Urban Living and Relocation Specialist Realtor - Phoenix, Scottsdale, Tempe Arizona - http://www.billgemmill.com/blog
HERA will effect your closing!
http://www.billgemmill.com/blog/articles/20/1/HERA-will-effect-your-closing/Page1.html
Bill Gemmill
REALTOR
Builder Marketing

 
By Bill Gemmill
Published on 07/31/2009
 
HERA, better known as the Housing and Economic Recovery Act was designed to ensure that buyers obtaining mortgages to purchase homes were given accurate diclosure information on their loan.  There are a couple of items in it that both buyers and sellers need to be aware of with this new legislation that could effect  your closing.

     HERA states that no fees other than those for running a credit report can be collected at the time of loan application.  Any additional fees can be collected after four business days.  HERA also mandates that any changes to the APR (annual percentage rate) of the loan by more than .125% (.250% for ARM's) must be disclosed to the buyer, and that they must have a minimum of three business days to review them before a transaction can close.  If the disclosure is not made in person, and it sent by mail, the amount of time increases to six business days before a transaction can close.  So here you are selling your home to a buyer, the buyer has not locked his loan rate yet and its 3 days to closing.  The buyer locks his rate .25 percent less than what was quoted to him (good deal for the buyer), the mortgage company must now "re-disclose" to the buyer since the APR of the loan changed by more than .125%, which will delay closing either by the 3 days (if given to buyer in person), or six business days (if given to buyer by mail).
     Items that can trigger re-disclosure requirements include a change in the loan amount, closing date, loan program, any fees that impact the APR or interest rate indicated on the original loan application.
     At this point, if I was representing a seller, I would have it in the contract that the buyer MUST lock his loan at least 2 weeks prior to close of escrow, if not that close of escrow date could very well be delayed.