MDIA/TILA Disclosure Checks in ConformX

By Dave Platt, Director of Engineering and Technology

The Mortgage Disclosure Improvement Act (MDIA) made several changes to the Truth in Lending Act (TILA) that became effective on July 30, 2009.  Some of the biggest compliance challenges associated with these changes are complying with the new tolerance and waiting period requirements.  A mortgage loan cannot be closed until seven days following the mailing or delivery of initial disclosures.  If the APR on the early disclosure is under-disclosed by more than 1/8 of a percent and the finance charge is under-disclosed more than $100.00, the lender must give revised TILA disclosures to the borrower.  The borrower must receive these revised disclosures at least three days prior to closing.  In order to help our customers comply with these new regulations DocuTech has implemented some new data integrity checks into ConformX.

In ConformX, upon reaching the Data Completion screen, the user will be prompted with five new fields for data entry in a section called TILA Disclosure.  These fields consist of Early TIL Sent on Date, Latest Disclosed APR, Latest Disclosed Finance Charge, Redisclosed TIL Mailed on Date, and Redisclosed TIL Accepted by Borrower Date, as shown below.

Based off of data entered into these five fields, ConformX will perform up to five data integrity checks to ensure that our clients are meeting the new MDIA requirements.  First, if the processor enters a value in the Early TIL Sent on Date prompt, ConformX will compare this date to the closing date on the current loan to make sure that has been at least seven days since the initial early TIL disclosure were sent.  If this criterion is not met, then the following data integrity warning will be displayed to the user.

If the processor enters a value for both Latest Disclosed APR and Latest Disclosed Finance Charge prompts, then ConformX will compare these values to the current APR and current finance charge on the current loan to make sure that the APR didn’t increase by more than 1/8% and that the finance charges didn’t increase by more than $100.00.  If both of these conditions are violated then the TIL must be redisclosed to the borrower and the following data integrity check warning is displayed to the user.

As an additional failsafe, if the processor populates the Latest Disclosed APR prompt but not the Latest Disclose Finance Charge prompt, then a check will be performed on the APR individually.  If the APR in this case increases by more than 1/8%, then the user will be given the following warning to let them know that they need to populate the Latest Disclosed Finance Charge prompt to accurately determine whether or not the TIL must be redisclosed to the borrower.

If the processor enters a value in the Redisclosed TIL Mailed on Date prompt, ConformX will compare this date to the closing date on the current loan to make sure that has been at least six days since the redisclosed TIL was mailed to the borrower.  If this criterion is not met, then the following data integrity warning will be displayed to the user

Last, if the processor enters a value in the Redisclosed TIL Accepted by Borrower Date prompt, ConformX will compare this date to the closing date on the current loan to make sure that has been at least three days since the redisclosed TIL was received and/or accepted by the borrower.  If this criterion is not met, then the following data integrity warning will be displayed to the user.

DocuTech is fully committed to maintaining compliance on these important updates.  Our goal is to keep our clients, partners, and friends in the industry up to date continually on such changes. Call your client services representative at 800.497.3584 option 3 today to have these enhancements enabled. We are here to answer any questions you may have. Thanks for counting on us!