Real Estate News About Woodbridge Virginia and Surrounding Communities: New Government-Mandated Rules Could Make For a Bumpy Ride to the Closing Table

The following article was sent to me by mortgage banker, Markita Aldridge-Woods of Weststar Mortgage.  When I need accurate, up-to-the-minute information about the mortgage world, I go to Markita's Blog.

New Government-Mandated Rules Could Make For a Bumpy Ride to the Closing Tab

Scariest Words Known To Man: "I'm from the federal government and I'm here to help you."

Expect Delays When You Attempt A 3-Week Settlement

The mortgage world is controlled by at least 8 different government agencies (and I wouldn’t be surprised if the CIA was one of them). There are more rules than one can say "grace" over these days - so here is a list of obstacles that could cause your deals to close "late" and close "ugly".

HVCC - Home Valuation Code of Conduct:

- Lenders prohibited from speaking with appraisers about value - However real estate agents can talk with the appraiser & provide additional comps.
- Appraisal must be delivered to borrower - who has 3 days to review it.
- Loan cannot close until the 3-day waiting period has lapsed - no last-minute closings.

MDIA - Mortgage Disclosure Improvement Act:

- If anything changes during the processing of the loan (loan term, rate, down payment, closing costs, etc) and it affects the APR (annual percentage rate on the Truth In Lending statement) by a variance of 1/8%, another disclosure must be sent to the consumer.
- Business days are NOW defined as Monday thru Saturday, excluding all Federal Holidays (even if the mortgage company or bank is closed on Saturday).
- Application Date - Borrower has 7 business days to review all disclosures -cannot close until 7 days have elapsed.
- If re-disclosure (see above), borrower has another 3-days to review.

RESPA - Real Estate Settlement Procedures Act:

- Good faith estimate (GFE) forms have been standardized and all lenders must use the same form - making it easier for borrowers to compare lenders.
- Must provide GFE to borrower 3 days after loan application.
New HUD Closing Costs Booklet changed to include information about working with real estate agents.
- Closing cost estimates may be quoted HIGHER because RESPA does not allow costs to exceed original estimates unless there are "Changed Circumstances".
- Changed Circumstances (really tricky) require additional waiting periods. 

LQI – Lender Quality Control Standards:

- Loan files are audited a couple days BEFORE closing to insure that the borrower is still employed, no new debts, credit score is still the same.
- Can request tax transcripts from the IRS prior to closing.
- Stricter requirements for self-employed borrowers.

HPML  - Higher Priced Mortgage Loans:

- Lenders must now check a "government calculator" to determine if interest rate EXCEEDS an APR amount set by the government.
- When rate is locked, lender must check "calculator" and if rate exceeds norm, additional underwriting requirements may be required.

Expect Delays - But now you know why!

Also, check Erick's blog daily for news about real estate in Prince William County, Woodbridge, Manassas, Bristow, Haymarket, and Gainesville.

703-590-2252 or contact me now by email Click Here 

 

Erick Blackwelder or Peggy James of Erick and Company - Exit 1st Choice Realty, Woodbridge VA. Realtors®, call 703-590-2252 begin_of_the_skype_highlighting              703-590-2252      end_of_the_skype_highlighting  list your property for sale or to  purchase a property in Lake Ridge, Westridge, Old Bridge Estates, River Falls, Middle County, Cannon Bluff, Meadowbrook Woods, Blooms Crossing, Manassas Park, Beaver Creek, Hunter's Ridge, Brittany,  Manassas, Montclair, Dumfries, Occoquan, Dale City, Nokesville, or anywhere in Prince William County.

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