The Mortgage Disclosure Improvement Act (“MDIA”) is a federal law enacted in 2008 as an amendment to the Truth in Lending Act (“TILA”) to strengthen consumer protections and improve the timing and accuracy of mortgage disclosures. MDIA was designed to ensure that borrowers receive meaningful loan cost information early enough in the mortgage process to make informed decisions before becoming contractually obligated on a loan. Among its key requirements, MDIA mandates that lenders provide early TILA disclosures within specific timeframes after receiving a mortgage application and requires waiting periods before a mortgage loan may close. The law also requires redisclosure and additional waiting periods if certain material loan terms—such as the annual percentage rate (“APR”)—change beyond allowable tolerances before closing.
For Mortgage Loan Originators (“MLOs”), MDIA is significant because it directly affects the timing, delivery, and accuracy of mortgage disclosures during the origination process. MLOs must carefully manage application intake, disclosure delivery deadlines, and changes to loan terms to ensure compliance with mandatory waiting periods and redisclosure requirements. Failure to comply with MDIA can delay loan closings, create regulatory violations, and expose lenders to penalties and borrower claims. MDIA reinforces the broader consumer protection goals of TILA and Regulation Z by promoting transparency and giving borrowers adequate time to review and understand the true costs and terms of their mortgage loans before closing.
