New requirements for Good Faith Estimate disclosures might cause some problems

Here is information about a new requirement that is part of the MDIA. (Mortgage Disclosure Improvement Act) I received this information from the CAR (California Association of Realtors)

So think about this one... you have a transaction in escrow, everything is coming together. You are about 30 to 45 days into this. Contingencies are removed. The Buyer is scheduled to sign loan docs at 3:30pm this after noon. The moving van is in the Sellers driveway. COE is just a couple days away. Sign, fund, close.

Retail interst rates drop an eighth with the lender at noon. Now what?

Ok, ok. I don't know the answer. I tried the link below but no luck. I guess the site is flooded with Realtors checking it out. But what if you have to re-draw the Good Faith Estimate and wait 3 days or no funds? What happens if the answer is yes? Can the Buyer waive the 3 day wait period? What about the Seller?

Ok, ok. You wait the 3 days, docs are drawn, Buyer is scheduled to sign... It happens again... or worse... the rate goes back up. Does the process start all over again?

Maybe I'm getting worked up over what might happen. I know that's never a good thing. But how do you explain to the Seller that it will only be a couple more days in the hotel?

Check out this information and let me know what you think about it. Better yet tell me your wildest dream worst case scenario. I'll put it in a future blog.

New disclosure rules could affect close of escrow:

Starting July 30, if the APR on an initial Good Faith Estimate is no longer accurate (within a 0.125 percent range) at close of escrow, a lender must generally provide a residential borrower with a new disclosure and a three-day right to rescind before consummating the loan.
REALTORS® are forewarned that, because of this new three-day waiting period, a lender's failure to timely provide corrected disclosures has the potential of delaying funding of the loan and close of escrow.

This new requirement is part of the Mortgage Disclosure Improvement Act (MDIA) implementing new loan procedures to protect borrowers and foster greater transparency in mortgage lending.

For more information on the MDIA, including its applicability, details of the three-day waiting period, and other requirements, go to

http://www.car.org/legal/other-legal-features/realegal-chart/2009-realegals/realegal-7-17-09/?redirectFrom=login.