Buyers/Borrowers are affected because they must receive notice of loan costs within 3 days of application for loan and they must be in the new required format. If there are any changes during the loan approval process, the Buyers/Borrowers must be newly apprised of the loan costs which must be in the new required format. Depending on the changes and acceptability to the Buyers/Borrowers, a new 3 day waiting period starts. During this period, several things may occur including but not limited to the escrow not closing on time per the contract or the Buyers/Borrowers could refuse the loan if it does not fit in with the parameters set forth in the contract. Having said this, these two things are how Sellers are affected also. If escrow does not close on time, many things can be affected: Payoff can be late resulting in an additional charge, insurance policies might expire, acquisition of a replacement property may be delayed, etc.; and obviously everything stops with a cancellation.
These are the changes would trigger a new 3-day waiting period. They are:
- A change which renders the APR inaccurate;
- A loan product change causing the disclosed information to become inaccurate; or
- The addition of a prepayment penalty to the loan.
So this sounds horrible right? Understand that it is unlikely that you might find yourself in of these situations but it could happen. The best thing in your arsenal is to select not an experienced agent but an experienced Realtor to stay on top of developments in a contractual period to ensure a smooth closing.