Thursday, May 14, 2015
Changes to RESPA
The Real Estate Settlement Practices Act, which governs residential mortgage closings, will mandate several changes in closing procedures, beginning in August. For one thing, we need longer periods until closing--probably 45 days to get a mortgage, and another 15 to close. Currant rate locks will not last long enough to finish the transactions. Every change will require three days for clients to look at the documents, so each mistake or missing name will push off a closing. This will result in no more back-to-back closings--you won't be able to sell your old house and buy your new home on the same day. There will be more due diligence, and it will need to be done sooner. All of this will result in a need for an attorney to be involved earlier, and fees will probably go up as a result.
For real estate agents, we have to do a really good job in managing the expectations of clients. They may not have anywhere to live between the two closings. They won't be able to delay the production of forms and facts, and everything will need to be settled sooner. What's my take away advice? Buy and sell now, and avoid the whole issue!