Key Provisions:
1. The lender must provide or mail an initial TIL disclosure within 3 days after receiving the customer's application.
2. The lender must deliver or mail a TIL disclosure at least 7 business days before closing.
3. A final, accurate TIL must always be provided at closing.
4. If the annual percentage rate (APR) increases more than 0.125%, the borrower must receive a revised TIL at least 3 business days before closing.
Why might the APR increase?
- Interest rate changes
- Loan amount increases
- Type of loan changes
- Fees charged increases
- Loan-to-value (LTV) increases
Things to consider:
When writing a purchase contract, remember that the earliest possible day that closing can occur is 7 business days after the lender issues the initial TIL.
Set customer expectations about closing timelines and, whenever possible, plan for a closing date that provides enough time to accommodate the additional waiting period required if the APR increases by more than 0.125%.
Examples/Scenarios:
Example #1:
8/3/09: Application taken
8/4/09: Initial TIL delivered
8/12/09: EARLIEST POSSIBLE CLOSING DATE
Example #2:
8/3/09: Application take
8/4/09: Initial TIL delivered
8/10/09: Customer locks rate, which increases the APR by more than .125%; revised TIL sent to customer.
8/13/09: Customer receives new TIL
8/17/09: EARLIEST POSSIBLE CLOSING DATE
Note: These examples are assuming Coldwell Banker Home Loans/PHH is the lender. It is entirely possible that other lenders will interpret the MDIA language differently.
