On July 30, 2009, the new Housing and Economic Recovery Act (HERA) Mortgage Disclosure Improvement Act requirements will go into effect. Certain provisions of the Act require all mortgage lenders and mortgage brokers to help prevent deceptive lending practices and protect consumers by helping them become more informed. We're proud to say these goals align with the responsible lending practices for which Wells Fargo Home Mortgage - the nation's #1 residential mortgage lender* - has long been recognized.
Most of the changes will be transparent to the consumer and real estate agent. The new changes will impact settlement agents, so it is imperative that they have a strong understanding of the requirements of the Act and how they impact the closing process for consumers. Settlement agents will be required to do the following:
--Ensuring all fees impacting the APR are accurately communicated to the lender as soon as fees are identified. Any increase in the APR of more than .125% will require a re-disclosure of the Truth in Lending (TIL) and could delay closing. The re-disclosure requires the consumer be given an additional three (3)-business-day review period prior to closing, after receipt.
--Providing a preliminary settlement statement with accurate fees to the lender, allowing the lender sufficient time to issue a revised TIL disclosure (if necessary) seven (7) business days prior to the scheduled closing date.
--Scheduling signing/closing dates as accurately as possible in order to best estimate prepaid interest and avoid TIL re-disclosures.
