When must a residential mortgage originator provide a nonagency disclosure?

The requirement for a residential mortgage originator to provide a nonagency disclosure is crucial for ensuring that borrowers are fully informed about the nature of the mortgage products they are considering, particularly when those products come from lenders that are not part of a government agency. In Minnesota, the correct timeframe for providing this disclosure is within 3 business days of accepting a loan application.

This timing allows borrowers to review the terms, conditions, and differences between agency and nonagency loans while they are still in the process of making informed decisions. By providing the disclosure early on, it helps to prevent any misunderstanding or misrepresentation regarding the loans being offered, fostering transparency in the lending process.

Other options do not align with the regulatory timeline stipulated for such disclosures. Delivering it at closing would be too late for borrowers to make informed decisions based on all available options, while providing it before the loan application submission or within 5 business days does not comply with the specific 3-business-day requirement set forth in the regulations governing mortgage lending in Minnesota.