New mortgage lending regulations start Oct. 3
TILA-RESPA — it's a term you might not yet be familiar with, but for anyone buying a home with a mortgage loan and every lender or escrow company involved â it's about to become the law of the land. Rick Piette, owner of Premier Mortgage Lending, is glad it's coming and wants consumers to know that it's a great change in lending rules that runs to their benefit.
"Commonly known as "Know Before You Owe," it refers to a portion of The Dodd-Frank Act that goes into effect on Oct. 3, 2015," Piette said. "It was designed to provide protections for consumers in mortgage loan disclosure documents that have never been available before. And it's going to give homebuyers solid information that will help them save money."
The act was created to eliminate the confusing maze of disclosure forms that consumers receive from mortgage lenders. These forms often vary from one lender to another and are written in 'legalese' terms that could be difficult to understand. Now, all these documents will be reduced to two forms that all lenders are required to use: the loan estimate and the closing disclosure.
"All the information that you really want to know about your loan will be highlighted and presented in an easy-to-understand format," Piette said. "For consumers, one of the most important benefits of these changes means that it will be easier for them to shop different lenders for costs, terms and conditions of their loan. The loan details will be clear and easy to see, and every lender's forms will be the same. It's going to give buyers the opportunity to really compare apples-to-apples. That's when they'll discover that not all mortgage loans are the same â especially when it comes to how much money comes out of their pocket."
That comparison is important, according to Piette, as it can literally mean a difference of thousands of dollars to a borrower.
"For example, Premier Mortgage Lending offers a no-fee mortgage, which means exactly what it says. So when buyers gather and compare fee worksheets from multiple lenders, they'll notice fees from other lenders that aren't found on a Premier loan. We don't charge anything for loan origination, underwriting, or document prep fees âand that's where homebuyers can save big."
Another important benefit will be that mortgage loans won't hold any surprises for a consumer, as the closing disclosure form must be provided to buyers at least seven business days before the loan closing.
"In the past, buyers would usually receive all their closing documents at the last minute â right at the escrow signing, which is when everyone is anxious to get the house keys and make plans to move in," Piette said. "That meant there were times that buyers would sign a set of documents without realizing some important terms of their mortgage loan had changed in a way they did not clearly understand. So the Seven-day-rule is going to give buyers the breathing room they need to make sure they're getting the loan they are expecting."
The new regulations will be put in place by the Consumer Financial Protection Bureau (cfpb.gov).
"We've been very supportive of all the new legislation the CFPB has put into effect," Piette said. "In fact, that's why we created our KnowBeforeYouOweNevada.com website. In addition to promoting the steps the CFPB is taking to ensure homebuyers are getting a fair deal on their mortgage loans, we've gone a step further on the side of consumers.
"On our site, we feature a series of short videos that help explain some of the differences between mortgage loans. We call it Home Loans 101. It's designed to make it easy to learn how to compare loans, know which questions to ask, and help you make the best financial decision for your specific homebuying situation. At Premier, we don't just talk about transparency; it's how we do business every day."
Premier Mortgage Lending, NMLS No. 393282, is at 701 N Green Valley Parkway No. 125 Henderson. The full-service lender is a member of the Las Vegas and Boulder City chambers of commerce, Better Business Bureau and Southern Nevada Home Builders Association, as well as an affiliate member of the Greater Las Vegas Association of Realtors.
