The Mortgage Disclosure Improvement Act (MDIA) amendments to Regulation Z of the Truth-in-Lending Act (TILA) became effective on July 30, 2009. Changes include:
► The 3/7/3 Rule: With respect to residential mortgage transactions subject to RESPA, a creditor must make good faith estimates of the disclosures required under Regulation Z before consummation and deliver or place them in the mail not later than 3 business days after the creditor receives the consumer's written application. The creditor must deliver or place in the mail the good faith estimates required by 12 CFR 226.19(a)(1)(i) not later than the seventh business day before consummation of the transaction. If the annual percentage rate disclosed under 12 CFR 226.19(a)(1)(i) becomes inaccurate by more than .125 percent, the creditor must provide corrected disclosures with all of the changed terms. The consumer must receive the corrected disclosures no later than three (3) business days before consummation. If the corrected disclosures are mailed to the consumer or delivered to the consumer by means other than delivery in person, the consumer is deemed to have received the corrected disclosures three business days after they are mailed or delivered.
► Imposition of fees: With the exception of a bona fide, reasonable fee for obtaining a consumer's credit history, neither a creditor nor any other person may impose a fee on a consumer in connection with the consumer's application for a mortgage transaction subject to RESPA before the consumer has received the initial Truth in Lending disclosure. If the disclosures are mailed to the consumer, the consumer is considered to have received them three (3) business days after they are mailed.
► Borrower’s Right to Cancel: The borrower has a right to cancel the transaction. To ensure that the borrower is aware of this right, the disclosures must also contain the following statement: "You are not required to complete this agreement merely because you have received these disclosures or signed a loan application."