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I've read some posts or heard some mentions of changes coming to the mortgage industry or real estate industry in Oct & curious if someone can tell me what exactly is changing. From the posts it sounds like it could make the industry more challenging but I attempted to do a internet search & all I could find was in August of this year that a more explanative form outlining mortgages expenses/costs had to be presented as well. Appreciate any further info.
Thanks for the link- It doesn't look too onerous to me. I'm not sure what all the comments have been about it will be harder to sell a home in Oct after the changes take effect have been about. Not sure about the 3 day rule but as long as APR doesn't rise should be non issue.
The only thing I can see effecting home sales would be if interest rates rise.
This is a story of the left catering to their cronies in the legal profession, reducing their liability in real estate closings and simultaneously giving them a reason to significantly raise real estate closing fees, while the CFPB and their ilk can claim to be protecting the consumer whilst peeing on their legs.
Guidance is being provided via enforcement action, not via clear rules distribution. And CFPB gets a slice off any fines they levy. "Conflict of Interest" fueled by fiat is the way of the future.
There WILL be impact to consumers. ALTA best practices updates play into it too.
A $500--$600 closing will soon be a $1000--$1200 closing.
A partner of one of the prominent local closing firms says that they will price FSBO work to avoid doing it.
Lenders will have all the liability, and all the say over whether a transaction closes. And, since liability that previously fell to the closing agent/attorney now rests with the lender, some lenders will be very conservative in reading the rules, without a care about the consumers involved.
Right now, back to back closings are possible. I expect that to change soon. Bring it up in a meeting and listen to people laugh.
I have a TRID Powerpoint that I will post tomorrow. Basically, MJ above has it right, another fee-grab in Consumer Protection's clothing, IMO.
Regarding closings, lenders who can go to docs prior to having the file Cleared to close, and make the Wire be the final firewall, will be ahead of the game.
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Lenders will have all the liability, and all the say over whether a transaction closes. And, ...liability that previously fell to the closing agent/attorney now rests with the lender...
Gee, after the last decade of lenders making creatively wonderful decisions, I can't wait to trust them more than the attorneys.
In my area, most of the changes have already been implemented so it's not going to be a huge change. The 3 day disclosure might come into play, but it's very rare that terms would change that close to closing anyway.
The new "closing form" is a joke. It specifically states on the form that the buyer is signing it as a disclosure and doesn't have to agree with the amounts listed. It's not an end-all like the HUD-1 was. Also, sellers no longer have a closing statement to sign. The title companies in my area are keeping their basic closing form intact and will have the sellers sign that to signify they actually did sign something to acknowledge the signing at closing, but nothing official.
The lenders have said over and over that it won't effect rates or fees to the consumers, but I bet 20 bucks that it does! There is no way the lenders can take on that much more liability and fees out of pocket without raising their fees and rates. Yes, out of pocket fees because if fees are different than what they quoted, they have to eat them!
10% tolerance for fixed fees has been in place for years. The mandatory waiting periods are the killer. Minor change? Gotta wait three days. Slow borrowers get you Cleared to Close the day before closing? It's now 3 business days before closing. Appraisal take a long time? You're waiting three business days AFTER the CTC and Consummation doc is received by the borrowers. And the only way the borrower can waive that 3 biz day waiting period is with proof that the home being purchased will be foreclosed or some snowball's chance of a situation. No "everything is in a moving truck in front of the house, we have nowhere to stay with our four kids and six dogs, and it's the Thursday before Labor day." - - under that scenario, that Thursday closing, even with everything in place on that Thursday, becomes a NEXT Wednesday closing.
Disclosure time frames for the LE will come into play to a lesser extent. But, to avoid stress, and if it does not jeopardize the deal, I would write contracts with 45 day escrows at first. One good thing is that the lender will fully prepare the settlement statement instead of playing ping-pong with Title.
In addition to 45 day escrows when possible, I am urging Realtor partners to get me the contract while the ink is still wet. There is no more waiting until tomorrow, or after the weekend, every day matters!
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