Regulation Z of The Truth in Lending Act (TILA) has undergone important changes that you need to know about when talking to your clients. These changes take effect for all new applications taken on July 30, 2009 and after, apply to ALL types of mortgage loans in ALL 50 states plus the District of Columbia, and could impact the overall timeline of the mortgage loan origination process.

Here are the four key parts of the new regulation you need to know:

• Initial Disclosures. Under the new rules, initial disclosures must be provided to the borrower for all loan types within three (3) business days of when an application is taken or received. Initial disclosures include: the Good Faith Estimate (GFE), Truth in Lending Statement and state-specific disclosures.
   
• Collection of Up-front Fees. The new regulations prohibit lenders from collecting many up-front fees prior to when the borrower receives the initial disclosures. (Simple one here, we used to be able to order the appraisal up front now we have a three day delay on the front L) We can only order the credit report.
   
• Re-disclosures. If there are changes to a borrower's loan program, loan terms, and/or Annual Percentage Rate (APR), the initial disclosure package must be re-disclosed to the borrower, and it must be received by the borrower at least three (3) business days prior to closing. Anytime there is a re-disclosure the 3 DAY PERIOD starts over again. Arghhhhhhh
   
• Timing of Loan Closings. The business day definitaion for the purpose of the waiting periods is the same as the definition used for rescission, Monday-Saturday excluding legal public holidays. In short any day that regular mail can be delivered is a day that can be used for rescission. Prospect cannot schedule the loan closing until at least seven (7) business days after the initial disclosures are mailed to the borrower. If re-disclosures are needed because of changes to the loan program, terms or APR, the loan closing cannot be scheduled until at least six (6) business days after the re-disclosures are mailed to the borrower.