ANCHORAGE REAL ESTATE NEWS
The lending industry has been going throug drastic changes in the last few months. The changes are intended to help buyers and consumers. A new regulation, HERA, which is an amendment to the Truth in Lending Act (implemented through Regulation Z), will be effective July 30, 2009.
In 2008 the Housing and Economic Recovery Act (HERA) and the Home Ownership and equity Protection Act (HOEPA) were passed by Congress. The Federal Reserve Board published the Acts under the Truth in Lending Act. These Acts were intended to provide transparency and fair regulation of the real estate industry. This was accomplished by adding additional steps to help in the prevention of deceptive lending practices and to protect buyers by making them more informed. Additionally, Fannie Mae and Freddie Mac adopted the Home Valuation Code of Conduct (HVCC) in 2008 to reinforce appraiser independence, valuation protection, and to enhance the integrity of the valuation process.
Key Points to keep in Mind:
1. If a homebuyer is financing the property, these new regulatory guidelines could impact the closing date. The earliest a purchase transaction can close is seven business days after the homebuyer is issued his/her initial mortgage disclosures from the lender.
2. Upfront fees, except for the credit report fee, cannot be collected by the lender. Fees can be collected by the lender after the intial disclosures are received.
3. Homebuyer must be provided with a copy of the appraiser report three business days prior to closing.
4. Anc increase of more than .125% in the Annual Percentage Rate from the initial Truth in Lending Disclosure requires the Truth in Lending Disclosure to be revised and reissued to the homebuyer. The homebuyer must receive the new and revised Truth in Lending Disclosure at least three business days before closing.
Tips for Buyers
-In the initial disclosure packet you receive the impacts of the new regulations are outlined. Make sure to ask your lender any questions you may have.
-Keep in mind that these new regulations are put in place to keep you, the buyer, informed and it gives you time to consider the loan choices and the confidence in moving forward.
-Understand that a change in mortgage product can impact your APR (annual percentage rate) and therefore your estimated closing date.
Search for Homes on the Alaska MLS
Request a Free Relocation Packet
First Time Home Buyer Tax Credit
Sources: Wells Fargo Mortgage Co.
