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Showing posts from July 30, 2009

NEW FEDERAL "REGULATION Z" CHANGES START TODAY - and how at least one contract was saved from its clutches...

The rules of the game change today as new federal regulations governing "Good Faith" Estimates of closing costs ( GFEs ) and Truth in Lending Disclosures ( TILs ) go into effect. TIL statements disclose a loan's APR - a measure of the effective interest rate after taking certain closing costs into account. The days of quick mortgage-financed closings are gone. Period. End of Paragraph. Simply put, the fastest anyone is going to possibly be able to close is 7 business days after the lender delivers its GFE and TIL. That assumes everything goes flawlessly in the mortgage approval process. If there was a significant mis -statement of closing costs that results in a 1/4 % change in the APR before closing, new disclosures must be given and a new 3 business day waiting period must follow. These regulations are likely to wreck havoc with closing schedules for the foreseeable future - at least until mortgage lenders and title companies adopt new work flows. Preliminary GFEs an