To Discourage Rush Closings, Reduce Last Minute Rescues, and Cut Down Closing Table Changes
Both buyers and sellers need to be aware of the changes brought about by the HVCC (see article below) and the Housing and Economic Recovery Act (HERA), which goes into effect July 30, 2009. HERA is intended to better inform the consumer, slow down the settlement process, and ensure more accuracy and transparency in the lending terms.
HERA requires that a lender must provide two initial disclosures to the customer — the Truth in Lending (TIL) statement and the Good Faith Estimate — before the lender can collect any fee to process an application for a loan. The lender can then collect the application fee, but he cannot order an appraisal before the fee is collected. The customer must receive the disclosures from the lender at least seven business days before closing.
Further, if the Annual Percentage Rate increases by more than 0.125% from that stated in the initial TIL statement, the customer must receive from the lender at least three business days before closing a Pre-Closing TIL statement, which is the final binding TIL statement.
It is wise to plan for at least a 30-day close. Here are 4 things you can do to help keep the process on track:
- Obtain a credit-checked preapproval before you start to shop for a home. (Applying in person, instead of over the phone or Internet, may help expedite the process.)
- Upfront and throughout the process, review the timeline and potential impacts with your home mortgage consultant so you can keep your REALTOR or Builder informed.
- Review the initial disclosure packet you receive. It contains important details about your loan transaction. Make sure to pose any questions to your home mortgage consultant.
- Review the appraisal delivery disclosure and determine whether or not you wish to waive the 3 business-day prior-to-close review period.
Hill Slowinski, serving clients in DC, MD, and VA
WC&AN Miller Realtors, A Long&Foster Company
4701 Sangamore Road, Bethesda, Maryland 20816
Cell: 301-452-1409 Direct: 301-320-8430 Ofc: 301-229-4000