A new rule from the Consumer Financial Protection Bureau went into effect Oct. 3 requiring lenders to give consumers more time to review their loan documents. Mortgagors must give borrowers the terms of their loan and final charges & fees at least 3 days before the closing (7 days if sent by mail). It is designed to protect you from surprises at the closing table. Sounds pretty simple, right? Well the reality is, it is a massive change in the way lenders do business from new forms to new timetables. The 3 day period is mandatory and this waiting period can start over again if one of 3 changes occur: 1) The annual percentage rate increased more than 1/8th; 2) The loan product changes like switching from a fixed rate to an adjustable; or 3) A pre-payment penalty is added. Other alterations don’t require a new 3-day review like revisions to taxes, utility prorations, etc.
Until lenders have some time under their belt in dealing with these new regulations, buyers & sellers need to be prepared. 60 day closings may be the normal, last minute changes most likely will not be authorized, required paperwork will need to be completed earlier, and buyers & sellers should have a backup plan in the event something triggers a new 3-7 day waiting period and you can’t close as scheduled. Contact me if you are looking to work with a knowledgeable REALTOR® who can help you successfully navigate the buying or selling process! Donna Forest, Broker Associate, 603-526-4116, www.DonnaForest.com, firstname.lastname@example.org.