ENVOY MORTGAGE Blog

Industry Changes - Economic Commentary

By Gary Bussard, Envoy Mortgage

The mortgage industry is undergoing many changes to help provide homebuyers and homeowners better information about home financing which mandate many new requirements and are now in effect. Hopefully this will help you understand some of the changes and to help guide you as what could affect the home buying experience.

Following are Key Elements all Realtors and Homeowners Need to Know:

1. If the homebuyer is financing the property, these new regulatory guidelines will impact – and could even dictate – the closing date. Historically, homebuyers and sellers would agree on a closing date, and then service providers – including lenders – would work as best they could toward meeting that date. Going forward, purchase contracts can still be written with a specific closing date in mind, but all parties need to take into account that the earliest a home purchase transaction can close is 7 business days after the homebuyer is issued their initial mortgage disclosures from the lender.

2. The only fee that can be collected by the lender at application is the credit report fee.

The fee for appraisal cannot be collected until 3 days after initial Truth in Lending Disclosure (TIL) is received. Historically, upfront fees could be collected immediately at the time of application.

3. The homebuyer must be provided with a copy of his or her appraisal a minimum of 3 business days prior to closing. If the homebuyer believes the 3 business day required review period is not necessary for whatever reason, he or she has the right to waive that requirement.

4. An increase of more than .125% in the Annual Percentage Rate (APR) from the initial TIL requires the disclosure to be revised and reissued to the homebuyer. They must receive a revised TIL disclosure at least 7 business days before closing, providing the homebuyer with the time required to determine if they are comfortable with their loan choice. There are a number of things that can impact the homebuyer’s APR (included but not limited to Change in Loan Amount, Change in Closing Date, Change to Closing Costs, and Locking an Interest Rate).

“When Trusted Advice Counts”

Gary Bussard

10121 Paget Drive

St. Louis, MO 63132

314.993.6690 Office

314.283.0098 Mobile

gbussard@envoymtg.com

www.4StlLoans.com