Residential Real Estate Mortgage Loan Commitment Letters

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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