Rosey Koberlein, CEO of Long Realty, wrote an Op-Ed article in yesterday’s Arizona Daily Star newspaper explaining in layman’s terms the new mortgage rules that are being federally implement early next month. Sellers and buyers will be affected, yet those we mention it to haven’t even heard of them. Ahead of the curve, as always, Long Realty has been educating its agents in seminars for a couple of months now so we’re prepared to help you through the process.
Here is a link to the Op-Ed article: http://tucson.com/news/opinion/column/guest/rosey-koberlein-new-mortgage-rules-affect-buying-selling/article_51735d17-5430-5342-8256-47e6f1fcb36e.html#.VgLzErMR2vw.email
Or please read the article that I have cut and pasted into this Blog:
Beginning Oct. 3 the Consumer Financial Protection Bureau (CFPB) is implementing new and improved mortgage rules that will keep you more informed on your mortgage loan details and the closing costs associated with your home purchase.
The CFPB was created by the Dodd-Frank Wall Street Reform Act to provide consumers the information they need to have more control of their economic lives. Mortgages are complex transactions that may include risky features, so the bureau has issued a rule that will simplify and improve disclosure forms for mortgage transactions, thereby better protecting consumers.
What is changing? Earlier, simpler and more disclosure information to the buyer about the costs associated with the loan for one. The rules also require the buyer have three days to review the new closing disclosure form prior to closing. No exceptions. This gives the buyer the opportunity to review the disclosures, time to ask questions and deposit funds for closing.
With these new rules come some time frame requirements that your lender and real estate agent can help manage for you. Certain requirements have to be done further in advance of the closing date than before, changing the normal purchase contract timeline (from full acceptance to the time your purchase is complete) from approximately 30 days to 45 days.
Under the new rules, the lender plays a bigger role in the disclosure process. In the past, usually the escrow company has originated all the documents that had do to with the fees and closing costs. After Oct. 3, a new closing disclosure form (replacing the Hud-1) will typically be prepared by the lender. This means more communication between the parties supporting your purchase is critical to an on-time closing.
What can you do to prepare yourself for these changes? Ask good questions of your real estate agent and lender. For instance, are they familiar with these new mortgage rules and do they understand them? Do we have enough time to get everything done before we close? What should I avoid doing that would cause us to not close on time?
Lastly, the new rules will help standardize documents and disclosure of fees across all lenders, making it easier for you to compare as you shop for a loan. As you choose a lender, take into consideration not only its rates and fees but also how well prepared the lender is to accommodate the new rules and disclosures.
While these new regulations may initially slow down the typical financed transaction, those effects can multiply if the transaction is complicated. Simultaneous closings, stacked contingencies and other complex transactions may not be as easily accommodated by some lenders and title companies. Your Realtor can help guide you to a team equipped to handle those complexities.
The new mortgage rules will ultimately be beneficial for consumers because it’s always better when there is a clear understanding of the process and expenses early on in the transaction.