How are home closings going nearly two months after the new federal real estate disclosure rules took effect? Are they being knocked off schedule and taking much longer from date of sale to final settlement, as some mortgage industry executives predicted?
It depends on who you ask. Kristy Ryan, an agent with RE/MAX Fine Properties in Scottsdale, Ariz., tells of a recent closing on one of her transactions — a $1.3 million home with a million dollar mortgage. It got delayed when the buyers complained that the settlement form they received called for significantly higher mortgage fees than the lender had projected weeks earlier. That’s a glaring no-no under the federal rules, and buyers have the right to demand conformity between the two. In this case, it meant that the lender had to lower its charges and reschedule the closing.
In San Jose, Calif., mortgage broker Russ Glines of Century Oak Financial Group says the transition to the new rules, which aim to enhance accuracy and transparency for buyers and sellers, has been rocky. “Everything’s getting delayed,” he told me, because “communication between lenders and (closing) agents has been haphazard at best” and key service providers have different approaches to filling out the forms and getting estimates right. As a broker, Glines works with multiple lenders and has to follow each of their often-conflicting interpretations of the rules. Some delays are pushing appraisers’ schedules back and adding days to the process. Fully 90 percent of Glines’ recent transactions “have gone long,” he said, meaning they failed to close on the originally scheduled date. That’s disruptive and potentially costly for buyers and sellers who have moving vans packed and ready to go. Plus they’re also a pain for realty agents and everyone else involved in the sale.
But check elsewhere and you hear the new rules haven’t been troublesome. In Washington D.C., Rod Rochowiak, president of Better Homes and Gardens Real Estate Premier, says “we have not had any delays — it’s been great” so far. The key, he says, is realty agents who are trained to keep on top of lenders, document flows and timing throughout the process. That way, they catch potential problems and disruptions and get them fixed before they knock deals off schedule.
