Will the Proposed New Rule Allowing Buyers a 3 Day Cancellation Period, As Well as Getting Their Mortgage Applications Fees Refunded Help or Hurt?

By
Real Estate Agent with Lanier Partners

The federal reserve is proposing new rules that will allow home buyers to cancel their mortgage loan within three business days. Additionally, it will require that all fees paid, except for credit checking fees, to be refunded. It also appears that it will allow the borrowers to make multiple applications and then cancel all but one.

The article about these proposals appears to reach the conclusion that this will be somewhat benign and have little impact upon borrowers and lenders, but, I am not sure. Will there be a ripple effect upon finance contingencies in a home purchase? Will it encourage buyer's remorse during any due diligence period?

I am very leary of any new regulations that hit the markets, whether housing or otherwise. They often have more unintended consequences than benefits. Does anyone remember HVCC?

What do you think. Will this be benign? Will if be positive? Will these have a negative effect on a housing market that is already on life support?

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Rainmaker
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William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Got protect us from well intentioned fools and those buying votes with other peoples money!

"cancel their mortgage loan within three business days." They all ready have this right with the new RESPA rules, allowing them to back out three days before closing. I wounder how they propose to back out of a loan 3 days after closing and for no cost?

Fees would have to go up drastically to cover the cost of rescission's and multiple approvals! But it does sound good to the ignorant!

Bill

Sep 05, 2010 11:09 AM #1
Rainer
190,656
Jon Budish
Resident Realty - Fort Collins, CO

In a more prefect, honest world, it would probably be benign.

Sep 05, 2010 02:24 PM #2
Rainmaker
298,732
John Mayer
Oikos Realty, Cape Canaveral, Cocoa Beach Florida - Cocoa Beach, FL
Your Beach Area Expert

Mike - It's total BS! Make a decision and run with it or pay the consequences.

Sep 07, 2010 08:47 PM #3
Rainmaker
563,876
Mike Saunders
Lanier Partners - Athens, GA

Bill - isn't that only if the GFE and closing HUD-1 are grossly different?

Jon - I can see it being abused.

John - I think it is the all fees reimbursed that worries me the most

Sep 10, 2010 10:25 AM #4
Ambassador
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Judi K Barrett
Judi Barrett~Integrity Real Estate Services~Idabel, Oklahoma - Idabel, OK
Broker/Owner, Integrity Real Estate Services -IDAB

Mike,

I had not heard this was being considered. 

So their appraisal fees and all other fees would be refundable??

Sep 10, 2010 10:31 PM #5
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Rainmaker
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Mike Saunders

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