You also have to wonder why they don't fix the biggest problem in the industry... the lack of regulation of the fees charged by lenders to borrowers. While there has been lots of talk over the years about regulation nothing ever seems to make it out of committee.
The Mortgage Disclosure Improvement Act contains some major changes that may affect your escrow closing date on all loans that are covered under RESPA related to an owner occupied residence. The second change covers new regulations concerning the financial information you provide to your lender if you are obtaining a conforming loan.
Changes to Truth in Lending:
Starting on July 30, 2009 the following changes will be implemented:
1. Within 3 business days a lender must provide a borrower an initial good faith estimate of the terms of the loan and the lenders charges.... however a lender must now wait a minimum of 7 business days after the initial disclosure is sent to close the loan.
2. If the initial good faith estimate changes because... the interest rate goes up or down by more then 0.125% or there is a change in the fees the borrower is charged by $100 or more... then a new disclosure must be given to the borrower and the escrow can't close until at least 3 business days after the borrower has received the revised disclosure. There are a number of items that can trigger either of the above situations and extend the escrow period by 5-6 days.
Income and asset documentation changes:
While many of the changes being enacted by Congress are meant to curb previous excesses as we saw with the change in Appraisal rules... sometimes good intentions are not enough.