TILA Changes Take Effect July 30, 2009
In 2008 Congress and the Federal Reserve enacted regulations which will take effect with all loan applications dated on or after July 30, 2009.
One important restriction states that fees for services other than the credit report only after the borrower has received the TIL (Truth In Lending). Receipt is assumed to be three days if the TIL is mailed. If it is delivered via another method (fax, email, personal delivery), receipt must be documented through the borrower signature/date.
This is important because it could delay the closing date by 3 – 7 days and is something you should be aware of.
For additional information visit:
http://www.mortgagedaily.com/forms/WbskMdia051109.asp or Google “Housing and Economic Recovery Act”, “Mortgage Disclosure Improvement Act”, and “Regulation Z”.
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Tagged Applications, Federal Reserve Board, Loans, Mortgage, Mortgage Disclosure Improvement Act (MDIA), Regulation Z, Regulations, Truth In Lending (TIL), your mortgage source
JoAnn Rooney Marlene CrawfordJuly 27, 2009 at 7:27 pm
***WARNING-Effective July 30th, 2009***
Changes to Reg Z/HERA (disclosure Regulations) that could delay your closings if you aren’t working with a knowledgeable mortgage professional! This is a MUST read!!!
As you are aware there has been a new law put into place that regulates the disclosure of the Truth-In-Lending to the borrower(s). All pre-paid finance charges that affect the APR on the TIL must be disclosed to the borrower 7 business days prior to the loan closing. Our fees are disclosed to the borrower at the time of application and do not change.
To try and avoid any delays, Your Mortgage Source, Inc. will request a preliminary HUD from the Closing Agent disclosing their fees. The title fees that are not APR impacting are the Title Search/exam fees, Title Insurance, Endorsements, Recording Fees, Doc Stamps and Intangible Taxes, Survey and Pest Inspections. ALL other fees are APR impacting. These fees will immediately be disclosed to the borrower and MUST not change. If they do, there will be a change to the APR which could result in a delay of up to 7 days to close-there is NO rushing this. This new regulation applies to anyone doing business with a bank or mortgage broker so please be aware.
Mortgage Disclosure Improvement Act: New Waiting Periods on Mortgage Transactions
Thursday, July 16, 2009
By Rhonda Porter
In an early post, Ardell wrote about the significance of a buyer being able to close quickly…new regulations may put a damper on that. With mortgage applications taken after July 30, 2009, waiting periods will go into effect with regards to when and how disclosure forms are provided to the consumer. The Mortgage Disclosure Improvement Act (MDIA), which modifies the Truth in Lending Act (TILA), was originally going to become effective on October 1, 2009, however the effective date was moved up two months which may catch some real estate professionals by surprise.
Here are some of the details:
Good Faith Estimate and Truth in Lending Disclosures….required waiting periods.
Under MDIA, early disclosures are required for “any extension of credit secured by the dwelling of the consumer.” Three business days from application, the consumer must receive an initial Good Faith Estimate and Truth in Lending (unless the borrower is denied at application).
The earliest a transaction can possibly close is seven days after the initial disclosures have been issued by the lender (delivered in person, mailed, emailed, etc.). This is assuming no re-disclosure is required.
Re-disclosure (waiting periods after the early disclosure and corrected disclosures) of the GFE/TIL are triggered if the fees and charges are more than 10%; if the APR is more than 0.125% or a change in loan terms. Three business days must pass in the event of re-disclosure. Re-disclosing is nothing new, it typically happened at closing–this will no longer be acceptable. Mortgage originators “should compare the APR at consummation with the APR in the most recently provided corrected disclosures (not the first set of disclosures provided) to determine whether the creditor must provide another set of corrected disclosures”. Double check those APRs prior to doc!
From MortgageDaily.com:
“The Commentary added by the MDIA Rule expressly provides that both the seven-business-day and three-business-day waiting periods must expire for consummation to occur. The seven-business-day waiting period begins when the early disclosures are delivered to the consumer or placed in the mail, and not when the consumer receives the disclosures. The three-business-day waiting periods begin when the consumer actually receives or is deemed to receive the corrected disclosures. If corrected disclosures are mailed, the consumer is deemed to receive the disclosures three business days after mailing. If a creditor delivers corrected disclosures via email or by a courier other than the postal service, the creditor may rely on either proof of actual receipt or the mailing rule for purposes of determining when the three-business-day waiting period begins to run.”