Page 14 - John Hundley 2015

New Schedule

Because of the new rule, closings will be on a new schedule, which easily can cause unwanted
delays if all parties are not prepared. The lender will be required to provide the Closing Disclosure at least
three business days prior to consummation in order to allow the home buyer time to carefully evaluate all
the costs associated with the loan. If the Closing Disclosure is mailed to the home buyer, an additional
three business days must be added. This mandatory waiting period allows time for agents to help answer
any questions their clients may have before consummation.
Because of this strict three-day waiting period, real estate brokers should closely monitor the closing
process to prevent any unwelcome delays. To ensure a smooth closing, all parties should strive to
complete all the necessary paperwork a week prior to the actual closing date. Although a common
occurrence now, last-minute changes are not permitted by the new rule. Any changes, whether
induced by the lender or the home buyer, could mean that the lender must send a new disclosure, thus
starting the mandatory waiting period all over again.
To avoid this unnecessary delay, real estate agents should consider conducting a preliminary walk-
through at least one week before consummation to find any issues with the new home that would require
the lender to issue a new disclosure. This way, any findings or discoveries can be addressed prior to the
lender sending out the Closing Disclosure.

Agents also should note that consummation does not necessarily mean closing; consummation
occurs when the consumer becomes contractually obligated to the creditor on the
loan, which is not necessarily when title changes hands.
One issue that can trip up parties involved in a mortgage transaction is the
definition of “days.” For the Loan Estimate, a business day is defined as “a day on
which the creditor’s offices are open to the public for carrying on substantially all of
its business functions.” For all other purposes, including the Closing Disclosure, a
business day is defined as all calendar days except Sundays and legal holidays.
Realtor Role Important

The role of the real estate agent will be important under the new rule. Often, by the time the buyer
approaches the lender or the closing agent, the buyer already has expectations as to
when they can move into the new home. These expectations may be compounded by
commitments made for the selling of an existing home. Only a candid and early
disclosure by the real estate agent can avoid these situations from developing. This
disclosure will be especially important when purchase of a new home is contingent on
sale of an existing residence.

With the advent of these new changes, real estate agents should focus on building
relationships between all parties involved in the mortgage transaction to ensure all regulatory deadlines
are met. Agents can serve as intermediaries by supporting timely communication and coordination
between parties. Managing the communication between all parties will help real estate agents make the
process as smooth and stress-free as possible for their customers.

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SHARP-HUNDLEY, P.C.

1115 Harrison, P.O. Box 906, Mt. Vernon, IL 62864 • Telephone 618-242-0200 • Facsimile 618-242-1170
www.sharp-hundley.com

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