Big changes to the federal home closing process could affect loc - WMBFNews.com, Myrtle Beach/Florence SC, Weather

Big changes to the federal home closing process could affect local homebuyers

The new federal laws scheduled to go into effect on August 1, 2015 are designed to give home buyers a clearer and concise understanding about the terms of their home loans and the estimated cost, well before the buyer signs the dotted line. The new federal laws scheduled to go into effect on August 1, 2015 are designed to give home buyers a clearer and concise understanding about the terms of their home loans and the estimated cost, well before the buyer signs the dotted line.
Some mortgage lenders, brokers and real estate agents, like Hans Neugebauer, with Remax Southern Shores Realty, are concerned about the initial problems that could come with the new changes. Some mortgage lenders, brokers and real estate agents, like Hans Neugebauer, with Remax Southern Shores Realty, are concerned about the initial problems that could come with the new changes.
MYRTLE BEACH, SC (WMBF) - Buying a home can be overwhelming and stressful, but this year, new changes to the process could add to that.

The new federal laws scheduled to go into effect on August 1, 2015 are designed to give home buyers a clearer and concise understanding about the terms of their home loans and the estimated cost, well before the buyer signs the dotted line.

On November 20, 2013, the Consumer Financial Protection Bureau (CFPB) issued its final rule to integrate RESPA and TILA disclosures and regulations. The final rule integrates existing disclosures with new requirements from the Dodd-Frank Act to improve consumer understanding of the mortgage process, aid in comparison shopping and help to prevent surprises at the closing table.

Some mortgage lenders, brokers and real estate agents, like Hans Neugebauer, with Remax Southern Shores Realty, are concerned about the initial problems that could come with the new changes.

"I would suggest this year that they [the homebuyer] have plan 'B' because we have lenders that are going to have to meet very strict guidelines and at the very end of the process they're going to have to produce the closing disclosure three days prior to closing for the buyer to have a chance to review that," Neugebauer said.

Highlights of the new rule include:
. A new loan estimate document which replaces the Good Faith Estimate and the initial Truth in Lending disclosure.
. A new closing disclosure document which replaces and combines the HUD-1 and final Truth in Lending disclosures.
. Loan Estimates must now be given to consumers within 3 business days of applying for the loan.
. Types of loans covered include most closed-end consumer mortgage loans. The rule does not apply to Home equity lines of credit, reverse mortgages, mortgages secured by mobile homes or by dwellings not attached to the property and creditors who make five or fewer mortgage loans in one year.

"It's to make those disclosures easier to read and to get them in the hands of the consumer in a more timely fashion. So I think that's a good thing," said Neugebauer. "A lot of times I know that I am going to a closing and the numbers are changing at the last minute and it can be stressful if the parties haven't had a chance to digest all those numbers on a settlement."

Neugebauer suggest those who intend to buy or sell real estate after July should contact their law firm as soon as possible to discuss how the new federal laws, closing procedures and documents could potentially cause closing delays.

"Make sure they are in good hands, they are working with highly competent professionals, closing attorneys,  lenders, folks that are knowledgeable and have been educated on these new changes," Neugebauer said.

Some Myrtle Beach mortgage companies and real estate companies have already starting training classes to prepare for the August changes. They tell WMBF News the idea is to learn as much as they can to avoid any delays, and they will understand the process to pass along the information to the consumer.

Neugebauer said it is important that realtors and consumers understand these new procedures so that there are no surprises at the closing table.


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