Marcie Geffner - Bankrate
The federal government's latest loan disclosure rules should give borrowers some welcome relief from upfront loan fees that lock them into a specific lender and costs that unexpectedly escalate at closing. But these same rules also could cause some loan closings to be delayed.
The improved disclosures should benefit borrowers who are offered a subprime or other nonstandard loan or are worried about being hit with costs that suddenly escalate at closing, according to Marx Sterbcow, managing attorney at Sterbcow Law Group, a real estate law practice in New Orleans.
"It's a good law for loans that were Alt-A or subprime or had prepayment penalties and also for prime loans where some knucklehead would (estimate) a 1 percent origination fee only (for the borrower) to find out at the last minute that the loan origination fee is 3 percent. It will cut down on some of that," he says.
Read on: http://www.bankrate.com/finance/mortgages/will-new-rules-delay-home-loan-closings-1.aspx