Closing Times Move Out a Bit February 1, 2010

During a recent meeting with the head of our closing department we were informed to expect a minimum turn time of 72 hours from when the file gets to the closing department to when the borrower can sit down with the attorney. The reason for this is as follows:

The new GFE is a binding contract with our clients and must disclose the lender charges, attorney charges and secondary provider charges such as surveys and pest inspections. One big issue is that some of the RESPA rules are gray and open to interpretation (especially rules regarding secondary provider charges) - however the rules regarding resolution of undisclosed items are not. The lender must refund any non-disclosed fees to the borrower unless the borrower selects their own service suppliers; therefore lenders are being extremely cautious.

Attorneys have limited experience closing using the new HUD and comparing GFE fees to the one disclosed. There are major concerns regarding this as well. Many are also experiencing software issues that are just now being discovered. Our closing department states it is training many of the paralegals on how to fill out the new HUD (more delays).

Finally, RESPA requires that the customer have 24 hours to review the HUD before settlement.

All of this adds up the 72 hours, 24 hours for our closing department, 24 hours for the attorney to prepare the HUD and 24 hours for the client's to review their settlement statement.

The good news is that Deanna and I have had multiple closings with the new GFE and HUD. The new HUD looks like the old HUD - the major difference are the additional pages and the comparison of quoted GFE fees to the actual fees charged at closing.

Bottom line: the new rules do protect the customer from unscrupulous lenders that changed fees and surprised our client's at the closing table. However, these changes have had an unintended consequence of delaying the closing process. I am being informed that many of the larger institutions are quoting closing in 45-60 days.

The Valeo-Croy Team and Cunningham and Company are committed to help you close your loans faster. Issues that are mandated do slow the process, HVCC, MDIA and now new RESPA laws will limit our very fastest closings times to 3 weeks with excellent borrowers and 4-6 weeks for any transaction with additional requirements (Bond, USDA, House Charlotte). We will continue to focus on keeping our closing times faster than the big banks so we can get your client's into their homes faster. We fully expect that closing times will get faster as we all gain further experience with the new GFE and HUD.

The Valeo-Croy Team -  (704) 366-7711

Todd Croy - NMLO license #91428

Deanna Valeo - NMLO license #91421

Accessible | Program Expertise | On-Time Closings

@ The Valeo-Croy Team, we are here for you.

The Valeo-Croy Team and Cunningham and Company Mortgage Bankers are Equal Housing Lenders.

 

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