Today's the Big Day!

Effective July 30, 2009, there are new rules regarding Truth in Lending (TIL) disclosures. These rules, which affect all lenders, are contained in the Mortgage Disclosure Improvement Act (MDIA). The MDIA is intended to protect consumers and make it easier for them to understand TIL disclosures. You can look at the rules by visiting the federal reserve printing at http://www.federalreserve.gov/reportforms/formsreview/RegZ_20090519_ffr.pdf

The primary purpose of the Truth in Lending Act (TILA), 15 U.S.C. 1601 etseq., is to promote the informed use of consumer credit by requiring disclosures about its terms and cost. This is the so called 'fine print rule', which attempts to explain all the microscopic caveats on the forms so you know, in plain numbers, what it all means. (From my perspective, this is like taking birthing clasess. You know, but you really don't know!)

The MDIA is likely to cause some delicious delays in the process now, as everyone becomes accustomed to new timetables, new steps leading to the closing table, etc. Until MDIA has been in effect for some period of time, its real impact on lending practices will be muddled by the frustration these new processes and inherent delays will create. However, the good thing to take away from this is that we are scrubbing clean the mess that was made during the heady days of the real estate boon. Once done, and with some necessary fits and starts, the achievement of homeownership will mean something again, the professionals who work in all aspects of our industry will deserve some respect again, and the 'truth' will be rightfully returned to its place in the process.

And that is some good news.