Some changes have taken place on the lending side that will affect your world and you really need to know them when writing contracts. These changes took place 7/30/09. It will affect how contracts are written and how transaction fees are disclosed.
New guidelines for dates:
Loan Application Deadline: 1 day only
Inspection Deadline: 3-4 days
Resolution Deadline: 4-5 days
Appraisal Deadline: 3 weeks minimum
Closing Deadline: 6 weeks
Ideal closing date: around the 20th of each month, NOT THE LAST DAY
Basically what this is going to do is slow down the entire real estate industry. Once the lender gives a good faith estimate, if the APR changes by 1/8 of a point by the closing, new disclosures have to be signed and the clock rolls back on the lending process, causing delays for your buyer.
A 30 day close is going to be next to impossible to pull off. A 45 day close is highly recommended and might be the only thing you can rely on. You need to give enough time for the appraisal process (2 solid weeks after your Inspection Resolution Deadline,) and you do not want to close at the end of the month, or even close to it if you can help it. If that 1/8 rule gets broken at all and the loan is delayed, you better allow yourself breathing room to close it that month. AND if the closing doesn't happen the last day of the month and has to leak into the next month, the APR will automatically change more than 1/8 of a point, and you are guaranteed a 1-2 week delay and a lot of heartache for all parties at that point.
Who is going to look bad in the deals? The lender. And consequently the buyer. And consequently YOU. But the lenders are getting pushed around by these new government rules and they can’t do anything about them.
Most fees to the buyer are going to have to be disclosed to the lender once you are under contract, because he will have to build that into the APR. Also, Title companies are going to have to get used to putting out estimated HUD's sooner than they ever have; anytime a buyer wants to lock in a rate it will be needed so the lender is aware of all of the fees and can disclose them up front.
So be advised that if you ignore these changes potential pain is coming for your contract!
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