Pittsburgh's Best Homes Blog


Changes Are Coming To The Settlement Process

If you are a buyer that is planning to purchase this summer or a seller that will be closing on a home after August 1st you should be aware that new government regulations will be making changes to the closing process that may effect when you finally close on the home.

The largest changes will be related to the final accounting of costs at closing. When a buyer applies for a loan they will now be given a Loan Estimate detailing all their costs to purchase. They must get this within 3 days of making a loan application, and if there are any of a number of changes during the mortgage process it must be resubmitted to the buyer. The buyer must have 3 days to look this over before any of the next steps towards closing can be taken.

Then no less than 3 business days before closing the lender must issue a Closing Disclosure. This takes the place of the doument formally known as a HUD-1 Settlement Statement, and it looks pretty similar. The important point is that the buyer must have it no less than 3 days prior to closing and it can no change substaintially from the loan estimate they were given.

This may sound complicated, but here is the thing that buyers and sellers need to know, right now it is common practice for the HUD-1 Settlement Statement to show up just a day or even an hour before closing. The new rules mean that if the lender doesn't get the Closing Disclosure to the buyer 3 business days before closing there will not be a closing! It doesn't matter if the truck is packed, the lease is expiring, the kids have to start the first day of school... there will not be a closing. It means that if the closing disclosure shows up on Thursday,  the first day to close will be Monday (remember this is business days, Sundays and Holidays don't count).

While it is good that both buyer and seller have more time to know what their costs and charges are, there will no longer be the last minute, slide in sideways closing that unfortunately seem all too common as last minute appraisal, walkthrough and lender items are checked off the list.

If you apply August 1st your loan will apply under the new rules. And the new rules mean even bigger changes for the banks, lenders and settlement companies that will go unseen to buyers and sellers.

How do you avoid these problems and delayed closings? Ask your agent. Truth is that while we may not say it loudly, we do know what lenders close smoothly and on-time, we know what settlement companies do and don't have their act together and we do secretly sigh when our buyer's come up with pre-approval letters from lenders that we know don't have it together, and settlement companies that aren't getting ready. Lenders and settlement companies that were just squeaking by under the current rules are going to cause big delays on closings if they aren't ready for what is coming August 1st.

Buying or Selling a home in Pittsburgh? Call Christa Ross from RE/MAX Select Realty, at 724-933-6300 x214 (office) or 724-309-1758 (direct) or visit my website at www.bestpittsburghhomes.com.

facebook icon twitter icon linkedin icon

Comment balloon 0 commentsChrista Ross • May 27 2015 11:06AM
Changes Are Coming To The Settlement Process
If you are a buyer that is planning to purchase this summer or a seller that will be closing on a home after August 1st you should be aware that new government regulations will be making changes to the closing process that may effect when you… more
4th & 5th Grade Ski and Ride Program
Before you know it snow will be falling. Do you know any 4th or 5th grade students that want to do some sliding this winter? Send them to the Pennsylvania Ski Areas Association website. The Snowpass booklet offers skiing and boarding at 21 PA… more
Interview with ReEnergize Pgh Coaliltion Member, Christa Ross
As a Realtor specializing in green and energy efficient homes I work with a group called ReEnergize Pittsburgh that is working to reduce residential energy waste throughout Allegheny County, help create jobs, and improve air quality. One of the… more
2 Ways To Sell A House
A tale of two sellers… Seller #1 Priced their home so that it was obviously the best home available at the price in their market, helped by the fact that inventory was low. Day one they had 10 showings and two offers… more
New RE/MAX Select Office in Shadyside Opening October 18, 2012
Coming soon to Shadyside… Our new RE/MAX Select Realty office. On October 18th we will be throwing open the doors to our city office, which will also be where I will be hanging my hat from now on. I am not sure if I am more excited about having a… more
Great News About The Pittsburgh Real Estate Market
If you haven't heard the news then let me be the first to tell you that Pittsburgh is "IN". That is according to the Washington Post's 2012 in and out list And in Austin they even named us as one of America's next hipster cities That… more
Good News From The Pittsburgh Market
These days it seems like every time you turn on the news you get the “sky is falling” perspective on the economy and the real estate market. I’m happy to say that hasn’t been my experience this summer. Sales have been strong and some of our… more
Cleaning for a Reason - Help for women fighting Cancer - Pass this on…
This information got sent to me by a friend and I wanted to pass it on… Fighting cancer is difficult enough, but living with it is even tougher - and that's where the Cleaning for A Reason Foundation steps in. This nonprofit offers free… more
Pittsburgh is one of America's lowest-risk housing markets
Oh, the benefits of being boring! Actually that's not really true, Pittsburgh is a very exciting city but when it comes to housing we are stable, low risk, maybe even downright dull. And while Kennywood (our local amusement park for you out-of… more
Happy Holidays to my friends, customers and future clients!
Wishing everyone a great holiday and a happy new year! A little video I whipped up and sent out as a video e-card! Buying or Selling a home in the Pittsburgh area? Call Christa Ross from RE/MAX Select Realty, at 724-933-6300… more