Will your VA purchase deal close on time? VA reverses position on Oct 1 funding fee change

In a memo released late last week, VA announced the new funding fees are on hold until further notice. This means that lenders who had complied with the anticipated changes for closings after October 1, 2011, will now have to redisclose these changes on the GFE and TIL. If the rate on the Truth in Lending (TIL) disclosure changes more than 1/8 of a percent, borrowers will have to re-sign documents and wait three days. VA buyers who are exempt from the funding fee due to a service related disability are not affected by this. Under either scenario, the funding fee for veterans with a service related disability is zero.

I analyzed several hypothetical VA loans and did not find any examples where this change would trigger the need for a new TIL. However, as always, your mortgage professional should check the numbers to see what applies to your unique situation.

As of today at 1:30 PM (MDT) I have not seen any clarification on this. I will advise ASAP when I do.

Chip Allen

Crestline Mortgage Bankers

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