Here's another current observation from Your RED-Headed, Mortgage Guy
YES, the Mortgage Disclosure Improvement Act of 2008 comes to haunt us on July 30th.
Early disclosures are required for "any extension of credit secured by the dwelling of the consumer". Not that we in the mortgage business weren't already required to provide a Good Faith Estimate and a Truth in Lending form within three business days, we are now bound by other restrictions with this law.
The earliest a transaction can possibly close is SEVEN days AFTER the initial closures have been ISSUED by the lender (delivered by mail, e-mail or in person). This is assuming NO re-disclosure is required - let me discuss that.
Mortgage Lenders are now required to RE-DISCLOSE if the APR changes by more than .125% (whether it's bad or good), if the fees and charges change by more than 10% or there is a change in loan terms. THREE business days must pass in the event of redisclosure.
The three business day waiting periods begin when the consumer actually receives them. (I try to meet with my clients, so that I can hand them the disclosures directly.) When sent by e-mail, which we at Landover do over a secure line with encrypted e-mail, we are notified when e-mail is received.
Just to add to the fun, NO MONIES can be collected from the borrower, with the exception of a "bona fide and reasonable" credit report UNTIL they receive the initial disclosures. Another exception to this rule is in regards to collecting for an appraisal up front. Up-Front appraisal fees can be collected if the loan application is taken in person and the disclosures are distributed at that time.
On a side note, HVCC (our lovely appraisal CODE), requires the borrower receive a copy of the appraisal three days prior to closing.
I'll keep you posted when our next set of changes come to market. Until then, have a GREAT day!