Effective July 30, 2009 new Federal regulations will effect financed home sale closing dates in four ways:
7 Business Day Requirement – the earliest any financed home purchase transaction can close is now 7 business days after the homebuyer is issued the “initial mortgage disclosures” from the lender. Note: At wells Fargo Home Mortgage, Saturdays (with the exception of federal holidays) do count as a business day for purposes of disclosure only.
Upfront Fees – Historically upfront fees were collected immediately. Now, upfront fees (except for a credit report fee) cannot be collected by the lender until the initial disclosures are received by the buyer.
Appraisals – The homebuyer must be provided with a copy of their appraisal a minimum of 3 business days prior to closing.
Changes in APR – An increase of more than .125% in the Annual Percentage Rate (APR) from the initial Truth in Lending (TIL) Disclosure trips a requirement for at least 3 business days before closing.
Buyers and Sellers, their lenders, escrow officers and agents need to plan accordingly and cannot simply insist on firm Purchase Contract dates without taking into account these factors. This means that last minute negotiations related to closing dates may become for frequent.
Rick Bonetti | Alain Pinel Realtors | 408-857-8800 | DRE#01237009
