Bay Area REBlog

Oh my goodness, more regulations!!  I know it is a result of the mortgage crisis and buyers saying they did not know information about the loans they agreed to sign but now we will see more time delays. The Mortgage Disclosure Improvement Act (MDIA) amends the Truth in Lending Act- (you know the Regulation Z, in which lenders provide adequate time to review information about their loan). 

I can see getting ready to close escrow and everything being held up because interest rates have changed on the loan at the last minute. Don’t get me wrong, I believe disclosure is important and clients need to know what is happening. I just dread the nail-biting and grumbling that is coming.

Here are the new Federal regulations in case you’re in the house buying /refinancing market.

• Initial Truth In Lending disclosure. A seven-business-day waiting period is now required between the delivery of initial disclosures and the signing of closing documents. This will eliminate the possibility of closing in less than seven business days unless the borrower faces a bona fide personal financial emergency.
• Up-front fee collection. Up-front fees cannot be charged until after the borrower receives the initial disclosures. If disclosures are mailed, the fee is charged the fourth business day after mailing. If disclosures are hand-delivered, the fee is charged the same day.
• Redisclosed Truth In Lending (TIL) . If the interest rate or fees change, causing the Annual Percentage Rate to increase by more than 0.125% then a revised TIL must be sent to the borrower so that the customer receives it no fewer than three business days prior to closing. Each time the TIL is redisclosed, the waiting period starts over and could affect the original closing date. If the rate is in float status, a redisclosed TIL will not be provided each time there is an APR increase. Redisclosure should be sent, if needed, eight business days before the estimated closing date.

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