Juicy Estates: Mortgage Blog

REG Z For Realtors – Need To Know Items

 The Mortgage Disclosure Improvement Act of 2008 (MDIA) mandates become effective at the end of this month and will have a dramatic affect on residential real estate transactions.  All real estate professionals involved in residential transactions need to be aware of these changes and need to proactively manage their clients transactions with these facts in mind.

 

In short closings can and will be delayed by these new rules.  These rules will superseed the terms and conditions put forth in the FAR contract potentially putting buyers escrow deposits at risk and/or creating escrow disputes.  

 

Here are a few bullet points of the need to know items:

• Consummation of the loan cannot take place earlier than the seventh business day from the day the early Truth In Lending was provided
• If the APR on the loan changes a new Truth In Lending disclosure must be sent to the borrower and the loan can not be consummated for three business days
• The disclosure periods can be waived only if there is a “bona fide personal financial emergency”.  Loss of escrow deposit due to non performance by the buyer as a result of the new disclosure rules does not constitute a “financial emergency”.

APR and thus the Truth In Lending disclosure on the loan can change for very small changes in closing costs such as attorney’s fees, changes in interest rate due to market changes, change in loan amount etc.  These changes in APR while the settlement statement is being prepared can and will delay closings.

If you have questions or concerns or would like to discuss stratigies that will help you and your clients avoid these pit falls feel free to call or write.

This entry was posted on Wednesday, July 15th, 2009 at 3:29 pm and is filed under Home, Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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