Beginning on Thursday, July 30, 2009, the Truth in Lending Act requirements regarding initial and final disclosures to borrowers, the timing of when fees can be charged and when closings may occur will become effective. These new regulations lengthen the time needed to close loans in order to ensure that borrowers have enough time to consider their options and feel comfortable moving forward with a loan. The factors that may impact the closing date of a loan include:

  • Closing may not occur until 7 business days after initial disclosures are sent to the borrower.
  • Upfront fees may not be collected from the borrower until initial disclosures are delivered by the borrower. Therefore, appraisals may not be ordered until initial disclosures sent by the lender are delivered to the borrower.
  • An increase in Annual Percentage Rate (APR) by more than 0.125% requires the Truth in Lending Disclosure to be revised and delivered to the borrower 3 business days before closing.

Business days include Monday through Saturday and exclude Sundays and holidays.

Disclosures are considered “delivered” 3 business days after mailing.

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Sample Timeline

Sun Mon Tue Wed Thu Fri Sat
30Initial Registration is completed and Initial Disclosures are generated. 31 Initial Disclosures are mailed. 1 Initial Disclosures Day 1
2 3Initial Disclosures Day 2 4Initial Disclosures Day 3 (Delivered) 5Initial Disclosures Day 4
Earliest date appraisal can be ordered.
6Initial Disclosures Day 5
Loan is registered and prescreened complete.
7Initial Disclosures Day 6
Loan is underwritten and approved.
8Initial Disclosures Day 7Earliest date loan can close.
9 10Change in loan terms requested by broker and updated by branch requiring re-disclosures to be generated. 11Re-disclosures are mailed. 12Re-disclosures Mailing Day 1 13Re-disclosures Mailing Day 2 14Re-disclosures Mailing Day 3 (Delivered) 15Re-disclosures Waiting Period Day 1
16 17Re-disclosures Waiting Period Day 2 18Re-disclosures Waiting Period Day 3
Earliest date loan can sign/close due to the changes made on the 10th.
19 20 21 22