There have been a lot of changes in our industry the past couple of years and a few more very big changes are on the way. Every mortgage application taken for a residential property that is primary residence or second/vacation home (investment properties exempt), conventional or FHA, conforming or jumbo, fixed or ARM, bank or broker--All mortgages will be impacted by the Mortgage Disclosure Improvement Act (MDIA), also known as the Truth-In-Lending Act (TILA).

The Act has some quirky features and interpretation varies form lender to lender. In a nutshell it boils down to when, how and from whom borrowers receive their initial Truth-In-Lending statement (TIL), a waiting period of seven days from the initial TIL being received, when fees for appraisals can be collected, and when, how and if a final TIL must be given to the borrower which starts another three day clock during which the borrower may not sign loan documents--generally a three day period from when loan docs are ordered and a new TIL is released.

What can I do as a real estate agent to make compliance easier with the new MDIA? As soon as you have accepted offer/counter-offer get a fee schedule from the escrow and title companies and provide them to me for my final application with the client. This will allow me to input accurate information on the Good Faith Estimate and reduce the chances for a delay caused by the need for a final TIL being sent and acknowledged by the borrower.

Escrow and title companies must be made aware of this new regulation and I encourage you to encourage them to have pre-printed fee schedules and to follow them closely so as not to negatively impact fees that could trigger additional TILs late in the escrow.

This regulation is effective with all applications taken July 30, 2009 forward.

Again please contact me with any questions.

Dennis C. Smith
Stratis Financial
Direct (562) 472-1118

Mobile (562) 243-6912

Fax (562) 684-4316