Big Changes Are Here Why Consumers Need To Know What To Expect In Future Real Estate Closings When Y

Dated: 11/18/2015

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Big changes are here!!! Why consumers need to know what to expect in future real estate closings when you are obtaining a mortgage.

What is the CFPB? It's the consumer financial protection bureau and it's federally regulated.

The entire industry is now being affected by these changes that make it easier for the general public to understand the documents that are part of a real estate transaction.

Mortgage lenders must give you new, easier to use disclosures about your loan three business days before closing. This give you time to review the terms of the deal before you go to the closing table.

Here are examples of rules that could extend out the 3 days:

The APR (annual percentage rate) increases by more than 1/8 of a percent for fixed rate loans or 1/4 of a percent for adjustable loans . A decrease in APR will NOT require a new 3 day review if it is based on charges to interest rate or other fees.

A prepayment penalty is added, making it expensive to refinance or sell.

the basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest only payments.

NO OTHER changes require a new 3 day review..

There has been much misinformation and mistaken commentary around this point. Any other changes in the days leading up to closing do not require a new 3 day review, although the lender will still have to provide and updated disclosure.

For example the following circumstances do NOT require a new 3 day review:

Unexpected discoveries on a walkthrough such as a broken refrigerator, even if they require seller credits to a buyer.

Most changes to payments made at closing, including the amount of the real estate commission taxes and utilities proration, and the amount paid into escrow.

Typos found at the closing table.

Learn more at www.consumerfinance.gov

What is the new TRID rule?

TRID consolidates four existing disclosures required under the TILA and RESPA for closed end credit transactions secured by real property, the appraisal notice required by the Equal Credit Opportunity Act, and the servicing notice required by RESPA into 2 forms:

A loan estimate (LE) that must be delivered or placed in the mail no later than the 3rd business day after receiving the consumer's application, and a

Closing Disclosure (CD) that must be provided to the consumer at least 3 business days prior to loan consummation.

These new rules DO NOT apply to:

Home Equity Lines of Credit (HELOC)

Reverse Mortgages

When does this start? It started on October 3, 2015 and the new integrated disclosures must be provided by a creditor or mortgage broker that received an application from a consumer for a closed end credit transaction secured by real property.

DEFINITION of 'Closed-End Credit'

A loan or extension of credit in which the proceeds are dispersed in full when the loan closes and must be repaid, including any interest and finance charges, by a specified date. The loan may require periodic principal and interest payments, or may require the entire payment of principal at maturity.


To read more on this topic go to:

http://www.consumerfinance.gov/regulatory-implementation/tila-respa

The statement for understanding the new rules is about 14 pages long. Also, call a reputable loan officer for more detailed explanation of the new rules and how they could affect you. As a consumer these changes could affect you, so be prepared by being educated with the new rules.

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Pamela Camiscioni

Pam’s a residential agent for over 20 years servicing clients from first timers to retirees covering all aspects of the residential real estate spectrum from listing your home to finalizing your new....

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