The New Mortgage Disclosure Improvement Act (MDIA) starts tomorrow, what does this mean for your business and your clients? This Act will drastically change the landscape of timely closing so PLEASE read on!
Continue to read below or watch this video for a no nonsense explanation of this new disclosure law: http://www.thinkbigworksmall.com/mypage/player/tbws/12733/1110605 This is a great site to be a memebr of if you already aren't!
As part of the 2008 Housing and Economic Recovery Act (HERA), The federal reserve has published final amendments to regulation Z (Truth in Lending Disclosure-TIL) and A.P.R (Annual Percentage rate) to implement the requirements of the Mortgage Disclosure Improvement Act. While these changes were meant to protect the consumer with good intentions it will definitely cause last minute delays in closings as the final numbers can change from the original good faith estimate triggering the lender to re-disclose the A.P.R. and wait the required period to close.
The MDIA covers primary residences and second home application taken on or after July 30th, 2009. How will this affect your future clients closings?
•· There is now a minimum 7 day waiting period after the application and the early T.I.L. disclosure is provided before the loan can close. No more closings in less than 7 business days from application! Sundays and specified federal holidays do not count as a business day.
•· If there are any changes to loan terms or costs, and the A.P.R. changes more than the .125% tolerance a new T.I.L .must be re-disclosed and there is a mandatory 3 day (6 days if mailed, 3 days if signed by borrower) waiting period to close the loan. I predict this is where we will see most of the problems and cause closings to be delayed.
•· No fees can be charged to the borrower, with the exception of the credit report any sooner than 3 business days after the T.I.L. is disclosed.
Advisors Mortgage has already begun implementing the new MDIA rules and have been compliant with all Regulation Z rules previously, upfront disclosing and redisclosing the T.I.L., so this should be a fairly seamless transition for us. I wanted to inform you upfront, that if terms change in a loan transaction the closing could be delayed for up to three days depending on the allowed time from closing. So be aware as other lenders are transitioning to these new laws there will be increased amounts of delayed closings and make sure you give adequate time in your purchase agreements.
Now more than ever it is important to be working with competent mortgage lender that understands the rules and are compliant with today's new federal laws. When working with Advisors Mortgage and The Andy Burton Group you can be confident we will get the job done, disclose in advance, and tackle all of your clients challenges up front!
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