Could any major mortgage rules cause a delay in closing

Guest contributor of this post is Tricia Rieth, Senior Mortgage Consultant at Baird & Warner

New Loan Disclosure Rules may cause delays…as of July 30, 2009 any changes in closing costs that cause the APR (the actual cost of borrowing) to change by .125% from the initial Good Faith Estimate, the lender must re-disclose to the borrower at least 3 business days before closing.  During that 3 day period the borrower has the right of recission.  The lender may not close the loan during this 3 day period.  This 3 day period can only be waived if there is a bona-fide personal financial emergency which needs to be in writing by the client.  Note:  Be sure to help avoid delays by closely reviewing your Good Faith Estimate and Truth in Lending Disclosures when you receive them.

Another BIGGIE is the Fannie Mae Loan Quality Initiative (LQI). The LQI is to promote improved loan data delivery that is complete, accurate and fully reflective of the terms of the mortgage.  It is also to help ensure that the loan meets the credit and eligibility standards, pricing guidelines, and so on. A key point to remember: Fannie Mae wants lenders to verify that borrowers have not taken on new debt during the processing of the mortgage.  If new debts are found, the mortgage is subject to a new underwriting review and a possible turndown.

To avoid home purchase delays and to learn more contact Tricia Rieth (cell: 847-312-4202 or email: tricia.rieth@bairdwarner.com)

Tags: Buying a home, Chicago suburbs, Financing, Home buying time frames, Northwest suburbs, Real Estate