BluefoxToday blog : Closing Docs 3 Days Before Closing REQUIREMENT H.R. 4229

Closing Docs 3 Days Before Closing REQUIREMENT H.R. 4229

The Borrowers' Right to Inspect Closing Documents Act of 2009 H.R. 4229 is currently in the House Finance Committee for Review.Home Buyers Have Expectations

But it brings a HUGE question to mind:

"Are we ready to make mortgage lending so precise that we can meet 8 different disclosure dates within each transaction?"

THREE DAYS BEFORE CLOSING???  Mandatory?  Seriously?!?!

Maybe this is another job creation effort by Congress?  Most mortgage companies are so lean, that in order to meet Realtor expectations of closing in 20/30 days (or less), almost ALL mortgage companies would need to hire an extra person for every 10 transactions (IMHO)... or maybe we just need to get REALLY efficient?

I'm trying to figure out where those 3 days are going to come from!  I just made a list of places that might be spots in our office where we might be able to squeeze a few hours -but for the most part underwriting is what sucks up time.  And if you think about the fact that an underwriter can only really look at a new loan every 45 minutes to an hour - you can see why it takes a while to get through there...

I don't know how we will all change systems to adjust to this latest twist (if it passes) - but I can tell you this much about Mortgage Lending in 2009 and 2010...

Mortgage Lenders deserve an AWARD for being the most flexible industry on the PLANET!

Comment balloon 34 commentsEleanor Thorne • December 15 2009 10:07AM



Some of these new regulations are okay while some are just hard to figure out. In many cases Washington is barking up the wrong tree. It should start fixing things from Wall Street on down, not the other way around.

Posted by Esko Kiuru about 11 years ago

I won't even touch the politics behind this, but it is up to us as agents to do our part and work with our finance teams as partners - walking a mile in their shoes to help set proper expectations with our clients.

Posted by Lisa Moroniak, SFR - Short Sale & Foreclosure Certified (Keller Williams Realty | Northern Virginia | 703.635.0388) about 11 years ago

Realtors will just have to start building the extra 3 days into the deal.

Posted by Terry Lynch (LAR Notary and Closing Services) about 11 years ago

I can't wait to see how this mess sorts itself out.  I don't think it is going to be pretty.

Posted by Damon Gettier, Broker/Owner ABRM, GRI, CDPE (Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert) about 11 years ago

I really don't know how it's even reasonable to expect the gap to narrow here to make a 3 day deadline when we currently can't see docs 3 hours prior to closing in many cases. Pretty unrealistic to say the least - I don't see how this is going to be anything but ugly.

Posted by Susan Thompson-Solomons, Southern MD Real Estate-Solomons Specialist (Berkshire Hathaway Home Services McNelis Group Properties) about 11 years ago

This is so scary - I guess Terry is right, that we'll just have to build in the 3 extra days, but most lenders are already pushing things to less than 24 hours before closing to begin with! 

Posted by Emily Lowe, Nashville TN Realtor (The Lipman Group | Sotheby's International Realty) about 11 years ago

I agree that it is going to make the already stressfully closing process even more intense, but it looks like it's just another adaptation we will have to make. Again, doing our job upfront and being honest with our clients about timelines will be vital as we start out 2010.


Posted by Jessica Steele (Welcome Home Realty) about 11 years ago

Borrowers are supposed to get the HUD 24 hours before a closing right now but that rarely happens.  I think by getting documents for borrowers to review at least 48 hours before closing isn't unreasonable.

Posted by Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239, Michigan homes for sale ~ (Real Estate One) about 11 years ago

Like any new legislation we will need a bit of time to adjust. We have all gone through so much change.

Posted by Terry & Bonnie Westbrook, Westbrook Realty - Grand Rapids Forest Hills MI Re (Westbrook Realty Broker-Owner) about 11 years ago

However we can benefit the consumer, we should do it, as long as it makes logical sense.  Some regs do, some don't.

Posted by Chris Olsen, Broker Owner Cleveland Ohio Real Estate (Olsen Ziegler Realty) about 11 years ago

I list foreclosures and I'm very used to seeing the docs 3 days in advance for these tranactions and frankly I love it.  Buyer have a right to see the documents more than 2 seconds before they are expected to sign them.  This is one regulation I have no problem with.  And I build enough time into my contracts to take care of the time frame issue, and I prompt my buyers to get all their docs to the loan officer with initial application so there is nothing but appraisal to wait on.

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) about 11 years ago

This will be interesting - but I can see the need for more transparancy in the process - I'm sure after a few hick-up, everyone will figure it out.


Posted by John Occhi, SRES,CPRES.ePRO - Temecula-Murrieta CA Real Estate (Mason Real Estate) about 11 years ago

I'm with you on this one Eleanor!!  With the new restrictions on the GFE and the wonders why we need the extra headache when it comes to closing time!!  Hopefully things will return to normal again when the 'market' flattens out one of these days!  Happy Holidays!

Posted by Stephen Arnold, CRS, GRI, SFR (HomeSmart Elite Group) about 11 years ago

I think once this market, especially the lending side, normalizes the loans will get done sooner. This will hopefully solve some of this issue.

Posted by James Lyon (Vista Pacific Realty) about 11 years ago

Sorry lenders, but you're a tease!!! It may not be your fault, but can we get some closings on time?!?

Posted by Todd & Devona Garrigus, Broker / REALTORS® (Garrigus Real Estate) about 11 years ago

I like the idea.... it forces operations dept to get docs out on time.

No matter how clean of a file I submit sometimes.... No matter how EARLY I turn it in to underwriting....I always seem to get booted to the back of the line for rush files. Makes me mad.


Posted by Tom Burris, Texas/Louisiana Mortgage Pro - 13 YRS Experience (NMLS# 335055) about 11 years ago

well, the Realtors can stop, if they haven't already, writing those 30 day (or less) contracts as in most cases those dates can't be met and it's getting worse.

24 hours, for hud review, is sufficient, if enforced. 

Posted by Jay Beckingham, Seniors ROCK! (Christensen Financial Mortgage) about 11 years ago

It's going to mean longer times between contract and closing...  Educating sellers on the buying process will also help to keep deals together!

Posted by Debbie Summers (Charles Rutenberg Realty ) about 11 years ago

I completely agree with Terry and Debbie. We've got to educate realtors and consumers that it will take a few extra days before closing. 

Posted by Home Loan Search.Online (Home Loan Search Online) about 11 years ago

In the past several years the one thing that has been consistent in the Mortgage Industry is CHANGE, and I'm sure we will see more in the months and years to come.   

Posted by Douglas Clark, Home Mortgage Consultant- NMLS #561149 (Wells Fargo Home Mortgage) about 11 years ago

January 2010 is going to be interesting.  The new GFE's and rules regarding GFE cost disclosures are going to add to the chaos.  We'll get through it though!


Posted by Karen Pannell, Owensboro KY Real Estate -270-903-2167 Homes, Cond (Real Living / Home Realty) about 11 years ago

If this passes realtors should start thinking about writing 45 day contracts.  That way there would be plenty of time.  Getting FHA loans out in 30 days almost always is last minute because inevitably the borrowers have some issues that have to be resolved, and the lender has to wait on many other people to do their job before they can get docs out.  This is going overboard....

Posted by Michael Regan, Home Loan Extraordinaire (The Regan Team Home Loan Group) about 11 years ago

I want to know who's gonna retrain all the Moving Co.'s and truck rental people to become more fluid ?

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) about 11 years ago

Wow, three days does seem excessive. But if I have a buyer who wants to close in a short time frame, I double check with the lender first to make sure it's even do-able...

Posted by Dawn Nuzzi ('Til Dawn Real Estate) about 11 years ago

Respa, The Final Rule and the new Mortgage Disclosure Information Act already will provide enough delays; I don't think we need another Act to get in the way of our clients closing in a timely manner. There are so many disclosures and re disclosures these days, I don't think anyone really knows what they are signing anymore...



Posted by Jason Potrzeba, Mortgage Banking Officer (Webster Bank) about 11 years ago

Yea well who in Congress came up with that one. Obviously someone who doesn't understand the lending process.

The buyer doesn't need 3 days to review.

24 hours would be more than enough time. Justsayin'

Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) about 11 years ago

Good news Missy, RESPA already requires that the HUD be made available within 1 business day of settlement if the borrower requests it.

Posted by Jason Potrzeba, Mortgage Banking Officer (Webster Bank) about 11 years ago

Maybe three days is extreme but consumers need time to review these documents and we as Realtors should be glad to get them early so between us and the mortgage pros we can explain any questions or discrepancies there may be.  Will make settlements that much less stressful IMHO.

Posted by Jason Howe (Prudential Bob Yost Homesale Services) about 11 years ago

Jason is right - the borrower has the right to request to review the HUD, Note and DOT 24 hours prior to closing, but most borrowers are not aware of this requirement from RESPA... If they FORCE that to be a "standard" - I'm with Missy, that should be time enough!

Posted by Eleanor Thorne, Equity Resources 919-649-5058 (Equity Resources) about 11 years ago

Thanks for sharing. This might hold up a quick settlement.

Posted by Al Murray (Prudential Ridgeway Realty) about 11 years ago

Is it three days before signing or three days before closing?  Here in California, it's not uncommon to have three days between docs/signing and close.  Are they looking for a recission period like on a refi?

That said, I think there's enough bureaucracy and big government in the industry already.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 11 years ago


Someone commented that the realtors will just have to build in an extra three days on the contract.  With the TILA requirements, that's not going to be a panacea.  Can you tell that the folks who write the law (about anything) haven't a clue as to how it works?!

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) about 11 years ago

Congrats on the Eleanor's shiny new star!  What a topic - on one hand I'd love to see the HUD anytime prior to the morning of closing or AT the closing table.  Even invoking the right to see it 24 hours in advance for my client does no good.  I for one am tired of scurrying to get done all that we (mostly my clients) have to do prior to closing only to sit and WAIT for the package to get to the attorney's office.  It's frustrating and unnecessary.  But my question is; IF the 24 hours "rule" which we have NOW isn't being enforced what/who thinks this 3 day rule is going to happen...

Posted by Lee & Pamela St. Peter, Making Connections to Success in Real Estate (Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522) about 11 years ago

I wanted to share some more information.

Fannie Mae and Freddie Mac make it harder for home buyers and real estate investors with mortgages on Condos. It's hard to really understand why these giants corporations are tightening their regulations while the government is trying to fix the economy. If you're a condo home buyer or a condo home seller you should read this article because it might change the way your realtor presents your property.

These days most real estate purchases are done by real estate investors. This is a great time for all investors to put the money they've saved in the past years in real estate, but purchasing condos is a little different animal I guess unless if you will purchase the property cash. Condos are a little different than single family residents by all means, also by the way they've getting financed by banks or the government.

Fannie Mae and Freddie Mac have said in march that they will no longer guarantee mortgages on condos in buildings where fewer than 70 percent of the units have been sold. They've created controversy, this may drive the condos market down because they are one of the main investors in America to land money on real estate. I'm thinking how the first 70% of condos will sale if home buyers and/or real estate investors can't get a loan to purchase them.

While I'm thinking about Fannie Mae and Freddie Mac's new regulations and thinking about the real estate market and the economy crisis in the world I discovered another new reason why Fannie Mae and Freddie Mac will not land money to new home owners: "delinquency in home owner association dues. I really don't know why it's so important that while a home buyer with a great credit comes to purchase a condo in a building that other homeowners weren't responsible enough to pay the Home owner association dues will not qualify for a mortgage.

Fannie Mae and Freddie Mac said they will not guarantee mortgages to condo buyers if 15% of the homeowners in the building are delinquent on the homeowner association dues.

That's what I wanted to talk about today just to give you readers some general information about the market.

Good Luck.

Posted by yanni raz (hml investments) about 11 years ago