History and future

History and future Disclaimer 1. 2. 3. The laws discussed in this presentation are, like most real estate laws, constantly amended and interpreted through legal and social challenges. You are encouraged to review the laws and draw your own conclusions through independent research. The instructor is not an attorney, and the information provided is not to be taken as legal advice The instructor is absolutely not responsible for the current legislative environment or the intelligence level of any government body Goals for thisWebinar  Review the history behind the Federal      Truth in Lending Act (TILA) Review TILA Disclosures Address current legislative environment Analyze the Mortgage Disclosure Improvement Act New TILA and the real world application to today’s market Q &A Question…  What is the first thing that comes to mind when you hear “Truth in Lending Act?” Advertising!!! TILA History  Enacted by Congress in 1968 as a consumer protection Act  Implemented by the Federal Reserve Board as Regulation Z (Reg Z) and Regulation M  12 C. F. R. Part 226 in the code of Federal Regulations  Amended June 2008 with final rule implementation June 30, 2009 Past Amendments          1970 –Prohibited unsolicited credit cards 1974 – Fair Credit Billing Act 1976 – Consumer Leasing Act 1980 – Truth in Lending Simplification and Reform Act 1988 – Charge Card Act 1988 – Home Equity Loan Consumer Protection Act 1988 – Amended Adjustable rate disclosure requirements 1995 Home Ownership and Equity Protection Act (HOEPA) More in the works History of thisAmendment  MDIA law passed through 3221 “Emergency Economic Stabilization Act of 2008”  Proposed and final rule released this year  Implementation due by July 30, 2009 Disclosures underTILA  Truth in Lending  HELOC Disclosure  CHARM  Right to Rescind LegislativeOverview  HVCC  RESPA  2 TILA amendments  Licensing with the SAFE Act  Predatory lending legislation  Etc… The Major Issues CONSUMMATION  Consummation means the time that a consumer becomes contractually obligated on a credit transaction.  Reg Z  Industry interpretation generally refers to signing of the loan documents. Covered PropertyTypes  Owner occupied and second homes count  Wording: “Further, comment 3(a)-3 states that credit extended to acquire, improve, or maintain rental property that is not owneroccupied (that is, in which the owner does not expect to live for more than fourteen days during the coming year) is deemed to be for business purposes. The Board believes this guidance is sufficient to determine whether a transaction is subject to TILA.” Covered LoanTypes  Everything but a HELOC  HELOC guidance to be released soon Early Disclosures  3 business days for TIL and GFE for creditors  Only a credit report fee may be received prior to the GFE and TIL being delivered  Borrower withdrawing within 3 days negates requirement NoQuickSigning  A loan may only sign on the 7th business day or later Late Disclosures  Changes re-disclosed with a 3-day cooling off period  No specific guidance on up or down changes!  Confusion around “borrower receipt of disclosures!” BorrowerWaiver  A borrower may waive their 3 and 7 day waiting periods upon “personal financial emergency”  “To modify or waive a waiting period, the consumer shall give the creditor a dated written statement that describes the emergency, specifically modifies or waives the waiting period, and bears the signature of all the consumers who are primarily liable on the legal obligation. Printed forms for this purpose are prohibited. “ Definition of “Business Days”  General: “a day on which the creditor's offices are open to the public for carrying on substantially all of its business functions.”  Precise: “all calendar days except Sundays and specified Federal legal public holidays”  NewYear's Day, the Birthday of Martin Luther King, Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day. Business days applied  General:  3 day early disclosures  Precise:  3 day cooling off period  7 day consummation period NewTILA DisclosureStatement  “You are not required to complete this agreement merely because you have received these disclosures or signed a loan application.”