Dean Wong Financial Blog

As you all probably know, MDIA (Mortgage Disclosure Improvement Act) was put into place last Friday.  Below are the main bullet points of this act that can impact your contingency periods and close of escrow dates. 

 

So CALL me if you can’t afford to lose 3 days on the front end or 7 days on the back end for your escrows.  Have a great week and Happy Selling,

• Early Disclosures: A lender must provide a borrower with an initial Good Faith Estimate within three business days of receiving the borrower’s written loan application as specified.  For this provision, a “business day” is generally defined as a day on which the lender’s offices are open for business.

 

• Upfront Fees Restriction: Neither a lender nor any other person may impose any upfront fee (Pre-approval, Application, Credit report, Appraisal, etc) on the borrower until the borrower has received the early disclosures in person or, if mailed three business days after the early disclosures are mailed.  For this rule, a “business day” is defined as all calendar days except Sundays and legal public holidays as specified.

 

• Re-disclosure Requirement: If the final Annual Percentage Rate (APR) at loan consummation varies more than 0.125% (or 1/8 of one percent) from the initial APR on the early disclosures of a regular transaction, the lender must provide the borrower with a corrected disclosure at least three business days before the loan is consummated.  For purposes of this waiting period, a “business day” is defined as all calendar days except Sundays and federal legal holidays as specified.

 

• Three-Day Waiting Period: For corrected disclosures, a lender cannot consummate a loan until three business days after the borrower receives the corrected disclosure in person.  If the corrected disclosure is mailed, the borrower is deemed to have received it three business days after it is placed in the mail.  A borrower may waive this waiting period in writing in case of a bona fide personal financial emergency, such as an imminent foreclosure sale.

 

• Seven-Day Waiting Period: A lender must wait seven business days after providing the early disclosures before consummating the loan.  For purposes of this waiting period, a “business day” is defined as all calendar days except Sundays and federal legal holidays as specified.  A borrower may waive the waiting period in writing in case of personal financial emergency, such as an imminent foreclosure sale.

Tags: mdia, mortgage disclosure improvement act, update

This entry was posted on Monday, August 3rd, 2009 at 6:43 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.