New Truth in Lending Rules Start 30 July 2009

If your buying a home or selling for that matter.
You should be aware of the new Truth in Lending Rules that start at the end of July
(Click on the title link to read the full 17 page section of the Federal Register) published the follow:
NOTE: Remember these rules only apply to loan applications filed on or after July 30,2009. There is some talk that the closing of a home will be affected by the new rules. Really only time will tell but, I can’t imagine closings getting any more delayed then they are right now with the HVCC rules on appraisals.

Revised TILA Disclosure Requirements Take Effect on July 30, 2009
Lenders will be subject to new disclosure requirements for mortgage loans under the
Federal Reserve Board Truth in Lending Regulation (Reg Z).
The new requirements apply to loan applications filed on or after July 30, 2009 (about two
months earlier than originally planned).
The new rules are complex and compliance will be a challenge for lenders.
REALTORS® will want to learn the basics so they can advise clients of potential delays and
the new procedures. Here are key highlights of the changes:
• 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
• The closing may not take place until expiration of a 7 day waiting period after the
consumer receives the early disclosure.
• Consumers may shorten or waive the 3‐day and/or 7‐day waiting periods for a “bona
fide personal financial emergency,” but only after receiving an accurate TILA disclosure.
In the final rule’s preamble, the Fed stated that it “believes waivers should not be used
routinely to expedite consummation for reasons of convenience.” The Fed decided not
to insulate lenders from liability even where a consumer modifies or waives the waiting
• If the annual percentage rate (APR) changes 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. – ($FILE/RegZ.pdf)

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