New Rules Increase Closing Times

Now that the new TILA rules have gone into effect, all lenders are scurrying to determine how they are going to interpret this new bit of legislation. Suffice it to say, all lenders agree at one thing: Deals are now going to take longer to close. Most lenders are now reporting that they view the minimum time to close on a transaction to be 30 days, but tell us that the minimum they really think is going to be 45-60 days. The smallest change in a good faith estimate and how it affects the truth in lending statement can pootentially retrigger an additional disclosure time and further delay a deal. Some lenders are saying that the time starts after 7 days, while others say 10 days. When matched up with the conventional loan HVCC rules, delays are becoming commonplace.
Now more than ever before, an agent needs to be keenly aware of how these changes will affect the style of transactions they are doing. Those agents selling distressed or REO properties need to allow more time for there borrowers. The banks know these rules and are trying to use them to their advantage by still shortening closing times knowing full well that some of these dates cannot be met and will potentially cause additional fees to the borrower.
IMPORTANT - All lenders must follow these new guidelines. You need to be very wary of any loan officer touting a faster than 30 day closing on conventional transactions. Remember that after the signing around of a purchase and sale transaction, the clock starts ticking and it will be a minimum of 7 days before the appraisal is allowed to be ordered and with some lenders, it is 10 days. With HVCC taking up to 2 weeks to get the appraisal done, you can quickly see how 30 days comes and goes in that short time.
Protect your buyers! Learn how these new regulations affect your business model and make the necessary changes to work within the new rules. Use them to your advantage by informing and educating your buyers. You do not need an unhappy buyer that finds out about closing delays that you should have known about!
If you are interested in a meeting at your office, please call us. We have powerpoint and visual information about these new regulations and would be happy to share them with you.