Housing and Economic Recovery Act(H.E.R.A.)

The recent establishment of H.E.R.A included amendments to the traditional Truth-in-Lending disclosure (TIL), which notifies borrowers of the terms and fees included in their mortgage loan. These new rules are known as the Mortgage Disclosure Improvement Act of 2008 (MDIA). Immediate changes you need to know about MDIA:


• MDIA implements a 3-7-3 rule that creates new timing and waiting requirements with regard to the issuing of Truth-in-Lending disclosures and when closing can occur.


a). 3-days: Upon the taking or receipt of a loan application, a lender must provide an initial Truth In Lending(TIL) to the borrower(s) within 3 business days of the application (no change to current requirement).

b). 7-days: This waiting period requires a lender to wait until the 7th business day following the delivery or mailing of the initial TIL to the borrower(s) before a creditor may close any loan.

c). 3-days: Impose an additional 3 day waiting period before a loan may close in any instance in which the Truth In Lending(TIL) is outside of regulatory tolerances (ie: for regular or fixed rate loans more than .125% and for irregular loans more than .25%).



Knowing the new rules included in MDIA are important in establishing realistic timelines with your clients as to how fast a real estate transaction can occur.