FAQ on the Housing and Economic Recovery Act (HERA)
The following FAQ may answer some of the concerns you may have on the new HERA mortgage requirements and how they will affect the timeline of your real estate transaction.
Q. Do the new requirements regarding the issuing of disclosures and fee collection apply to investment property?
A. No. The new requirements apply only to primary and secondary residence.
Q. What are the effects of adding a Home Equity Loan (HELO) or Line of Credit (HELOC) after the initial application?
A.
HELO: All disclosures must be reissued
HELOC: No impact, reissuing of disclosures is not required.
Q. What happens if the homebuyer needs to put off paying the upfront fees?
A. This will likely halt progress to the transaction, as the lender may not be able to order certain services (the appraisal, etc) until the upfront fees are received.
Q. Can a credit reporting fee be collect at the time of application?
A. Yes, this is the only fee that can be collected prior to the homebuyer receiving his or her initial disclosures.
Q. How do you know if the initial APR has to be re-disclosed?
A. If the APR increases more then 0.125% from the initial Truth in Lending (TIL), the lender is required to update and re-issue the new and final APR in the TIL disclosure a minimum of 3 business days prior to the close date.
Q. Are the new regulations only required for purchase transaction, or are refinances affected as well?
A. The new guidelines apply to both purchase and refinance transactions.
Should you have any questions or need further information,
please don’t hesitate to contact me, (775) 220-1630
Or visit my blog at www.SellingNorthernNV.com
Joshua Talayka
Chase International
Office: 775 850 5900
Toll Free: 877 922 5900
Cell: 775 220 1630
Fax: 775 850 5901
985 Damonte Ranch Pkwy, Ste. 110
Reno, Nevada (NV) 89521
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