Can Vacation Time Affect RESPA’s 10% Tolerance and Cause a Delay?

You bet it can!  Here are some tips to prevent your transaction from going over the 10% tolerance.  It doesn’t take much to push a loan over this tolerance, but by asking your customer some questions early in the process and sharing the information with your loan officer and escrow officer, will prevent surprises and associated delays at the closing table.

*  Will the buyers be out of town for the signing? There will be a signing fee.  I would venture to guess that this occurs in at least 40% of the summertime closings.

*  Will one or more of the parties require a Special Power of Attorney for their transaction? IF a POA gets approved by the lender, there will likely be a doc prep fee as well as additional recording fees for the document.

*  Will the buyers be in California for the signing? You may be looking at additional recording fees.  The next article is about one such experience.

Isn’t is surprising how these small items can cause such a big affect?

RESPA is clear that any violations of the 10% tolerance must be cured by the lender within 30 days of closing and it is solely the lenders responsibility, but keep in mind that any re-disclosure necessary may delay the closing.  As professionals we all should work together for a smooth and “seamless” closing experience for our customers.

See Booth Escrow.