Mortgage Lenders Have New Disclosure Rules Coming
At the end of this month — July 30 — new disclosure rules will be applied to mortgage lenders. In recent years, mortgage loans have become more complex, and mortgage lenders and brokers have not always been forthcoming when it comes to disclosing the true costs of the loans. Many consumers made decisions they might not have necessarily made if they had more information concerning the true costs of their loans. (Although there are those who would still have made possibly inadvisable decisions, of course.)
The new mortgage loan disclosure rules are addressed by the Boston Herald:
The new Federal Reserve guidelines require lenders to disclose estimated mortgage costs within three business days of receiving your loan applications.
Required disclosures include Truth-in-Lending Act calculations (a breakdown of your mortgage’s monthly and overall costs), as well as an annual percentage rate (APR) for the loan.
Other disclosure requirements under the new rules include:
- Final numbers from Truth in Lending, plus appraisal value of your home, at least three days before closing.
- Seven day waiting period after disclosing total costs of the home mortgage loan.
- Disclosure if the APR changes on your home loan.
- Mortgage lenders can’t charge fees, other than a “reasonable” credit check fee, until you have had a chance to look at the disclosed costs.
While the new rules may lead to some mortgage loan closings being delayed, there are likely to be some positive consequences for consumers, reports the Boston Herald:
Second, the new rules will give consumers better estimates of key mortgage expenses - and more time to review these figures. Hopefully, this will lead to fewer cases of dishonest brokers and lenders sticking homeowners with questionable last-minute charges.
While there will always be less than honest mortgage brokers, and while some home loan officers will always try to push loans that are not good for the consumer, these new disclosure rules should curtail some of that sort of behavior. And, customers will have a better idea of what they are getting into before they sign the mortgage loan papers. Of course, the real question is this: Will borrowers really make better decisions now that they have more tools to do so?
July 22nd, 2009 at 5:49 pm
[…] Mortgage Lenders Have New Disclosure Rules Coming At the end of this month — July 30 — new disclosure rules will be applied to mortgage lenders. In recent years, mortgage loans have become more complex, and mortgage lenders and brokers have not always been forthcoming when it comes to disclosing the true costs of the loans. Many consumers made decisions they might […] […]