New Federal Loan Rules Might Mean Late Closings
New Federal Reserve regulations to protect consumers are due to go into effect on July 30th. Soon, lenders will be required to provide borrowers with an estimate of their mortgage costs within three working days of the loan application. In addition, the only upfront cost that may be collected prior to this disclosure is an appraisal fee that is not excessive. If rates increase by more than an eighth of a percentage point, the lender must prepare and deliver a new estimate within three business days.
A further change to lender procedure is that the borrower must be given a copy of the appraisal at least three business days before closing. If this does not happen, it could delay the close unless the borrower waives receipt of the appraisal.
For more details, see “New Federal Rules Protecting Applicants for Home Loans Take Effect July 30th.”