Effective 10/1/15 news rules are in effect for buyers. The changes effect both the buyers and sellers. These are triggered by Dodd-Frank which was signed into law by President Obama after the loan crisis. It is good news for sellers, realtors and even the borrower.
The pre-qualification form is changing. This is a protection to make sure of transparency on lending terms and fees as well as it requires the buyer to make a commitment to proceed.
Requirements for sellers:
- You are required to provide a pre-qualification with any offer on a property. Of course there are some of you that during a short visit to town do not have this with you however most sellers won't look seriously at your offer if you have not even provided the preliminary authorization.
- Next it is your responsibility as a borrower to within 3 days of contract acceptance allow the lender to start the process which includes credit report, etc.
- The lender has now only 10 days to update the seller and you and on the status of the loan. This is called a loan status update.
- The closing disclosure must be signed by buyer 3 days before scheduled close of escrow. This drives the final loan documents.
Updates will flow however it is possible that a loan process will take a bit longer in order to accomodate the changes. Our contracts will change to adapt to these changes. In the business today the lenders do not always keep us Realtors updated. We have to call some of them, ask questions, etc. The new rules will put the law behind the process to help us know where a loan stands in the process.