Got gripes about the loan closing process? The Consumer Financial Protection Bureau (CFPB) wants to hear what kind of problems you experience at closing, including:
- what aspects of closing are confusing or most helpful to homebuyers;
- what stages are most memorable to homebuyers;
- how long it takes to close and how long you feel it ought to take;
- how prepared homebuyers are for the closing process;
- what are some common closing errors;
- what common surprises turn up at closing;
- what type of advice do homebuyers seek during closing and who do they turn to;
- what are the most important questions homebuyers ask during closing; and
- what are the most important steps homebuyers take during closing?
In a recent first tuesday poll, 72% of respondents cited the lender as the main cause of problems turning up at closing.
Along these lines, comments received by the CFPB thus far have claimed lenders commonly:
- provide loan documents with very little time left before the end of the escrow period, leaving homebuyers with little time to review the documents prior to signing; and
- fail to review potential title conditions until just before closing, causing delays in the closing process.
Other common last-minute lender hang-ups come from sources like a change in the homebuyer’s credit score, employment or available funds to close.
The best way to ward off potential surprises is to educate your homebuyer. Give them a list of dos and don’ts, such as:
- Do let your employer know you’re applying for a mortgage. Every lender does a verification of employment prior to funding, and the employment information (salary, continued employment prospects, hours) represented on the mortgage application has to match what your employer says.
- Don’t take on any new debt or make any large purchases after applying for your mortgage until you’ve closed, which has potential to adversely affect your credit score.
- Do keep track of any large deposits or withdrawals from bank accounts, to confirm closing funds are present and sourced.
- Do review the good faith estimate (GFE) and question the lender about fees up-front, before closing.
- Do review loan docs at signing. Don’t let the lender’s rush cause you to sign blindly.
- Do review the preliminary title report with your agent as soon as practicable. The lender’s not the only one who’s able to catch inconsistencies!
- Don’t expect to be able to pull a fast one on a lender. Title companies also check a homebuyer’s history to reveal tax liens, child support or other obligations which do not appear on a credit report.
Want to be a part of making the closing process better for your clients? You have until February 7, 2014 to weigh in. Responses can be submitted at the Federal Register.