We’ve mentioned before how the appraisal rules are have changed. (If you need to catch up, read this and this.) The highlights are as follows.

- Lenders and third parties are not allowed to have any influential contact with appraisers. For instance, as your Realtor, I can’t call your appraiser and ask when the appraisal is going to be finished.

-Borrowers must have access to a copy of the appraisal within in three days of the closing of the loan (although they may waive right.)

-This means that buyers should not plan to close any sooner than 30 days. Because the lender can only have limited interaction with the appraiser, it prevents them from pushing the appraisal to completion. Basically, everything will take longer.

Before we get frustrated, we have to remember that these new laws are designed to prevent the deceptive lending practices that led to the housing collapse. So, they are designed to protect you, the consumer. But, things take longer now.

Wells Fargo released a chart that breaks down some of the timing.

Min. # of Days	Item	Details
7	Initial Disclosures including the Truth in Lending (TIL) are issued to you by the lender for your review and instructions are provided. The TIL discloses in writing the terms and conditions of a mortgage, including the Annual Percentage Rate (APR) and other charges so that you are clear about the details of the transaction before moving any further.	In person application: you can receive your initial disclosures and pay the lender any upfront fees the same day as you apply.Phone application: the initial disclosures will be sent in overnight mail to you and considered “received” the next business day. The upfront fees (including any seller-paid fees) can be collected from you by the lender the next business day after you receive the disclosures. (The credit report fee is the only fee that can be paid at time of application.)
10	Rate Lock	Sharon Natarus, my lender at Wells Fargo, says “The borrower can lock their rate at loan application or float the rate, with the hopes the market improves. We must have the loan locked 10 days prior to closing to make sure the closing documents are properly disclosed. If the APR increases more than .125%, the disclosures need to be re-sent to the borrower.”
7	Appraisal	The property appraisal must be completed and mailed to you at least 7 business days before your desired close date. This allows for the day it is dropped into the mail, 3 full business days for mailing/receipt and 3 business days for you to review (unless you waived the 3-day review period upfront). Sharon simplifies: “7 business days is the earliest day possible that your loan can close. This gives the borrower the time to review the loan disclosures.”
7	Final TIL	“The final TIL must be received 3 business days prior to closing: The closing can occur on the third business day, after receipt. We must allow 3 business days for mailing, then the homebuyers have the 3-business-day review period required to determine if they are comfortable with their loan choice.”

This all sounds complicated, but there are things you can do to help keep your loan process on track. Because of the finite minimum length of time these things can take, you want to make sure you’re not doing anything that slows down the process. Here are Wells Fargo’s tips on What You Can Do:

• Obtain a credit-checked pre-approval before you start to shop for a home. (Applying in person, instead of over the phone or Internet, may help expedite the process.)
• Upfront and throughout the process, review the timeline and potential impacts with your home mortgage consultant so you can keep your Realtor or Builder informed. It is wise to plan for at least a 30-day close.
• Review the initial disclosure packet you receive. It contains important details about your loan transaction. Make sure to pose any questions to your home mortgage consultant.
• Review the appraisal delivery disclosure and determine whether or not you wish to waive the 3 business-day prior-to-close review period.
• Understand that changes in fees by third parties – such as your settlement agent – could also impact your closing date.
• Understand that the interest rate on your loan impacts the APR. This means that until you lock in your rate, an exact APR cannot be determined. Minimally, plan on locking at least 10 business days prior to the date you wish to close. (The APR is the annual rate that is charged for borrowing, or made by investing, expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the transaction.)
• If rates improve and you decide to re-lock at the lower rate, a re-disclosure of the TIL may not be required.
• Understand that a change in mortgage product could impact your APR and therefore your estimated closing date.

Related...

• June 15, 2009 -- New Appraisal and Lending Regulations
• January 26, 2009 -- Appraisal Controversies