Are You Ready For New Closing Procedures In October?

[Russell Brazil]

If you are an agent, title attorney or lender you are probably aware of the new closing situation that is due to take effect in October, but if you are not one of those maybe you are not aware.  

Come October "closings" will become "consummations." Could they have picked a worse word? Any issued that arise, particularly monetary issues that could increase the APR by an 1/8th of a point will automatically delay closings by three days. All numbers need to be finalized three days before closings. Now this sounds like a good idea, and while it will not affect most transactions.....we have all been there when we do a final walk through the night before closing and something is amiss. Will we make these final things an issue, or will we let them go now that closing will be delayed an addition three business days? Will we be doing final walk throughs three days in advance now? Will we have to do two of them, one three days in advance and one the night before?

Also instead of the title/closing attorney finalizing the "consummation statement" (The HUD-1 will disappear) all changes will be going through the lender. Previously if you were sitting there at closing, there was a problem on the HUD-1, the title attorney would just be able to go in the next room, hop on a computer, fix it and print out a new one. Now if there is a problem a phone call is going to need to be placed to the lender to fix it. While I do not think this will be as big of an issue on the east coast...what happens if you have a late in the day closing on the west coast, and the lender is based on the east coast and there office is already closed? How will this affect those lenders who are not entirely on top of their paper work game?

I think the majority of transactions will be fine, but those transactions where there are those last minute issues I think are going to be magnified by the new process.