2009 is Over, and I am ready to bring in the new year!! It will be a great one, but it will be one of learning stretching and growing, Oh wait a minute, I thought that was last year!! Starting Jan 1, you better know all the new rules and guidelines for the lending industry. Are we ready?? I don’t think so. I talked to several lenders last week, who were just learning
about them and the dead line is here… WOW!! Buyers beware out there
Ask your lender, if they are ready and what some of the rules are. If they don’t know, RUN!! All offers written after tomorrow will fall under the new guidelines, so if you are under contract right now, you are ok, so don’t worry. These laws were put into place to protect you, and they will, the trouble is the learning curve that will take place it won’t be fun. The government is holding the lenders responsible for their good Faith Estimates they give us. They can only have a 10% or less, 0% on some items, margin of error. You will no longer get to closing and have the payment or interest rate different that what were promised. I know you know what I mean, it happened, more than I care to admit.
Your Settlement and Good Faith Estimate have to match each other.
Now, with that said, here are the hurtles we have to jump.. The lenders will no longer be willing to issue a Good Faith Estimate until we find the house and then NOT until you have an accepted offer. That’s a long time not ot have vital information such as, what is my payment, or what is my interest rate. So try asking for a Summary Statement, it will probably take the place of the Good Faith Estimate. I expect the good lenders to jump on the band wagon and figure that out. The second issue I see, is when we roll into the loan, the closing costs and the seller pays those costs associated with the buyers loan. Currently, the seller pays for the title insurance policy, which is basically "for the buyer" I guess, but now, because it helps the buyer it must be part of the "seller paid closing costs", so in reality the buyer will get less money to help because this fee is expensive and he might have to come to escrow with more money, and that can be a problem. There is only 3 to 6 percent allowable under the guidelines of these types of loans, so we’ll see.
Have I been clear as mud???? Now, do you understand the reluctance to embrace these new and challenging rules. If you want some light reading,
you can find the changes on the HUD web site and it only takes 62 pages to explain it……..Good luck and Happy New year!!
Avg. Sales Price: $220,000.00
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