New Regulations Could Delay The Closing Of Your Home Purchase!

On October 3rd some new regulations with regard to home mortgages and loan closings will go into effect that have the mortgage and real estate industry in a little bit of a panic. As a result of passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act there is a major overhaul to the lending industry in the works. 
Included in the new regulations are:
  • Changes to the forms used to disclose loan terms and settlement charges to you. Four confusing and complicated forms have been replace with two longer, complicated but slightly less confusing forms.
  • There are time lines in place as to when certain disclosures have to be made to you by the lender including minimum amounts of time that must lapse between different disclosures and steps along the way.

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How Will Implementation of Dodd-Frank Affect The Real Estate Market?

In case you are concerned that the real estate industry is not subject to enough regulation, do not let your heart be troubled as new regulations imposed by the Dodd–Frank Wall Street Reform and Consumer Protection Act, which was signed into law back in 2010, affecting home mortgages go into effect October 3, 2015.   There has been much talk in the industry about the changes, which are fairly wide-sweeping including changes in the timing of, and type of required disclosures to the borrower as well as a brand new combination loan disclosure form and closing statement.  Below, is an overview of some highlights of the changes that I think will most affect St Louis home buyers and sellers as well as links to several additional resources as well.

The New TRID

Presently, a home buyer, at closing, receives a Truth In Lending Disclosure as well as a HUD-1 closing statement.  The former provides the details of the loan including interest rate, APR, costs associated with the loan as well as other details to comply with the Truth in Lending Act (TILA) CFPB Guide (TILA) and the latter provides a summary of the home purchase transaction such as purchase price, credits or charges to the buyer as well as other details required by the Real Estate Settlement Procedures Act (RESPA).

Beginning October 3, 2015, the two forms above will be combined into one, consumer-friendly, TRID (TILA-RESPA Integrated Disclosure) form.  The new TRID will present all the important financial details of the loan and home purchase into one form which will be much easier for the typical consumer to benefit form than the current forms.

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