“Here’s One for the Books” *…Changes to the Truth in Lending Act went into effect in July.  Lenders are now required to provide certain disclosures about real estate loan fees and helping borrowers make better and more informed choices about what loan they select. Although some experts in the industry feel the changes could create delays in the loan process.

Before the new law went into effect, lenders could begin underwriting the loan the same day they received an application by charging fees to borrowers, such as paying for property appraisers. The new regulations now mandate a three-day review period for the loan documents before the loan process can begin. If the interest rate changes or a loan is flipped to a new lender during the process, a new set of disclosure documents must be given to the borrowers, restarting the review period.

From loan application to funding the average loan, on a new purchase, is taking approximately 45 days (at least two weeks longer than last year). Delays in loan funding also can be costly to borrowers, as time on mortgage rate locks may run out.  Borrowers can lock in interest rates for as long as 60 days, and may extend the rate lock for up to three  weeks (down from four weeks a year ago).

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