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Ken Baltes

Loan disclosures

Monday, July 22, 2013 - Article by: Ken Baltes - FBC Mortgage - Message

Here is a topic that I rarely see discussed: Loan disclosure requirements and same day closings.

Mortgage loans in the last few years have undergone major government scrutiny. With the passage of Dodd Frank Financial Reform Act, the government changed the way loans are disclosed to borrowers.

1) All applicants must be provided an initial disclosure package within 3 business days of receiving a loan application.

2) Closing canoccur if at least 7 businessdays passafter delivery of disclosure documents if disclosures are unsigned and 3 business days have to pass if disclosures are signed by the borrower.

One note is that some banks/mortgage companies inturpret the rules differently and may have slightly different dates.

This is something to understand when selling your existing home and purchasing another. Before Dodd Frank it was feasible to expect a same day closing. Now it is unwise.

I am a firm believer in being prepared and would recommend that your realtors' on both the sale and purchase talk to each other. It is one thing to have your financing all set up and clear to close but what about the person buying your home? Have they done everything in a timely manner?

If there is one mis-step the whole deal can become delayed and cause everyone heartache. This is especially tough if there are utilities and movers scheduled.

Avoid that stress and make sure you have a contingency plan and don't set the dominoes up to fall. Perhaps the person buying your home doesn't have one to sell.You can close with them and lease back the home for a week while closing on the one you are buying. This way if something unexpected happens, it won't start a chain reaction free fall. Plan for the worst and expect the best.

Ken Baltes

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