Keep Your Business Healthy
One month into TRID and we are still here, maybe not joyful, but still here. Title companies and Lenders are grappling with their own interpretation of the Consumer Financial Protection Bureau’s murky TRID guidelines. Loans are closing, borrowers are moving into their new homes. In the meantime, lender fees are increasing to compensate for the additional overhead for compliance auditors.
Consider the following guideline and how it could delay your closing:
The day before close of escrow, you and your clients arrive at the final walk-through. The seller “forgot” to fix the dishwasher and replace the bedroom window. This is after you have shown your clients 20 houses in 110 degree heat, worked through the BINSER, a low appraisal, and a non-responsive listing agent. Your buyers really want this house, but not with a broken window. Therefore, out of the kindness of your heart, you agree to give them $500.00 of your commission towards closing costs. WARNING: Before you put on your red tights and play hero, consider the following:
• An addendum is required, reflecting the $500.00 and must be fully executed by both buyers and sellers, outlining the agent consideration from commission towards closing costs. No need to mention why—for instance—in lieu of repairs.
• The addendum will be forwarded to the lender who in turn will send it to the appraiser. The appraisal is required to amend the appraisal to reflect the $500.00 concession.
• Once the appraisal is completed, it will need to be reviewed again by the underwriter to ensure the additional $500.00 meets underwriting guidelines.
• Once the appraisal is approved by the underwriter, it will be sent to the borrower for approval.
You probably have caught on by now that this will mean a delay. It could also mean additional delays for the Closing Document (CD) depending on the interpretation from the lender.
Famous Quote: The road to closing late is paved with good intentions and any CFPB mandates.
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