What is the main purpose of the Mortgage Disclosure Improvement Act (MDIA)?

The main purpose of the Mortgage Disclosure Improvement Act (MDIA) is to enhance consumer protection by improving disclosure practices. The MDIA was enacted as part of the broader Housing and Economic Recovery Act of 2008 and aims to ensure that consumers receive clear and timely information about mortgage loans. It requires lenders to provide borrowers with certain disclosures, such as the Good Faith Estimate (GFE) and the Truth in Lending (TIL) statement, within specified time frames. This transparency helps borrowers make informed decisions and understand the terms and costs associated with their mortgage loans, thereby protecting them from predatory lending practices and unexpected fees.

While promoting home ownership among low-income families, reducing the overall cost of mortgage loans, and simplifying the mortgage application process address important aspects of the housing market, they are not the primary focus of the MDIA. The act specifically targets the improvement of disclosure practices, which directly relates to enhancing consumer protection in the mortgage lending process.