Recent Changes in Disclosure Rules….Can this cause problems getting to Settlement?

Starting July 30, 2009,the Federal Reserve Board has adopted new guidelines that will directly impact mortgage lenders and disclosure requirements.  

The Mortgage Disclosure Improvement Act of 2008  has  changed  Regulation Z of the Truth in Lending Act. In short, MDIA makes  new requirements regarding loan disclosures. These rules apply to federally-related mortgages under RESPA and will apply  to purchases and refinances.

 Key Changes:

*Borrowers must be provided with a GFE.   (Good Faith Estimate)   within 3 business days of receiving a written loan application. No fees, except for a credit report, may be taken until then.

*If the final APR at loan consummation varies more that 0.125%, which is 1/8 of 1 percent, from the initial APR on the earlier disclosure, then the lender MUST give the borrower a new disclosure at least 3 BUSINESS DAYS BEFORE CLOSING.

These regulations have been set up to protect you, the consumer,  when making, what might be  one of the biggest financial investments of your lifetime.

Please let me know if you have any further questions on this topic.

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