REMINDER NOTICE: MORTGAGE DISCLOSURE IMPROVEMENT ACT

EFFECTIVE JULY 30, 2009

The following is a breakdown of early disclosure requirements under the Mortgage Disclosure Improvement Act and specific changes made to ProClose to accommodate MDIA, applicable to all loan applications beginning July 30, 2009.

  • Fee Restrictions: With the exception of a bona fide and reasonable credit report cost, no fees may be collected from the consumer by a creditor or other party prior to the issuance of the initial disclosures. Creditors/Lenders should beware - no fees should be collected by the broker or 3rd party loan originator prior to the issuance of the initial disclosures for creditors to stay in compliance with MDIA.

  • Initial Disclosures: While creditors must still issue early disclosures within 3-business days of application, the issuance no longer applies only to purchase money and primary dwellings. The issuance now applies to any extension of credit secured by the dwelling of a consumer including refinance and home equity loans (not HELOC).

  • Delivery: The initial TIL disclosure must be delivered or mailed within 3-business days of application AND at least 7-business days before consummation.
  • No completion requirement: The statement "You are not required to complete this agreement merely because you have received these disclosures or signed a loan application." is required on all TIL early disclosures. MBS-ProClose added this language to the TIL (ProClose ID AAAK0G) and released the form to clients July 15, 2009.

  • Corrected Disclosure: If the APR is out of tolerance as defined in Reg Z Section 226.22, a corrected TIL must be re-disclosed at least 3-days prior to consummation. 3-business days is considered 3-business days prior to actual receipt. If the creditor relies on mailing, 3 additional days must be added before consummation since when early disclosures are mailed, the consumer is considered to receive the disclosures 3-business days after they are mailed.

To enable clients to print a TIL disclosure from within ProClose for any scenario, the coding of the Date at the top of the TIL now prints as follows:

  1. A *new field named "TIL Disclosure Date" prints on the TIL when the field is populated. No "e" for estimate shows up on the rest of the form. (Specifically available for a corrected TIL.)
  2. If the above new TIL Disclosure Date field is blank and it is a preliminary TIL, the form prints the GFE date if the GFE date field is filled in and an "e" for estimate prints where appropriate.
  3. If the new TIL Disclosure Date field is blank and the GFE date is blank, but it is still a preliminary TIL, the form automatically prints "Today's date" and an "e" for estimate prints where appropriate.
  4. If the new TIL Disclosure Date field is blank AND it's a final TIL, the closing date automatically prints.

*The new field is currently being added to the ProClose closing system and will be released this week. Contact your Client Support Rep to create a mini-formset early disclosure package in ProClose.

  • Business Day: A "business day" is any day the creditor is open for standard business operations. It excludes Sundays and holidays, similar to Right of Rescission.

  • Waiver: The consumer may waive the 7-day and 3-day initial disclosure delivery periods if they meet a bona fide personal financial emergency; however, if the TIL is out of tolerance, the waiver is no longer effective. The consumer may sign a waiver again after receiving the corrected TIL.

The above is not legal advice but helpful guidance and assistance as your legal or compliance department finalizes your MDIA policies and procedures. See REG Z Section 226 for more information.

Sincerely,
MBS-Compliance Team
2009 Copyright ProClose®