Regulations mandate longer document review times starting Oct. 3
Could home sale closings get delayed in the coming months, even more than they are now? Bankers, real estate agents and title insurers think they might. They are worried that the new federally mandated mortgage and real estate disclosure procedures scheduled to take effect nationwide Oct. 3 will lengthen the typical time span from sales contract signing to settlement.
The new rules, which mandate longer document review times for buyers and impose an entirely new set of disclosures in place of the traditional Truth in Lending, Good Faith Estimates and HUD1 settlement forms, are likely to take awhile for mortgage and closing service providers to get accustomed to using.
Some industry experts warn that today’s 30-day to 40-day turnaround times could extend to 45 days or longer, depending on the number of complications that arise during the process.
But then again, complications in real estate transactions are nothing new. Talk to any experienced realty agent and ask about issues that lead to delays — or total derailments — and you’re likely to get an earful. The sobering fact is that even without the new closing rules coming in October, nearly two of every five of all home sale transactions don’t proceed to closing on time or as planned.
Most buyers and sellers are unaware of the statistical probabilities, but a surprisingly large percentage of sales involve problems that push closing times beyond what was originally agreed to by the sellers and buyers. About one out of 14 deals actually implodes after the sales contract signing— they don’t make it to or through the closing at all.
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