New Law May Cause Delays for Borrowers

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CHANGES to the Truth in Lending Act that took effect last month, requiring lenders to provide certain disclosures about mortgage fees, will undoubtedly help many borrowers make better-informed loan choices. But some in the industry think the new standards could create further delays in an already slow lending process.

The regulations mandate a three-day review period for the loan documents before the loan process can begin in earnest. And if the interest rate changes even marginally before the settlement date, a new set of disclosure documents must be given to borrowers, restarting the review process.

Don Romano, the past president of the New York Association of Mortgage Brokers, said the new regulation would “add a level of consumer protection” to the mortgage process. But, he said, “it takes a lot of flexibility away from the borrower, in getting to the closing table at the best time.”

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http://www.nytimes.com/2009/08/16/re...te/16mort.html