Big RESPA Changes – October 2015 – Part 4

Closing Changes Oct 2015 – Part 4

What can trigger delays?

***Anything involving a change to the loan itself

  1. a) switching from fixed to Arm
  2. b) change in APR (annual percentage rate) = to greater than 1/8 of a point – if it comes AFTER closing doc is generated

ISSUES

The new form highlights title insurance as optional (title insurance is one of the most important products for a buyer) – the form says nothing about recommending it

The new form is not state specific for title insurance either (ie who pays owner policy)

Why was it delayed?

Not all members of the American Bankers Assn have the new software in place designed for the new rule

20% of banks said in a survey – they do not want to offer mortgage products not yet supported by the software system

*****Simplification for those who want loans means more work for those who process them

REALISTICALLY – all the changes should make the mortgage process more transparent and understandable than it has ever been

A mortgage may be the most important financial decision most people make.  The new rules should help make this financial decision in an informed way.

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