My Last Settlement BEFORE The Rules Change- Oh MY!!!
Interesting, interesting. I just finished my last settlement before the RULES change. What rules you may ask? The TIL rules.
TIL or Truth in Lending will be forever changed come the end of this month but I have been hearing from the lenders and title companies that I deal with that most of them are instituting them at the beginning of this month. Why wait for the inevitable they are saying. So basically this is what the rule is saying:
In any case in which the disclosure statement under
subparagraph (A) contains an annual percentage rate of interest
that is no longer accurate, as determined under section 107(c),
the creditor shall furnish an additional, corrected statement
to the borrower, not later than 3 business days before the
date of consummation of the transaction.
This means that if any changes are made one, two, three, four days before closing then the closing will have to be pushed back a few days. The changes HERA is talking about are outlined below. Courtesy of Ann Burke of Prosperity Mortgage.
HERA-HOEPA Disclosures Fees and Loan Data that Impact the APR 1 Last updated 4/20/09
|Government Recording & Transfer Charges||Lender Fees|
|GA Residential Mortgage Loan Fee||Application Fee|
|Recording Fee-Assignment||Assumption Fee|
|Recording Fee-Misc.||Commitment Fee|
|Recording Fee - Modification||Construction Disbursement Fee|
|Recording Fee - Subordination Agreement||Discount Points|
|3rd Party Fees||Escrow Waiver Fee|
|Automated Valuation||Extended Lock Fee|
|Bond Compliance Review Fee||Float Option/Return to Float|
|Bond Document Fee||Lock In Fee|
|Bond funding||Modification Fee|
|Bond Investor Market Fee||Mortgage Broker Compensation|
|Bond Loan Adjuster Fee||Origination Fee|
|Bond Loan Review Fee||Processing Fee|
|Bond Partic/Commit/Reserv||Rate Lock Extension Fee|
|Bond Underwriting Fee||Supplemental Origination (Reno)|
|Broker Compensation Fee||Underwriting Fee|
|Consultant/Plan Review||Work Escrow/Holdback Fee|
|Courier/Messenger 3rd Party||Title/Closing/Settlement Fees|
|EDD to 3rd Party||Attorney's Fee|
|Fax/Copies/Postage 3rd Party||CIP / Patriot Act Search|
|Final Inspection||Closing/Escrow/Settlement Fee|
|Flood (Life of Loan)||Closing Protection / Service Letter|
|HOA Certification Fee||Conventional Mortgage Insurance|
|Home Warranty||Document Review to 3rd Party|
|Homebuyer Couns/Educ Fee||Escrow / Loan Tie In Fee|
|Mortgage Insurance Application Fee||PMI / MIP|
|NHS Origination Fee||Recording Service-Title Co.|
|Processing Fee 3rd Party||Servicing Fee|
|Program Fee - Bond/3rd Party Fee||Sub-Escrow Fee|
|Re-Draw/Cance-3rd Party Fee||Temporary Buydown|
|Reconveyance Fee||Trust Review|
|Release Fee/Satisfaction||TX Policy Guaranty Fee|
|Rural Housing Guarantee||Upfront Mortgage Insurance|
|Tax Service Fee||VA Funding Fee|
|Transfer Fee||Work Escrow / Escrow Holdback Fee|
|Underwriting Fee 3rd Party||Loan Data|
|Verification Fee||Per Diem Interest|
|WHEDA MPI Plan||Loan Amount|
|Wire Transfer 3rd Party||Interest Rate|
|Product - including Home Equity Loan|
As you can see from the list there are many items on it that I, as an agent, could be impacted by. Case in point. A home warranty is being paid by the Seller, the Buyer or even by an agent but is forgotten until the last minute. Oops. This means a change in the TIL and in turn a change in the waiting period until settlement. Problems at walk through before settlement. Oops. No credit changes on HUD from Seller to Buyer, No monies changing hand at the table either. Yikes.
In other words we all need to be sure we have everything in place way ahead of time. Walk throughs may have to be done twice on some occasions. All paperwork needs to be to the settlement company from all parties before the clock starts ticking and the 'NO GO ZONE is entered.
Now more than ever, we need to ALL work together to ensure a smooth settlement. Interaction between Buyers, Sellers, Agents, lender and settlement company needs to be open and NON ADVERSARY.
Cause when the clock starts ticking it makes no difference who's fault it is, settlement WILL NOT happen without the proper 3 day TIL in place.
About the Author Martha Brown- As a third generation Annapolitan I love to write about my experiences in and out of the real estate market. Licensed since 1992 all with Long & Foster I am a Certified Residential Specialist (CRS) and a Seller Representation Specialist (SRS) whose passion is homes in the Annapolis MD area and surrounding communities. My goal is to help my clients understand the real estate market and to then make sound real estate decisions.
Martha can be reached at 410-260-2800 ofc or
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Martha Brown of Long & Foster Real Estate.
320 Sixth Street
Annapolis, MD 21403