Over the last 3 years new government regulations have had an impact on how I do business. The changes have been good and bad. Below are a few examples and the impact the changes have had on my business as well as how the changes have affected the real estate industry:
1) It takes longer to do everything. All the information on the loan application has to basically be 100% correct or a new application has to be done. The borrower’s name, social security number, address, as well as all the fees have to be accurate. Before, if there was a mistake we could just change it. Now, we might have to start over. I chalk this regulation up as positive. We should be accurate and not rush. Tip to the realtors. Take your time with the contract and be accurate. A mistake with the address or name could come back to haunt the transaction.
2) Appraisals. AIR stands for Appraiser Independence Requirements (was called HVCC). AIR makes it so the lender does not order the appraisal. The appraisal is ordered by an appraisal management company on a random selection basis. Therefore, there is no pressure from the lender for the appraiser to come up with an inflated value in order to make the transaction work. This is a positive. The appraisal should be accurate, not overblown. The downside is that some management company’s have below par appraisers on their list.
3) MDIA. This stands for Mortgage Disclosure Improvement Act. If your TIL (Truth In Lending) becomes more than .125% over the initial TIL the lender has to re-disclose. If this happens there is a 3 business day waiting period to close. The positive is that the customer should know before closing that their TIL has increased. The negative is the closing date might be missed. Even if the borrower wants to close they can not. They have to wait.