Tag Archives: banks

BIG CHANGES AS OF OCTOBER 3, 2015

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A FEW THINGS YOU MUST KNOW BEFORE BUYING OR SELLING A HOME!

In an effort to empower and protect consumers when purchasing a home with a mortgage, the Dodd-Frank Wall Street Reform and Consumer Protection Act directed the Consumer Financial Protection Bureau (CFPB) to integrate mortgage loan disclosures.  What you must know is that on October 3, 2015 “TRID” was implemented.  TRID is an acronym for TILA/RESPA Integrated Disclosure.  (TILA – Truth in Lending Act, RESPA – Real Estate Settlement Procedures Act) Confused yet?  Let me explain briefly what this is, and what it means to you if you or someone you care about will be buying or selling a home in the near future.

TRID is being affectionately called “Know Before You Owe”.  The intent is have processes in place whereby lenders must disclose all fees and terms of loan within a certain time frame, and to give buyers an opportunity to shop the terms of the loan.  I recently attended a 3 hour CE class on this topic and the take away is that these new government regulations will significantly impact the way we have done business in the past.  Most notably, the typical timelines in a real estate contract, especially the closing and possession dates, will most certainly be impacted.  It would appear that the days of a 30 day closing are a thing of the past.  I have spoken with several top lenders and closing attorneys around town, and while most seem to have processes already in place to deal with these new regulations, no one really knows for certain what the impact will be.

One thing IS certain, is it absolutely imperative that if you are buying or selling a home that you partner with a real estate professional who is knowledgeable on this topic and who can refer you to the lenders, closing attorneys, and other partners in the real estate transaction who can guide you best.   The CFPB means business, and you do not want to engage in real estate contract until you have the facts on how you may be impacted, whether you are on the buying or selling side of the transaction.

For more information on TRIDhttp://www.consumerfinance.gov/know-before-you-owe

Dodd Frank

http://www.cftc.gov/idc/groups/public/@swaps/documents/file/hr4173_enrolledbill.pdf

Consumer Financial Protection Bureau

http://www.consumerfinance.gov/

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What about those foreclosures still on the books…

Windows of Opportunity Beginning to Close for Sellers

We have suggested that sellers who need to sell within the next 18 months had a ‘window of opportunity’ to sell at higher prices. They needed to put their houses up for sale immediately before a flood of distressed properties were introduced to the market. This window is beginning to close. The paperwork challenges faced by banks that caused a delay in the foreclosure process over the last ten months are starting to clear. It seems that these houses are now coming to the market.

RealtyTrac reported in their September Foreclosure Report:

“Default notices were filed for the first time on a  total of 78,880 U.S. properties in August, a nine-month high and a 33 percent  increase from July — the biggest month-over-month increase since August 2007.”

James Saccacio, chief executive officer of RealtyTrac explained:

“The big increase in new foreclosure actions may be a signal that lenders are starting to push through some of the foreclosures delayed by robo-signing and other documentation problems. It also foreshadows more bank repossessions in the coming months as these new foreclosures make their way through the process.”

Diana Olick, of CNBC’s Realty Check quoted a spokesperson for Bank of America:

“ Strong gains like that from July to August demonstrate our progress – primarily in judicial states — clearing more volume to advance to foreclosure once we pass the numerous quality controls we have in place and exhaust all options with homeowners.”

The impact will be felt from coast to coast. New Jersey Superior Court Judge Mary Jacobson recently cleared the way for the top banks to resume foreclosures in the state. The impact this will have on the number of distressed properties can be clearly seen in these statistics reported by Housing Wire:

“In October, New Jersey had the 24th highest foreclosure rate in the country, with servicers filing roughly 5,200 foreclosures that month, according to RealtyTrac. By July, the Garden State’s foreclosure rate dropped to 42nd with just 1,112 filings last month.”

ForeclosureRadar, which handles research in California, Oregon, Washington, Arizona and Nevada, last week reported:

“Foreclosure starts rose in every state.”

Bottom Line

If you currently are selling your home, price it to compel a buyer to purchase it now. Waiting will cause you to compete with an increased number of distressed properties which sell at dramatically discounted prices.

 

SOURCE: KCM Blog