November Alpha Mortgage Recap

Happy

Happy Holidays from your team at Alpha Mortgage! Tis’ the season to enjoy time with family in your beautiful new home! We are proud to serve the Wilmington, Charlotte, Jacksonville, Winston-Salem, Greensboro, Fayetteville and Asheville areas with the most competitive mortgage and lending services at the lowest rates. As we go into December, we invite you to check out the latest in real estate and mortgage news. And don’t forget – whether you’re on Santa’s nice or naughty list, we can make getting your dream home a reality!

November Housing Facts:

  • Most expensive place to live in America: Newport Beach, California.
  • Least expensive place to live in America: Cleveland, Ohio.
  • Google is now registered as a licensed mortgage broker. Though the company won’t be financing mortgages, it will aggregate quotes from local and national lenders it has partnered with, in order to help users find the best mortgage. It is important to recognize that the company will be paid by the mortgage lenders it has partnered with, so the “best rate” may not be just that. More to come once the model goes live.
  • Home prices increased, growing 0.1% for the month and 5.5% on a year-over-year basis from one year ago, according to the September house price index from Black Knight Financial Services.
  • President Obama signed a bill that caps the salaries of Fannie Mae CEO Timothy Mayopoulos and Freddie Mac CEO Donald Layton. According to the White House, President Obama signed the Equity in Government Compensation Act of 2015 on Wednesday. A statement from the White House states that the President signed S. 2036, the “Equity in Government Compensation Act of 2015,” which “suspends compensation packages approved for 2015 for the chief executive officers of (Fannie Mae) and (Freddie Mac) and any of their affiliates, and reinstates the compensation and benefits previously in effect.”

“Know Before You Owe” – The Impacts of TRID on the HomeBuying Process

In our last blog , we described how The “Know before you Owe” mortgage initiative will promote the transparency of information associated with mortgage and lending procedures – thus helping borrowers better understand and prepare for their home financing decisions. TRID also referred to as the “TILA-RESPA” rule  (an acronym formed by combining the Truth in Lending Act or “TILA” and the Real Estate Settlement Procedures Act or “Respa”) aims to simplify the disclosure and loan-closing process for consumers and better prepare buyers for their mortgage transaction.

We’ve compiled a review of how TRID Impacts lenders and borrowers below – Enjoy!

1. New Loan Disclosure Forms & Closing Disclosure Forms

Lenders must now provide borrowers with new disclosure forms that explain the loan estimate and loan closing process in more detail. This new Loan Disclosure form combines the Good Faith Estimate Form and the Truth in Lending Disclosure form have been combined into a new, simpler Loan Estimate form.

TRID also mandates that mortgage firms can not charge credit report check fees until the borrower has received the loan estimate form and has indicated intent to proceed with said firm. These new regulations should make it easier for consumers to shop for and understand the interest rates associated with different loan packages from different firms. 

TRID also gives rise to a new Closing Disclosure form that combines the final Truth-In-Lending statement and the HUD-1 settlement statement while providing details on the entire real estate transaction – including loan term, fees, and closing service costs.  

The accuracy and delivery of the new forms will be critical to ensuring the mortgage process is not derailed or delayed, and that borrowers have a smooth home purchase process.

2. Lenders must now provide Borrowers with the Loan Estimate & Closing Disclosure Forms in 3 Days

Three business days after the consumer provides a lender with their name, income, Social Security number, property address, property value estimate and mortgage loan amount sought, the send that consumer his/her Loan Estimate & Closing Disclosure Forms.

3. Longer Approval & Closing Times

In order to comply with the regulations imposed by TRID, lenders will be extra careful while both evaluating clients & filling out necessary paperwork – thus translating to longer approval & closing times and pretty much eliminating the the possibility of closing ahead of schedule.

 

Unfortunately, this extended loan closing timeline resulting from TRID will impact the home buyer’s move-in logistics and timeframe. Nevertheless, the increased transparency regulations will undoubtedly help more home buyers understand their loan options.