I'm taking a break this week from blogging and work.  I'll be back to the mortgage grindstone on Monday, August 24, 2009 like a bright and shiny new penny.   While I'm taking some time off, I thought I'd repost some of my articles.   You can read this original post at Rain City Guide.

In an early post, Ardell wrote about the significance of a buyer being able to close quickly…new regulations may put a damper on that.   With mortgage applications taken after July 30, 2009, waiting periods will go into effect with regards to when and how disclosure forms are provided to the consumer.   The Mortgage Disclosure Improvement Act (MDIA), which modifies the Truth in Lending Act (TILA), was originally going to become effective on October 1, 2009, however the effective date was moved up two months which may catch some real estate professionals by surprise.

Here are some of the details:

Good Faith Estimate and Truth in Lending Disclosures….required waiting periods.

Under MDIA, early disclosures are required for "any extension of credit secured by the dwelling of the consumer."    Three business days from application, the consumer must receive an initial Good Faith Estimate and Truth in Lending (unless the borrower is denied at application).   

The earliest a transaction can possibly close is seven days after the initial disclosures have been issued by the lender (delivered in person, mailed, emailed, etc.).    This is assuming no re-disclosure is required.

Re-disclosure (waiting periods after the early disclosure and corrected disclosures) of the GFE/TIL are triggered if the fees and charges are more than 10%; if the APR is more than 0.125% or a change in loan terms.   Three business days must pass in the event of re-disclosure.   Re-disclosing is nothing new, it typically happened at closing–this will no longer be acceptable.    Mortgage originators "should compare the APR at consummation with the APR in the most recently provided corrected disclosures (not the first set of disclosures provided) to determine whether the creditor must provide another set of corrected disclosures".   Double check those APRs prior to doc!

From MortgageDaily.com:

"The Commentary added by the MDIA Rule expressly provides that both the seven-business-day and three-business-day waiting periods must expire for consummation to occur.  The seven-business-day waiting  period begins when the early disclosures are delivered to the consumer or placed in the mail, and not when the consumer receives the disclosures.  The three-business-day waiting periods begin when the consumer actually receives or is deemed to receive the corrected disclosures.  If corrected disclosures are mailed, the consumer is deemed to receive the disclosures three business days after mailing.  If a creditor delivers corrected disclosures via email or by a courier other than the postal service, the creditor may rely on either proof of actual receipt or the mailing rule for purposes of determining when the three-business-day waiting period begins to run."

Consumers have the right to waive or shorten the MDIA if "a consumer determines that an extension of credit is needed to meet a bona fide perosnal financial emergency".  

No monies may be collected from the borrower with exception to a "bona fide and reasonable" credit report fee until they receive the initial disclosures.   This may cause a delay of when an appraisal is ordered.  Most lenders require an upfront deposit to cover the cost of the appraisal.    The collection of fees rule may also cause potential issues if a borrower is doing a certain type of lock (some with float down or extended lock periods require an upfront deposit).   NOTE:  HVCC requires the borrower receive a copy of the appraisal at least three days prior to closing.

Tim Kane can attest that there is nothing worse than a borrower learning at signing their final loan papers that the fees are significantly higher than what was originally disclosed.  I'd like to think that all mortgage originators redisclosed WHEN modifications to the transaction/fees take place…obviously, this has not been the case.  

DFI covers MDIA here. 

Re-disclosures could become a "holy hand grenade" to quick closings.

Effective today, recording fees are going up statewide due an increase with the homeless housing fee from $10 per recorded document to $30 per HB 2331.

Recording your Deed of Trust or Deed in the State of Washington now cost $20 more each.

Hat tip to The Talon Group.

I'm wondering if you have successfully registered with the Nationwide Mortgage Licensing System?  Please comment below and let me know.

I registered at 9:00 pm on October 1, 2008 and DFI is telling me that they're classifying my registration effective October 2, 2008 (one day past the deadline)…I don't recall seeing any information about effective hours for registration–just the date.

I'm betting that we have many local LO's who have not yet taken the steps necessary to originate mortgages in Washington State in 2009–just over a month away.

The NMLS site is…well I can't think of any pleasant ways to describe it–it seems very unorganized and unclear.  Plus the buttons/links are not easy to find.  My advice to you is to not delay any further.  If you think you've registered, you may want to visit the site to verify and to be sure that you have "renewed"  your license for 2009.  I know some are hoping that there will be an extension granted for loan originators…but I certainly wouldn't hold my breath.

Good luck!  I'd love to hear from you via commenting below.

Check out my related post at Rain City Guide where I interview Jillayne Schlicke about The SAFE Act.

This from the Seattle PI:

Yes: Jim McDermott. Norm Dicks. Adam Smith. Rick Larsen. Brian Baird (All Democrats).

No: Dave Reichert. Cathy McMorris Rodgers. Doc Hastings (All Republicans). Jay Inslee (Democrat).

Elections are just weeks away.  NBC is reporting that House members in close races tended to vote no on this bailout.   For the record, here are the results from the 2006 elections:

District 1: Jay Inslee elected with 67.8% of the vote

District 2:  Rick Larsen ~ 64.16%

District 3: Brian Baird ~ 63.15%

District 4: Doc Hastings ~ 59.88%

District 5: Cathy McMorris Rodgers ~ 56.11%

District 6:  Norm Dicks ~ 70.6%

District 7: Jim McDermott ~ 79.16%

District 8: Dave Reichert ~ 51.46%

District 9: Adam Smith ~ 65.72%

House members who voted no to the bailout were elected by an average percentage of 58.81% (take out Inslee and the average drops to a narrow 55.8%).

Washington State House members supporting this bailout were elected by an average 68.5% by their constituents.

By the way, you have just a couple days left to become a registered voter, if you are not all ready, for the upcoming election.

The passage of HR 3221 has made many changes effective October 1, 2008.   Here are just a few that will officially go into effect in 20 days:

FHA Mortgage Insurance is Increasing

Down Payment Assistance Programs will be gone

You have until the end of this year to take advantage of the higher conforming-jumbo and FHA-jumbo loan limits.   Effective January 1, 2009, they will be reduced (from the passage of HR 3221).

And if you have not owned a home over the past 36 months, you have until the first half of 2009 to take advantage of the first time home buyers tax credit (interest free loan).

Is HR 3221 effecting you for better or worse?  I’d love to hear how.