Interthinx has announced that its PredProtect Compliance Suite now performs Mortgage Disclosure Improvement Act (MDIA) calculations that automatically determine when new disclosures are required and whether the timing of the disclosures meets statutory requirements. PredProtect compares the annual percentage rate (APR) at application to the most recently disclosed APR, applying a tolerance of one-eighth of one percent. The system then provides an “earliest closing date” calculation to ensure that the timing for initial or re-disclosure follows the new requirements. Users are automatically notified when a loan is out of compliance.
MDIA is a federal law that is part of the Housing and Economic Recovery Act of 2008 (HERA). MDIA requires, among other things, that lenders wait seven days after the initial disclosure is provided before closing a home loan and an additional period any time the APR changes by more than one-eighth of one percent and re-disclosure is required. The law then requires an additional cooling-off period before the loan can be closed. This sequence is frequently referred to as the 3-7-3 Rule.
“The time is right for lenders to deploy new, practical technology and ready themselves for more regulation to come. It seems like there’s never a good time to implement change, but now it’s a matter of keeping up with tough new regulation and survival,” said Mike Zwerner, senior vice president of business development for Interthinx. “Another way to look at the current environment is to recognize the industry is in a state of rebuilding consumer trust and brand confidence. Hidden costs or errors add up to lost opportunity. The new MDIA test in PredProtect provides lenders with a simple approach to compliance, helps avoid costly errors, and mitigates reputational risk with inexpensive, fast automation.”
For more information, visit www.interthinx.com.