The mortgage business was going well for quite some time. Unfortunately,many people have become delinquent to their payments and most of them were forced to undergo foreclosure because of inflation. As a result, the real estate market flunked and created a domino effect to the nation’s economy. 

And of course, there are also abuses in lending. There are opportunist out there, who finds a way to bury people to more debt more than what they can imagine. They do not care whether you are so much indebted. All they care about is finding money and getting away with the scam. 

To protect people from deception in lending and to educate them about their mortgage deals, the Truth in Lending Act was revised. Changes were made in Regulation Z and these are applicable for loans contracted on or after July 30, 2009. It is important that lenders and consumers pay attention to these new regulatory acts to avoid any delays in closing. 

So what are the changes? The next sections explain it all. 

Timetable Imposed for Delivery of Initial Disclosures 

Initial disclosure, which refer to the Good Faith Estimate, Truth in Lending Statement and other pertinent disclosures, shall be delivered through mail. This should be done within three business days from the application. 

Regulation to Fees Collected

It is said that lenders are not allowed to collect other charges unless the initial disclosures are provided. That which said to be done within 3 business days upon receipt of application. The only upfront fees collected are the ones related in performing a credit investigation. 

Re-Disclosure Practices 

Any lender must provide new disclosures in the event that there are errors as to the information provided for the mortgage. No closing shall be take place unless the corrections are made. It is also said that if changes in the annual percentage rate (APR) occurs, re-disclosure is required. Re-disclosures are only applicable when APR rises or declines by more than .0125 percent. 

Waiting Period for Closing 

No lenders can close the deal until the 7-day waiting period is up, all of which are business days. The waiting period will commence when the borrower has received the initial disclosures. However, the borrower can waive this waiting period in case of emergency. In cases of re-disclosures, another three business days is required before the closing can take place. 

Mandatory Inclusion of this Statement 

“You are not required to complete this agreement merely because you have received these disclosures or signed a loan application.” 

This means you have to right to rescind the contract, if you do not feel comfortable with the deal. 

Many consumers may have not seen the importance of these changes. It is understandable if you are in a hurry to close deals to lessen the cost of escrow. However, these rules give great opportunities for consumers to make compare and contrast various mortgage deals among lenders. Being able to compare and comprehend the information provided could help you make a better decision in picking out the most economical deals for loans and a chance to bail out when things become a little fishy.