WASHINGTON – Oct. 19, 2015 – It has barely been a couple of weeks since a nationwide changeover in mortgage and settlement procedures went into effect, but lenders and brokers are already charging that just about everything is taking longer and that homebuyers' costs are increasing.
As of Oct. 3, lenders, title insurers and settlement agents had to comply with an almost 1,900-page new rulebook. The change was designed to improve transparency and accuracy in real estate and mortgage transactions to help both buyers and refinancers.
Most mortgage experts view the new disclosures as an improvement over the ones they replaced, but worry remains that the reformed process would draw out the typical time span between loan application and closing.
However, what has received less focus are the impacts of longer timelines on how much consumers pay to close the deal – increases that are just starting to become more evident.
According to Mortgage Bankers Association Chief Economist Michael Fratantoni, the expenses added by the new settlement rules are in addition to a long series of federal regulatory changes in the last few years that have hiked the cost of originating a typical home loan from $4,500 to $7,000.
"A lot of it is personnel, quality control, spending on new technology" and reprogramming systems, says Fratantoni.
As lenders and settlement agents gain more experience in managing deadlines under the new rules, Fratantoni and others hope that 30-day closings will become more common again.
Source: Daily Herald (10/16/15) Harney, Ken
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