Posted on Wednesday, July 15, 2009
Revisions to the Truth in Lending Act (TILA) will require lenders to comply with the following after July 30, 2009:
The new requirements apply to all mortgages secured by a borrower's home, including primary and second homes and refinancings. Investor loans continue to be exempt.
Lenders must give good faith estimates of mortgage loan costs within 3 business days after the consumer applies for a loan (early disclosure). The lender may not collect any fees before the disclosure is provided, except for a reasonable fee for obtaining a credit report.
The closing may not take place until expiration of a 7 day waiting period after the consumer receives the early disclosure.
If the annual percentage rate (APR) increases by more than 0.125 percent, the lender must provide a corrected disclosure to the borrower and wait an additional 3 business days before closing the loan.
The APR includes not only the interest rate on the loan but certain other costs related to settlement, so it will be important for any fees that affect the APR to be as accurate as possible, as early as possible, to minimize the need for a corrected TILA disclosure.
The consumer may modify or waive both waiting periods for a documented personal financial emergency, but must receive the disclosures no later than the time of the modification or waiver.
Thats all great, but the big problem has always been and still is BORROWERS DON'T EVEN READ THEIR DOCUMENTS and THEY TRUST LOAN PROFESSIONALS (who unfortunately are sometimes bad guys) TO EXPLAIN WHAT THE DOCUMENTS MEAN.
So the big news....... EFFECTIVE JULY 30, 2009 NOTNING HAS CHANGED.