Important changes are occurring in the lending process.  These intent of these changes is to better protect home buyers, by providing specific timelines for lender actions and disclosures.  However, a home buyer does need to know that loan changes during escrow may have an impact on the closing date.

From the National Association of Realtors web site:

Revised Truth in Lending Disclosure Requirements Take Effect on July 30, 2009

Lenders will be subject to new disclosure requirements for mortgage loans under the Federal Reserve Board Truth in Lending Regulation (Reg Z). The new requirements apply to loan applications filed on or after July 30, 2009. The new rules are complex and compliance will be a challenge for lenders. REALTORS® will want to learn the basics so they can advise clients of potential delays and the new procedures.

Here are key highlights of the changes:

• The new requirements apply to all mortgages secured by a borrower’s home, including primary and second homes and refinancings. Investor loans continue to be exempt.
• Lenders must give good faith estimates of mortgage loan costs within 3 business days after the consumer applies for a loan (early disclosure). The lender may not collect any fees before the disclosure is provided, except for a reasonable fee for obtaining a credit report.
• The closing may not take place until expiration of a 7-day waiting period after the consumer receives the early disclosure.
• If the annual percentage rate (APR) increases by more than 0.125 percent, the lender must provide a corrected disclosure to the borrower and wait an additional 3 business days before closing the loan. The APR includes not only the interest rate on the loan but certain other costs related to settlement, so it will be important for any fees that affect the APR to be as accurate as possible, as early as possible, to minimize the need for a corrected TILA disclosure.
• The consumer may modify or waive both waiting periods for a documented personal financial, but must receive the disclosures no later than the time of the modification or waiver.

Wells Fargo Mortgage has been very proactive in getting this information out.  I received a packet in the mail, plus an invitation for training.  They also have the following six page document that you can review.  It’s written for Realtors, but so many home buyers are educating themselves on the home buying process, I think it’s good info to share.  You will see what documentation and review times you are provided by the new law.

Well Fargo Mortgage Truth in Lending – How the new government regulations may impact your closing dates

Related Posts:

• Getting Pre Approved Makes More Sense Than Ever
• More from the Boring Stuff files, or why your 30-day escrow isn’t
• HERA, HVCC, and Other Fun Acronyms- Ready for New Lending Rules?

Read more about what his Local Anaylsis newsletter starts out with this week:

Phoenix is the most unique market in the country right now. Any renter with a stable job and the desire to become a homeowner and live in Phoenix for a long time should be buying a home right now because affordability has never been better (our analysis goes back to 1981).

However, the problem is that few have a stable job. Phoenix has lost a whopping 86,800 jobs in the last 12 months, which is 4.5% of its employment base, and every major sector of the economy has lost jobs except Education and Health Services.

The article goes on to compare the cost differences in renting vs. owning, showing a $700/month swing since 2006.  He also indicates the low-down government backed loans may not be around forever.

Read the full article “Owning is Less Expensive Than Renting in Phoenix” .

I asked if she’d be following the interest rate forecasts, and let her know that inventories (homes for sale) are starting to level off. In some Scottsdale zip codes, median list prices are starting to increase.

Some other reading that I recommended included the Time magazine article “Ignore the Headlines“.

And also, the article from Tuesday’s Arizona Republic, “After months of declines, existing-home sales up”

My perspective is that we won’t know that we hit the bottom of this market, until it’s past.

The writer responded back asking for more information on the areas where listing prices have been increasing, and I’ll share that Scottsdale update with you tomorrow.

Two other related posts on our current real estate market:

• Buyers Just Want to Know – Should I Buy or Rent?
• The Bright Side of (Slowly) Falling Home Prices

In Scottsdale, property taxes are less than what the calculator defaults to, so I suggest changing the percentage to .5% to be closer to our rates.

(Thanks to Vicki Moore over at AgentGenius for sharing the link to helpful tool.)