I keep hearing with the "new laws" it takes longer to prepare a HUD statement and get a closing date after the loan has been underwritten. Can anyone tell me what the process is now?
The Mortgage Disclosure Improvement Act requires that 7 day elapses from the time the initial disclosures are sent until the loan can be closed. Unless you were trying to slam a loan through underwriting, this wouldn't be an issue. It also requires that if there is a change in the APR within 1/8th percent, you must be redisclosed and wait 3 days after redisclosure in order to close on the loan. There was also a "Final Rule" that the Department of HUD issued which requires the new GFE (commonly referred to as "GFE 2010") to be used. The new GFE requires that all costs on the transaction be disclosed to the buyer, even transfer tax/stamps and owners policy (which are both commonly paid by the seller in most states). That process usually requires the loan officer contacting the title company to get a pinpoint estimate of the costs, as there are some costs that cannot change at all from the GFE until closing, there are some costs that have a 10% tolerance, and then there are some costs with have no tolerance requirement. One fellow in our office forgot to disclose the sellers portion of the Florida mortgage tax on an initial GFE, which is a zero tolerance item (on the Final HUD-1 at closing it can be less, but not more), had to refund the borrower those costs even though the seller ended up paying for them. HUD calls that an "unexpected windfall".