring Surge' in home sales as long as mortgage rates fall and remain below 4.75% by the end of March.

Hope for Homeowners

FHA Mortgage Rescue Program

Part of the Housing and Economic Recovery Act of 2008, passed in July 2008, includes provisions to help struggling homeowners replace their mortgages with 30-year fixed-rate loans backed by the Federal Housing Authority (FHA). Available from October 1, 2008 through September 30, 2011, the Hope for Homeowners program is designed to help homeowners who can no longer afford their monthly mortgage payments and have mortgages that exceed the market value of their homes.


Find Out More
More information about the Hope for Homeowners program is available online at www.HUD.gov (type “Hope for Homeowners” in the search window) or by calling (800) 225-5342. Both resources also offer information about the FHASecure program -- a program designed to help qualified homeowners who may be facing foreclosure due to an interest rate increase on their mortgage.