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Effective Date of MLA: "Check" DOD Database

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Our bank has several home improvement applications that have been approved prior to 10-3-16 but they have not funded yet because we do not ​disburse the funds until all the improvements are completed. In cases like these, must we run an "MLA check" against the DOD database?

The key is not when the loan funds. It is when the customer becomes obligated on the note. If the loan was consummated (not necessarily funded) prior to 10/3/16, then no MLA check was needed. But if the loan will consummate on or after 10/3 then an MLA check needs to be performed. But you can't do it retroactively, so if you had some that consummated between 10/3 and today and you didn't do the check, there is not a way to fix that.

First published on 03/12/2017

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