The stories of predatory lending practices from the earlier part of this decade are enough to make you wonder why any sensible person would fill out a mortgage loan application without a police escort. But some tough legislation that has taken effect over the course of the last year has improved transparency in lending across the country. But as with any sweeping regulatory changes, there have to be some casualties, right?
Sure enough. As part of the Mortgage Disclosure Improvement Act of 2008, any increase of the APR over .125% will require a new Truth in Lending disclosure and a subsequent (mandatory) waiting period of three days before the loan can close. P.S. Sunday doesn't count.
Now keep in mind that the actual interest rate on the loan is likely not to have changed at all to trigger the waiting period, rather the APR. The APR is a little more complex and is comprised of two factors: it includes your actual interest rate and any additional costs. Additional costs might include things like prepaid interest, private mortgage insurance or closing fees.
I've had two transactions in as many weeks affected by the new law. You can read a more detailed description of this part of the act on Robert Rauf's Blog.