The Mortgage Disclosure Improvement Act goes into effect on July 30th. The rules are designed to help borrowers to better understand the rates and fees they are paying when obtaining their mortgages. A lender cannot charge upfront fees other than a reasonable fee for a credit report until you have received a truth-in-lending (TIL) disclosure and the annualized percentage rate (APR). The TIL has to be provided to the borrower within three business days of application and as of July 30th, there has to be a waiting period of seven business days after the applicant has received their documents or they are mailed. This new changes gives the borrowers more time to review their loan and it will eliminate quick transactions. Additionally, if the APR is one eight (.125%) higher in rate than the initial APR on the application, a new TIL must be disclosed at least three business days prior to closing. For example, if you applied for a loan at 5.375% and decided to float the interest rate to play the market and then locked in a rate of 5.5% or higher, a new TIL must be provided. Rates are often due to changes in credit scores, loan-to-value ratios or adding or deleting borrowers in the transaction.
One more rule to remember, a borrower must receive a copy of their appraisal three days before closing or waive the requirement if they do not think it is necessary.
PHH Home Loans and Coldwell Banker Home Loans is an industry leader and a lender you can trust. We are committed to regulatory compliance and ethical lending standards - and to managing these changes while providing you with excellent service.
For further information, call me, David Wolsky at 520-977-330 or please email me at david@davidwolsky.com.
