Congress approves the Mortgage Disclosure Act of 2008

What does the Mortgage Disclosure Improvement Act of 2008 mean to me?

The Key elements of the ACT are: 

1.  Consistent lending practices among lenders
2.  Protects consumers
3. Keeping the consumer informed of the APR (Annual PercentagevRate) allowing the consumer time to change or amend their decision on the mortgage transaction.  More informed on the mortgage process.
4. Instructs a waiting period before a loan can close. 
5. Minimizes the collection of fees up front at application.

A. Waiting periods are broken into two aspects:

a.       Application date or date early disclosures are mailed to closing date cannot be less than 7 business days including Saturday. The closing date can take place on the 7th business day.*

b.      When-ever the APR is increased by more than 1/8% the borrower must be notified with a new Truth in Lending.   If the TIL is delivered in person there is a 3 business day waiting period before the closing
can take place.   If the TIL is mailed there are 3 days built in for mail time and then the 3 day waiting period thus creating a 6 business day waiting period before a closing can take place. **

c.       Waiving of any of the waiting periods is not allowed.

B. The collection of up front fees is prohibited based on the following:

a.       The borrower cannot be charged for any fees at time of application other then a standard Credit report charge until they have received the up front disclosures. 

This means:

*          If the disclosure is provided in person, after handing the disclosure to the applicant, the banker can collect any fee he/she desires. 

*          If the disclosure is mailed, the banker can collect only a reasonable credit report fee at the time of application.  Other fees cannot be collected until after midnight on the 3rd business day after mailing.  Example, disclosures are mailed on Tuesday, a fee may be collected after midnight on Friday (assuming no legal holidays).