What Will Delay a Closing After October 3rd?
The sky hasn’t fallen. The world still turns. Life has not come to a complete standstill since the October 3rd implementation of the Consumer Financial Protection Bureau’s new Closing Disclosure Forms.
So what will cause an official delay in closing? According to Consumer Financial Protection Bureau’s Fact Sheet:
- The APR (annual percentage rate) increases by more than 1/8 of a percent for fixed-rate loans or 1/4 of a percent for adjustable loans. A decrease in APR will not require a new 3-day review if it is based on changes to interest rate or other fees.
- A prepayment penalty is added, making it expensive to refinance or sell.
- The basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest-only payments.
About anything else that could delay a closing, will delay a closing even before October 3rd’s implementation of the Consumer Financial Protection Bureau’s new Closing Disclosure Forms. Life happens. When there is a mortgage involved in the Real Estate transaction, we are reliant on the mortgage lenders and/or banks to keep the transaction on target. However, there can be hiccups down the road. It is a matter of Realtors managing expectations and the situation if/when a delay in a closing does happen.
Consumers more than ever need Realtors that are aware of the contract milestones and are sure that the whole team is meeting the deadlines as specified in the contract. It is no longer acceptable for the Realtor to be absent throughout the course of the contract. It is a new era where the value added is in the Realtor’s ability to handle the contract, to keep the transaction viable, and to work with all parties involved.
Consumer Financial Protection Bureau:
One thing buying consumers should be aware of during this transition period with the Consumer Financial Protection Bureau’s new rules and regulations starting October 3rd, is that Lenders are not allowed to request the buyer’s W-2 Forms when they get your information for a Pre-Approval. The consumer (buyer) can offer them to the loan officer for review. I would highly recommend that you offer your W-2 information to a loan officer.
Well, you want to be a qualified buyer. The loan officers need your W-2s to verify employment, which will provide essential information concerning your financial make up. This is crucial because a buyer does not want a “pre-approval” to be nothing better than the paper it is written on. Knowing that you are secured in your offer makes you a stronger buyer. It is really what should be happening anyway when you talk to a loan professional. The new regulations that are being put in place on October 3rd however, really indicate that lenders should NOT request W-2 information from buyers up front until the loan has started.
Hopefully, as we go through the transition period, new rules and regulations will be looked at to allow some leeway for lenders to send out into the world of Real Estate transactions a solid buyer, but for now… Buyers, bring your W-2’s in when you talk to your loan officer for a pre-approval. Hand it over with a smile and tell them to use them with your permission. It will make the deal so much smoother, I promise.
Consumer Finance Protection Bureau Implementation
There are new forms coming out on October 3, 2105. How is it going to affect you, the consumer?
Consumer Finance Protection Bureau
Homebuyers find new loan forms easier to digest, but closings could take longer