My New Blog

There have recently been some very significant enhancements of Regulation Z (Truth in Lending) that went into effect on July 30th for all banks. 

Mortgage brokers and bankers are now stating that closing any financed real estate transactions inside of 30 days will be virtually impossible.  Realistically, all parties involved in a real estate transaction involving a mortgage should now expect the closing to be a minimum of 45 to 60 days.   It will take at least 30 days just for a loan approval, with bank-owned and short sales likely to take even longer.

This is very important when writing or signing any contract to purchase a property, if financing is involved.  Enough time must be allowed for the new processing procedures, and buyers must be aware of these new delays in taking ownership and plan accordingly.

Also, appraisals are now being done in the final processing of the mortgage, rather than at the beginning.  This eliminates a buyer from paying an expense before a formal approval has been given, if it is not possible to move forward in the loan transaction. 

Appraisals have been extremely conservative, with the need to consider short sale and bank owned sales prices as well as the traditional sales.  This has halted many "would-be buyers" as they simply cannot get financing for a home that is not priced properly for the market.  The alternative is to re-negotiate the sales price, with buyer and seller coming to a mutal agreement as to who would make up the difference. 

It is extremely important to follow all dates on a contract, from effective date to inspections and loan approvals.  This will determine whether or not a closing is "successful" or "stressful."

PLEASE NOTE:  I will not be writing my Blog for next week as I will be on vacation.   In the meantime, please visit my web site for any other updates and I will resume posting in two weeks.