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H.R. 3221 –DIVISION B – TITLE V – MORTGAGE DISCLOSURE IMPROVEMENT
ACT
GENERAL – This Title amends the Truth in Lending Act (TILA) to expand mortgage loans
subject to early disclosures, requires other TILA disclosures be made not later than seven days
before closing, requires receipt of early disclosures before fees are collected, requires disclosure
of certain additional information, and doubles potential civil monetary penalties. Several of
these provisions codify portions of the TILA/HOEPA rulemaking finalized by the Federal
Reserve on July 14, 2009.
TIMING – TILA is amended to expand the mortgage loans subject to early disclosures within
three days of application. Other TILA disclosures are required seven days before closing and any
correction of an APR must be made three days before closing.
ADDITIONAL REQUIRED DISCOSURES
The following disclosure must be made, that ―You are not required to complete this
agreement merely because you have received these disclosures or signed a loan
application.‖
For variable rate mortgages, disclosures must indicate that that payments will vary based
on rate changes, provide examples of payment changes that may occur based on changes
in the rates specified in the contract, and indicate the maximum interest rate and payment
allowed under the contract.
FEE COLLETION – No fee may be collected, with the exception of a reasonable fee for a
credit report, prior to receipt by the consumer of required early TILA disclosures.
DISCLOSURE TIMING WAIVERS – The consumer may waive or modify the timing
requirements for disclosures provided there is a ‗bona fide personal emergency‘ as defined by the
Federal Reserve and the consumer attests to the emergency in a written statement.
CIVIL MONETARY PENALITIES – Civil monetary penalties under TILA are doubled to not
less than $400 or greater than $4,000.
EFFECTIVE DATES – The effective date for provisions in Title V is 12 months after
enactment, except that the effective date for new disclosures concerning variable rates mortgages
is the earlier of the compliance date established by regulation or 30 months after enactment.
AMERICAN BANKERS ASSOCIATION 18