How new government regulations can impact your closing
Notes: If the application is taken in person (instead of through a phone application as used in the example), then the closing may occur earlier because the initial disclosures are issued and the upfront fees can be collected at application. considered a business day only for of disclosures unless they are a Saturdays are the purposes federal holiday. How new regulations enhance your ability to gather information The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE), a part of HERA, may not affect your timing but does affect your experience. SAFE is intended to provide uniform licensing standards for loan originators and encourage states to participate in a comprehensive licensing database of all loan originators called the Nationwide Mortgage Licensing System and Registry (NMLSR). The NMLSR was created to be a resource and tool for borrowers with the following goals: Help ensure that loan originators be required to “act in the best interests of the consumer” Give consumers easy access to a loan originator’s history and any disciplinary/enforcement actions taken against the originator Call for uniform education and licensing requirements Accountability and tracking of loan originators To enable these goals to be reached, as part of the NMLSR, all loan originators will be assigned a unique identifier. This will permanently identify a loan originator in the system and enable easier public access to the employment history and any enforcement actions taken against any originators. Also aiming to provide consumers with more information and to make it easier to look for better deals is the Real Estate Settlement Procedures Act (RESPA). Originally created in 1974 to make comparison shopping for settlement services easier for consumers, RESPA was Sources: Housing and Economic Recovery Act, Home Valuation Code of Conduct, Truth in Lending Act – Regulation Z and Real Estate Settlement Procedures Act.
mainly intended to eliminate the ability of unscrupulous agencies, lenders, lawyers, etc. to provide kickbacks and referral fees to other parties involved in the transaction. This was done to keep consumers’ costs from being driven up by this dishonest behavior. In 2008 changes were made to RESPA that greatly affect the way information is provided to the homebuyer by their lender and their title company. Under RESPA, lenders must now provide their borrowers with a Good Faith Estimate (GFE) that includes a summary of the key terms of the loan as well as a summary of the total settlement charges and loan origination charges. The rule requires that the GFE settlement charges remain available for 10 business days to allow the borrower to comparison shop with other loan originators. RESPA creates tolerance levels of change for costs laid out in the GFE so that no consumer will have to pay a wildly different amount for their actual closing costs than those detailed in the Good Faith Estimate. Finally, RESPA prohibits home sellers from requiring homebuyers to purchase title insurance from a particular company, either directly or indirectly as a condition of sale in order to maintain the freedom of choice for homebuyers when deciding upon a title company. Contact us for more information on how these regulations may impact your closing and why we’re the right company for you.
Aegis Land Title Group
www.agltg.com
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