Are you looking to get a loan?

New federal rules give consumers more time to review the key points of a home loan.

Are you applying for a loan to purchase a primary or secondary home? Are you planning to refinance?

If you answered “Yes”. You’d better take a few minutes to read the new set of federal consumer-protection rules that will take effect July 30, 2009

What is new? As per the new Federal Reserve guidelines lenders have to provide you initial disclosures of your mortgage costs within three business days of your loan application.

Can your lender collect fees in advance? Lenders are prohibited from collecting any fees — except a reasonable charge for checking your credit — until you’ve been given the loan-cost disclosures. This means no more out-of-pocket upfront application charges until you’ve received the truth-in-lending disclosures and an annual percentage rate (APR)calculation of those loan costs.

Can you have a fast closing? No. There is a  a seven-day waiting period after applicants are handed their early disclosures or the disclosures are mailed prior to closing. You’ll now have up to a week to think about the transaction, and decide whether it’s right for you. Final truth-in-lending disclosures are due three business days before closing.

Are you entitled to a ocpy of the real estate appraisal? Yes.  The new Fed rules require lenders to deliver a copy of the real estate appraisal to you three business days before the scheduled closing on the loan.

Your receipt of the appraisal in advance will determine the timing for the closing unless you waive three-day rule  if you don’t think receiving the appraisal is necessary.

Any changes in relation to the APR? If the APR on the early truth-in-lending disclosure increases by more than one-eighth of a percentage point (0.125), the lender will now be required provide you a corrected version and allow you an additional seven business days to consider the transaction before settlement.

How is this translated into the actual closing? The actual closing dates will be more closely tied to lenders’ and settlement agents’ accurate estimates and their ability to deliver disclosures and appraisals by the required dates. For example, if appraisers are backlogged and can’t produce valuation reports quickly enough, settlements will have to be postponed.

How will this help you? If you are a buyer, you will have  more control and less chances of being slammed  with hundreds of dollars of charges you’d never expected. If you are a seller, do not count your money until all deadlines have been met. Hopefully this will work.

What will happen if mortgage companies and banks do not meet the timing deadlines or if the appraisals are not received? We will start seeing an escalating number of litigation and lawsuits  seeking cancellation of mortgage deals.

Are you looking to buy in the next few months? Contact me and I will assist you.

Adriana Faerman, Real Estate Broker | REO Specialist | 305-773-0253 | adrianafaerman@gmail.com