Dennis' Mortgage Blog

July 23rd, 2009 2:00 PM

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.

As I said interpretations vary from lender to lender as to how the MDIA will be implemented and how the dates will be calculated and when loan docs will be able to be signed. Critical to the process is the APR (Annual Percentage Rate) and any variance between the initial TIL and the final TIL. Many factors affect the APR, including third party fees like escrow and title (for list visit this page on my website). If third party fees vary significantly from our initial estimate it could generate the 2nd TIL disclosure requirement and up to six days in delaying loan docs being signed. Therefore it is important all originators prepare fairly accurate Good Faith Estimates and TILs up front.

Your Question!

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.

As always I am available for your questions. Please visit, and send your co-workers and escrow and title officers, to my website page where I explain the Truth-In-Lending and what fees are included--send your clients as well, they can apply on-line!

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

Follow me on Twitter (user name dcslb) for daily updates on market conditions and industry updates.

Check out My Mortgage Blog!

www.DennisCSmith.com : apply on-line, check rates, check loan status and much more

Serious About Service


Posted by Dennis C. Smith on July 23rd, 2009 2:00 PMPost a Comment (0)

Recent Posts:

Archive:

My Favorite Blogs:

Sites That Link to This Blog:

Dennis C. Smith, California Dept. of Real Estate Broker #00966315

Stratis Financial Corporation, California Dept. of Real Estate Broker #01269597


Stratis Financial Corporation 5772 Bolsa Ave #250 Huntington Beach, CA 92649
Phone: Fax:

Contact Us | Dennis' Bio | Testimonials | Truth-In-Lending Disclosure Explained | New Good Faith Estimate | Social Media | Tell a Friend | Home | Loan App Checklist | Site Map | Loan Application | Mortgage Calculators | Customer Login | Are You Pre-Approved? | Daily Rate Lock Advisory | My Blog

Copyright © 2012 Stratis Financial Corporation
Portions Copyright © 2012 a la mode, inc.
Another XSite by a la mode, inc. | Admin LoginTerms of UseSite Map