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46

© Ticor Title Company

WILL THE NEW CFPB RULE DELAY MY CLOSING?

For mortgage applications submitted on or after October 3, 2015, lenders must give you new,

easier-to-use disclosures about your loan three business days before closing. This gives you

time to review the terms of the deal before you get to the closing table.

Many things can change in the days leading up to closing. Most changes will not require your

lender to give you three more business days to review the new terms before closing. The new

rule allows for ordinary changes that do not alter the basic terms of the deal.

1.

The APR (annual percentage rate) increases by more

than 1/8 of a percent for fixed-rate loans or 1/4 of a

percent for adjustable loans*. A decrease in APR will not

require a new 3-day review if it is based on changes to

interest rate or other fees.

2.

A prepayment penalty is added, making it expensive to

refinance or sell.

3.

The basic loan product changes, such as a switch from

fixed rate to adjustable interest rate or to a loan with

interest-only payments.

* Lenders have been required to provide a 3-day review for

these changes in APR since 2009.

There has been much misinformation and mistaken

commentary around this point. Any other changes in the

days leading up to closing do not require a new 3-day

review, although the lender will still have to provide

an updated disclosure. For instance, the following

circumstances do not require a new 3-day review:

Unexpected discoveries on a walk-through such as a

broken refrigerator or a missing stove, even if they

require seller credits to the buyer.

Most changes to payments made at closing, including

the amount of the real estate commission, taxes and

utilities proration, and the amount paid into escrow.

Typos found at the closing table.

Only

THREE

changes require a new 3–day review:

Source: consumerfinance.gov

NO OTHER changes

require a new 3–day review:

According to the Consumer Financial Protection Bureau,

the answer is

NO

for just about everybody.