Residential Real Estate Mortgage Loan Commitment Letters
The Vermont Department of Financial Regulation (DFR) now requires mortgage lenders to issue commitment letters in connection with all residential mortgage loans (Regulation B-2018-02, revising the content and timing requirements of residential mortgage loan commitment letters). The new requirements are effective October 1, 2018. Regulation B-2018-02 supersedes and replaces Regulation B-98-1.
The revised regulation establishes the form of the commitment letter and outlines the general requirements for the content contained in the commitment letter. If a lender is required to issue a closing disclosure under Federal Regulation Z, the lender has the option to issue a short form commitment letter. (Regulation B-2018-02, Section 4, Subdivision B). In the case of a reverse mortgage loan the content of the commitment letter is also outlined (Regulation B-2018-02, Section 4, Subdivision C). All commitment letters must be delivered to the borrower no less than three business days prior to the closing, unless an exception applies. (Regulation B-2018-02, Section 5).
The full text of the regulation can be found at the DFR website.