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#1189282 - 05/22/09 04:22 PM MDIA - TIL redisclosure question
Ninky Offline
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Ninky
Joined: Nov 2002
Posts: 357
The redisclosure requirement for the early TIL under MDIA refers to 226.22. I guess in past experience, when a loan has an overdisclosed APR, since no reimbursements apply, we have not considered them in violation. But the commentary actually says that the disclosure is innacurate if out of tolerance either under or over, by the .125 or .25. So for these new redislcosure requirements under MDIA, we need to redisclose during the loan process even if the APR is overdisclosed beyond the tolerance. Correct? (We have only had to provide closing TILs in the past.)

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#1202433 - 06/17/09 03:01 PM Re: MDIA - TIL redisclosure question Ninky
Kathy Brooks Offline
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Kathy Brooks
Joined: Dec 2002
Posts: 95
Compliee, did you get a response on this question? It sounds so simple, yet I too want to be sure re-disclosure is required when APR is overstated cause is seems silly!
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#1202480 - 06/17/09 03:23 PM Re: MDIA - TIL redisclosure question Kathy Brooks
Reads Regs Offline
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#1202537 - 06/17/09 03:58 PM Re: MDIA - TIL redisclosure question Reads Regs
dbrunow Offline
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Joined: Feb 2008
Posts: 28
Here is the applicable section from the article:

"Additionally, the MDIA Rule provides that the annual percentage rate disclosed in the early disclosures must become inaccurate as defined in Regulation Z Section 226.22 to trigger the obligation to provide corrected disclosures. The Board confirms in the preamble to the MDIA Rule that accuracy is determined under the broader regulatory tolerances applicable to the annual percentage rate that are set forth in Regulation Z Section 226.22, and not under the narrower statutory annual percentage rate tolerances (of one-eighth of a percent for regular transactions and one-quarter of a percent for irregular transactions). The tolerances in Section 226.22 include the overstatement tolerance."

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#1202572 - 06/17/09 04:22 PM Re: MDIA - TIL redisclosure question dbrunow
Kathy Brooks Offline
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Kathy Brooks
Joined: Dec 2002
Posts: 95
Thank you all. If I 'get it', we won't have to do an early redisclosure on overstated APRs, but will have to provide a final TIL at closing to correct it.
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#1202882 - 06/17/09 07:25 PM Re: MDIA - TIL redisclosure question Kathy Brooks
Sage Offline
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Joined: Aug 2005
Posts: 914
I want to see this but I can't see where 226.22 makes the tolerance larger. What am I missing?

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#1202910 - 06/17/09 07:40 PM Re: MDIA - TIL redisclosure question Sage
Tigg Offline
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Tigg
Joined: Jan 2008
Posts: 6,389
Looking for My Happy Place....
If your APR is overstated because your finance charge is overstated (i.e., a fee was overstated or your amount financed was overstated) you only have to provide your final TIL at consummation. If, however, the terms of the loan change and you are out of tolerance by the 1/8 or 1/4 on the APR you have to provide the corrected disclosures the 3 business days prior to closing.


Is everyone else on the same page with this?
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