Heads Up! A new lending law coming in October is going to stop you from closing your loan fast as you might like. Currently, some lenders (not the big banks) are closing purchase loans in three weeks. At my office, we closed a loan in 14 business days, because the seller’s circumstances demanded a rush.
But the Consumer Finance Protection Bureau (CFPB), the watchdog committee set up by the White House, has decided that folks getting a mortgage need more time to think about their financing. Even though, per current law, borrowers must have received the Good Faith Estimate, Truth-in-Lending, Lock Confirmation, Notice of Settlement Service Providers, and other documents that come to approximately 100 pages of disclosures at least three days after making an application… and even though they have several weeks while the loan is processing to discuss their financing with their loan officer… and even though they have the legal right to review the Settlement Statement for 24 hours before signing… even though… the CFPB has determined that is not enough time for people to think about their financing.
A new 3-day delay period in which borrowers can think some more about their financing is being instated with the new law called TRID (which, interestingly, is DIRT backwards).
That is a mouthful, and it is so convoluted that banks and lenders have had their attorneys trying to decipher it for the past year. To help explain it to regular folks, the CFPB has written a shorter “plain language” version that is ONLY 91 pages. You can download it here.
If you don’t feel like reading it all, just know that the days of quick and easy loan closings are fast coming to an end. Most closing agents, escrow and title companies, attorneys, and lenders are suggesting that if you’re buying a home after TRID comes in October, you allow 45 days to close (60 days if your financing is with a big bank).
The public has a right to comment on this upcoming law until July 7, so act fast!
Real estate agents, this is your opportunity to make your voice heard!
Here is the link.