Mortgage Planning Tips

Effective July 30th 2009, there were mandatory changes implemented with regard to disclosing the Truth and Lending and the Regulation Z. These new disclosure requirements affect all transactions in the mortgage industry including both Brokers and Bankers.

Here are the two main changes that Real Estate Agents need to be aware:

1.    Initial TIL now required on all purchases and refinances of primary residences and second homes. The loan cannot close (i.e. document signing) until seven (7) business days after the initial TIL disclosure has been mailed.

2.    An increase in APR by more than .125% requires re-disclosure of the TIL at least 3 business days before closing. If mailed, the TIL is considered “received” 3 business days after mailing. The loan cannot close until three (3) business days after re-disclosure TIL is received (when applicable). This means that if the APR is off by more that .125% the closing will be delayed by up to 6 business days!

Personally, I always make sure that our numbers are very accurate so this won't change much for our team unless a 3rd party charge to APR comes up last minute. But loan officers who haven't been disclosing accurately all along can create a real problem for both listing and selling agents.

This re-disclosure will just punish the borrowers, sellers and agents because there will be a minimum 3 day delay for the borrower prior to closing. Sellers may be unable to extend if they are going to buy another house and have a simultaneous closing.

The SOLUTION to work with a professional you trust and one that has and will continue to disclose all fees truthfully instead of trying to “polish” up the good faith estimate to look cheaper initially. For listing agents it will become critically important to get correct title fees if the seller picks the title company. For selling agents that pick the title company, getting correct fees to the buyer’s lender is equally important.

By Todd Baker. Todd Baker is a resident of Prosper, Texas and a Certified Mortgage Planner. To comment or for additional information please send an e-mail to tbaker@imortgageplanner.net or call 972-890-9155.