This industry is constantly in flux. Regulation changes from the Government or Lenders are never far away. Keeping on top of these changes can be a daunting task, making it tricky to determine what will pertain to you and your clients.
Appraisals: As of 2014 (old to some, new to others) there is a new policy in place that allows borrowers a fair chance to review their appraisal before closing. Unfortunately, this can also cause quite a headache. Here’s how it works and what to plan for.
How it works: The borrower (homeowner or homebuyer) is required to have 3 business days to review their appraisal before closing on the loan. To account for mailing time, Lenders require 6 business days (3 for mailing and 3 for review). You cannot close on your loan until this takes place.
Complications: Each of the Lenders we work with have determined this to be based on the final appraisal, so if the appraiser needs to correct a typo or a new construction needs a completion certificate, the wait time will START when the Bank receives this appraisal. For Home Purchases, this can cause a delay in closing.
Shorten the wait time: Borrowers can sign a form waiving their rights to the 3 day review period. This will cut the wait time in half as lenders still require the 3 day time to mail.
Bottom line: In most cases, this will not be an issue as long as your Lender has been given enough time to complete the loan and the order for the appraisal is placed immediately.
That being said, there will be times when this will be an issue, most often with new construction and the need for a completion certificate. Knowing this is a potential hurdle beforehand and communicating that to everyone involved in the transaction is a great way to help ease stress for all parties involved and allow everyone to plan for the worst while expecting the best.
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