융자지식 244-APR Accuracy and Redisclosure
APR Accuracy and Redisclosure
According to Regulation Z, the annual percentage rate is generally considered accurate if it does not
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vary above or below the APR initially disclosed by more than:
• 1/8% (.125) for a regular transaction (30-year fixed/Traditional Mortgage)
• 1/4% (.25) for an irregular transaction (Not a 30-year fixed/Non-traditional mortgage)
An irregular transaction is defined as one that includes one or more of the following features:
• Multiple advances
• Irregular payment periods
• Irregular payment amounts (other than an irregular first period or irregular first and final
payment)
If a change renders the APR inaccurate prior to loan consummation, TILA requires that the borrower
be given a corrected disclosure of all terms.
• The consumer must receive the corrected Closing Disclosure no later than three (3) days prior
to loan consummation or the corrected Loan Estimate no later than four (4) business days
prior to loan consummation.
• If the corrected disclosures are mailed or delivered by some method other than in person, the
consumer is considered to have received them three (3) business days after they were mailed.
A borrower may be able to waive the waiting periods if there is a bona fide personal financial
emergency (lender determines if it’s a valid emergency). Also, remember that consumers are not
required to continue with the loan during these waiting periods simply because the creditor provided
these disclosures.
2.23 The Mortgage Disclosure Improvement Act (MDIA)
The Mortgage Disclosure Improvement Act (MDIA) states that:
▪ Initial disclosures are required within three (3) business days of receipt of completed
application.
▪ Earliest consummation is on the 7th business day after disclosures delivered/mailed.
▪ If redisclosure is required – consumer must receive corrected disclosure at least 3 business
days before loan can be consummated.
Example 1: The creditor takes an application for a fixed rate loan on Tuesday, June 1 and mails the
Loan Estimate the next day, Wednesday, June 2. The earliest the loan can close is the following
Thursday, June 10, the seventh business day after mailing the initial disclosure (assuming no legal
federal holidays occur during the waiting period).
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