As many of you know there have been many recent new changes that have gone into effect as of July 30, 2009. One of those changes is the MDIA which is the Mortgage Disclosure Improvement Act Policy.
There are a few things that you have to remember for this new policy:
1) There are now waiting periods that the buyer has in order to review the documents of 3 days, each time they are disclosed or re-disclosed.
2) You cannot close a loan for a min. of 7 business days from the first set of documents signed
3) Nothing other than credit can be ordered until we have signed documents. If the documents were marked "mailed" we have to wait 3 business days and on the 4th day, we can order appraisal etc..
4) Anytime the Truth in Lending changes .125% higher or lower we must re-disclose and then wait 3 business days.
5) A business day is considered any day other than Sunday and Federal Holidays.
Basically, what this boils down to is that the fees disclosed to the borrower can not be .125% (eighth) higher or lower than what was originally disclosed. If it is an eighth higher or lower, than we will have to re-disclose those fees and wait 3 business days before closing.
So you ask, what are the fees that will be included in the TIL that can effect and trigger off the 3 days waiting period of re-disclosure? I have included the list of items below for your review.
Many Realtors have also asked what they can do to help this along and make it smoother for us to make sure our numbers are as accurate as possible. A few things that you can do to help your loan officer are:
1)encourage your buyer to get with the loan officer as soon as they can to sign the application.
2)ANYTIME you have an addendum done, please send it over as soon as you can. especially if there are any changes to the purchase price in any way. this will trigger a re-discloser.
3)Short Sales can be another one that can bugger up the closing and trigger off a
re-disclosure. We all know that we can wait months sometimes for the official acceptance from a bank. And usually when they finally approve the offer there are changes to the purchase price or the closing costs that they will pay. And, usually the bank wants to close ASAP. This is all fine and dandy but if we have to change any of the numbers that are included in the TIL, a new re-disclosure has to be signed and 3 business days starts.
4)If the lender gets the file done early and everyone wants to close early... A new re-disclosure will have to be sent out since less interest days will need to be collected and this effects the TIL. So, this can be signed and 3 business days later you can close early.(because the original one will include the amount of days going off of the REPC (purchase contract).
Do you see the pattern? There are a lot of things that can trigger re-disclosure.
I estimate that borrowers will sign re-disclosed documents at least 3 times before closing. (this is the minimum) The first time will be for the Pre-qual with a TBD address. The second will be once they go under contract and the address and purchase price etc. is established. And thirdly, we will send out a re-disclosure 5 days before closing just to be safe.
So 3 times min. they will re-sign docs (luckily it is only a few docs that need to be re-signed)
I am preparing my borrowers when I sit down with them of how many times they will get to sign things so it is not a surprise. The agents can assist us by letting the buyer know that this is normal and part of the new MDIA law that was effective July 30, 2009.
If we didnt have enough to think about, well there is the HVCC (appraisal) new law that we have to add on top of these deadlines too. That is another entry, another day.
Once again, please let me know if you would like further information and assistance.
Cindee Stone
801-381-3863
www.cindeestone.com
Here is that list that I promised you.
Fees that affect the APR on the Truth in Lending (TIL)
Administration Fee
Closing/Settlement Fee
Courier Fee (Overnight delivery, courier, messenger fees)
Discount Points
E-mail/E-Doc Fee
Final Inspection Fee
Flood Cert Fee, if Life of Loan
Loan Origination Fee
Mortgage Broker Fee
Mortgage Insurance Premium (MIP, PMI, VA Funding Fee)
Payoff Processing Fee
Prepaid Interest (until 1st of following month)
Processing Fee
Reconveyance TRACKING Fee
Tax Service Fee
Underwriting Fee
Wire Fee
Fees that DO NOT affect the APR on the TIL:
Appraisal or Appraisal Waiver Fee
Credit Report
Doc Prep Fee
Endorsements
Hazard/Flood Insurance Premiums
HOA Dues
Reconveyance Fees (Not Tracking Fee)
Recording Fees
Reserves (Taxes and Insurance)
Termite/Pest Inspection Fees
Title Insurance Premium
About The Utah Finance Guru!
- Cindee D. Stone
- Loan Officer Interview Q and A: How long have you been in the mortgage business? I have been in the mortgage industry for over 18 years. I have been very blessed and fortunate to have worked with so many wonderful people! How has the mortgage industry changed since you started, and what would you expect in the future? The mortgage industry and changed so much over the last few years. And, continues to change on a daily basis. It is very important to have a loan officer that has the experience to guide you through the process with success. What can borrowers do to insure a smooth mortgage underwriting process? The most common issue during the loan process is getting all of the documents from the borrowers. It is so different now and so much more is needed. This allows us to see the entire picture and make sure it all goes as smooth as possible. What provides you with the most satisfaction in your job as a Loan Officer? Even though the mortgage industry is harder these days, it will never take away the satisfaction and happiness with assisting someone getting into the home of their dreams! Or, helping a homeowner refinance and save money.
My Family
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