This applies to primary and second homes only!
Initial Truth in Lending (TIL) Disclosure
The initial TIL disclosure has been amended to require specific language to notify the consumer that they are not required to complete the loan agreement merely because they have received the disclosure or signed a loan application.
For all timing requirements set forth below, “business days” are Monday through Saturday and exclude all legal federal holidays (Bank Holidays).
The revised rules implement waiting periods for the collection of fees and loan closings:
Creditors, mortgage brokers and any other person are prohibited from imposing any fee, other than a reasonable credit report fee, until the consumer has received my bank’s initial disclosures.
The loan cannot close (document signing) until 7 business days after the initial TIL disclosure has been mailed.
The loan cannot close until 3 business days after a re-disclosure TIL is received (if applicable).
If the disclosures are delivered via regular mail, the disclosures are considered received by the borrower three 3 business days after they are mailed.
Annual Percentage Rate Changes (APR)
If the APR increased by more than 0.125% from the previously disclosed APR, a re-disclosure TIL must be provided to the consumer. The loan cannot close (document signing) until 3 business days after the re-disclosure TIL is received by the borrower.
Our banks will not allow conventional appraisals to be ordered through our website until 3 days after we have disclosed. FHA and VA appraisals cannot be ordered by the broker until the 3 day delivery period has expired.
So What Do We Do?
It’s simple – we write longer contracts and tighter loan application. A longer Purchase and Sale contract means 35-40 day closings. Talk to your lender to discuss the file to see what hurdles he/she envisions, and worse case scenario, you close an extra 10 days late. However, it is important that your lender writes an air tight loan application to avoid the re-disclosure delay of 3 days due to a .125% increase in APR
I am happy to answer any questions you may have regarding these new guidelines. So please, do not hesitate to call me directly at (425) 350-7136.