Someone once said that the only constant in life is change. So it is in the world of real estate. On October 3rd of this year the Consumer Financial Protection Bureau, a federal agency established under the Dodd Frank Act, established new rules and regulations regarding real estate mortgages and closings. Known in the industry as TILA/RESPA or TRID, these changes were designed to protect buyers of homes from unscrupulous lender practices that were somewhat common during the early part of this century and to make certain that every buyer has the opportunity to fully know the terms and conditions of their mortgages. These rules will significantly affect the majority of mortgage loans originated in the United States. The greatest impact on consumers is that mortgages are going to take significantly longer to comply with the disclosure regulations and that a number of closings will be delayed at the last minute. This is due to the fact that almost any change in the loan terms will trigger a need to re disclose to buyers which can and will delay closings. The fines for mortgage companies and title companies who do not comply will be very large, so all of them will comply. The title closers are saying that it will be impossible to close a new loan in less than 6 weeks. Usually, a buyer of one home is selling another. The closing of the new home is dependent on the sale of the current one. So this means that one delayed closing will cause another one or maybe several in the line to be delayed. Consumers need to understand that there will be delays that are beyond anyone’s control. Another impact that it has already caused consumers increased costs of obtaining a new mortgage. Buyers may be better informed, but they will pay the price for the increased disclosure, absorbing the greatly increased expenses of complying with these regulations.
True real estate professionals have always adjusted to this kind of change, of which there have been many in my 32 years in the business. Those of us who really care about the consumer experience have always expended great time and effort to become knowledgeable in the market and the regulations from the various governmental agencies. The consumers, who may move on average once every 7 to 8 years, more than ever, need the help of full time, knowledgeable and competent agents, mortgage loan officers and title people. I have included on my website this month, a reproduction of a pamphlet describing how these change will affect you as a consumer. The pamphlet was written by Trademark Title, one of the Twin Cities’ leading Title Insurance companies, to help consumers understand. My website is Mnhomesbydave.com and you can find it under the Real Estate News tab. If you would like a copy of the entire pamphlet or would like to further understand the implications of this change, feel free to contact me. Thanks for reading.