Palm Beach Real Estate and Loans

Today's post comes from Jason Price of Knightlines Mortgage Services:

The Mortgage Disclosure Improvement Act (MDIA) was signed in July of 2008, but became effective July 30, 2009. MDIA was created as an amendment with the TILA (Truth-in-Lending Act) laws. It is designed to ensure that borrowers receive certain cost disclosures early in the mortgage loan process to give them time to study the disclosures, ask questions, and shop loan terms.

The topics that are covered under MDIA include:

-New Fee Restrictions: Mortgage originators cannot collect any fees (other than a reasonable fee for a credit report) until the borrower has RECEIVED the early disclosures, eg. Truth-in-Lending (TIL).

-Expanded Covered Loan: TIL disclosure is required for all loans secured by a dwelling (including non-owner occupied homes) and is not limited to just purchase money transactions.

-Expanded Timing Requirement: Loan closings must be a minimum of seven (7) business days after the early TIL disclosures have been provided.

-Re-disclosure Requirement: Should the Annual Percentage Rate (APR) change occur that makes the APR from the early disclosures inaccurate beyond a certain tolerance, then a new disclosure with the revised APR must be provided. Along with the new disclosure, a loan must wait an additional 3 days from when the disclosure was provided before it can close.

-New Notice Requirement: There has been new language added in the disclosures for the Fed Box: "You are not required to complete this agreement merely because you have received these disclosures or signed a loan application."

I will be doing some subsection posts on these topics, as there is more to them than just these short descriptions that have been provided. If these new laws are not adhered to, then a closing that was to take place on a certain date will have to be postponed causing a seller to have to postpone their plans of what could have been a simultaneous closing. And you can see the snowball effect that this will cause.