Aug 3, 2009

Be Prepared - 45 Day and 60 Day Escrows

Hello Neighbors,

As we continue to recover from these crazy times, the Feds are creating new legislation at an alarming rate. These new rules are rolling out a bit too quickly - and without a thorough analysis of the impact to the consumer.

Don't get me wrong - the goals are important, and the steps needed. We simply need to know how to manage in these new environments.

One immediate impact, probably 45 day purchase escrows. 60 days are even on the horizon.

These changes impact purchase loans AND re-finance loans.


The two most important changes were rolled out on May 1st and early in July.

The first is called the "HVCC" or Home Valuation Code of Conduct. It dictates how people in these industries work with Appraisers. In short, we can't talk to them!

The second is a change to the Truth-In-Lending laws. These laws force new disclosures to borrowers if there is a change of 1/8th of a point in APR. ...and a 3 day "hold" period for the analysis of that new disclosure.

What does this last item mean?

Let's say interest rates change between your lock and your close of escrow. NOTE THAT THEY ALWAYS WILL since rates are based on the daily US bond markets!! You could end up reviewing and reviewing changes and changes for days.

More review, more 3 day wait periods = longer escrows. Please plan accordingly!

- NeighborlyJim

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