That initial disclosure window can be extended in a few ways:

• Lenders who can count neither Saturday nor Sunday (because they do not have any operations running on Saturday and thus cannot count it as a business day would have a 9 calendar day window and only be able to close on the 10th day.
• Banking holidays such as Memorial Day or Veterans Day can extend that window.
• The window starts with the day that the disclosures are delivered; some lenders allow online “same-day” delivery of the disclosures, but others require delivery via postal mail, which by law adds an extra three days to the window (to allow for time for the dislcosures to arrive via mail).

MDIA also requires a re-disclosure if the loan terms change significantly after the initial disclosure (which often happens, it should be noted, when a borrower locks in their rate). After that redisclosure, another 3-business-day window starts; the potential delays caused by weekends, banking holidays, and/or postal delivery above also apply, meaning a rate lock could, in the worst case, add another 9 days of delay (the 3 days for the redisclosure, another 3 days for postal mail delivery, two days for weekends, and one day for a banking holiday if the window overlaps with one).

Note that the initial MDIA disclosure can be made as soon as the pre-approval process starts, and it is one important reason that buyers should get preapproved before they put in an offer on a property; that window can effectively be ignored if the disclosures are made early enough in the process. For borrowers who do not have the initial MDIA disclosure taken care of during a preapproval, we strongly recommend allowing for at least 3 weeks for underwriting of the mortgage including processing of the MDIA disclosures, even if underwriting turnaround times at the lender might in theory allow for a faster closing.

The redisclosure after a lock or other significant change in loan terms can’t be done in advance, on the other hand, so for that reason, we strongly recommend that borrowers lock in their interest rates at least 9 days before their scheduled closing date.

HVCC

The Home Valuation Code of Conduct (HVCC) is technically a regulation, rather than a law, and it currently only affects conventional mortgages–government loans such as FHA, VA, or USDA mortgages are not affected. HVCC requires that certain processes be followed during the ordering of the appraisal, including not allowing the lender to choose the appraiser who performs the appraisal; as a result, lenders in time-sensitive situations can’t choose appraisers who have a track record of being able to perform appraisals quickly, and instead must go through appraisal management companies (AMCs), which currently take on average 2-3 weeks to perform appraisals and which make no guarantees about turnaround time. (Anecdotally, in some cases these AMCs have taken in excess of 6 weeks to return an appraisal, although that is the exception rather than the rule.)

AMCs do allow for “expedited” appraisals, but usually charge significantly ($200-300) extra for those rush deliveries; whenever possible, then, we strongly recommend that borrowers with conventional mortgages allow for at least 3 weeks for their appraisal unless they are willing to pay for an expedited appraisal.

Possibly related posts (automatically generated):

1. MDIA is going to delay settlements
2. Closing Loans In 9 Days
3. How Ethical Homes’ Mortgage Team Helps Buyer Agents Close More Deals
4. More on HVCC
5. Take action to prevent HVCC from harming consumers
6. HVCC Redux
7. Bridge Loans Help Borrowers With Short Term Funding Needs
8. When Should You Lock In The Rate On Your Mortgage?
9. Construction / Acquisition & Development Loans
10. TBW Suspended From FHA Lending

Tags: mortgage