New Home Loan Rules Will Take Effect on July 30, 2009
From wisebread:
“If you are in the process of buying a new primary residence or second home, or considering refinancing a loan, a new set of federal consumer protection rules taking effect on July 30th, 2009 may affect you. These rules are a part of the Mortgage Disclosure Improvement Act of 2008, and they are designed to give consumers more disclosure of the cost of a loan and also more time to make a decision. The final rules from the Federal Reserve were modified recently and here is a quick summary.
Early disclosures are required within three business days – Good faith estimates of mortgage loan costs must be given to a consumer within three business days of a consumer’s loan application. Also, no fees may be collected besides a reasonable credit check fee. This means that the good faith estimate needs to be given before the lender collects an application or appraisal fee. In the past it was common for lenders to collect hundreds of dollars in fees before providing any cost estimates.
Creditors must wait seven business days to close a loan after early disclosures – This gives the consumer at least seven days to decide whether to close or not upon receiving the initial estimate. Currently it is common for disclosures to be provided less than 24 hours before closing.”
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