From: Fowler Williams, CMB President, Crescent Mortgage Company To: Our National Network of Community Lending Partners RE: TRID Policy Update CD 2.

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1 Closing Process Motion TILA RESPA Integrated Disclosure Closing Disclosure 2.0 From: Fowler Williams, CMB President, To: Our National Network of Community Lending Partners RE: TRID Policy Update CD 2.0 Dear Valued Clients; Since the promulgation of the TILA-RESPA Integrated Disclosure Rule, has been involved and advocating for our industry at the highest levels. The Consumer Financial Protection Bureau (CFPB), while being present and communicative with industry participants, has failed to clarify or make technical corrections asked for by our industry. In fact, during a December speech at the Consumer Federation of America conference, the bureau s director compared the criticism of the rule and warnings from the industry to that of the scare, stating it was all for nothing and homeownership is actually up since the rule went in to place. We disagree and hope to continue engaging in meaningful dialogue with the bureau. This indecision and inaction has led to multiple interpretations, delays for consumers, and additional costs and confusion for all lenders and industry participants that will trickle down and impact the costs and availability of credit to creditworthy consumers. We promise to continue our company's and our industry's advocacy efforts to ensure a clear path to homeownership and mortgage finance. While Crescent has been involved with these new rules for over a year and a half, we have certainly learned a lot since its October 2015 implementation. As such, we are making several changes to our policies and procedures effective immediately to ensure a smoother process for delivery and receipt of the Closing Disclosure, and proper expectations for a closing timeline. Many of the issues or delays we have seen are due to not receiving accurate information until the loan is ready to close. TRID, frankly, doesn t work that way. We need to ensure we receive accurate and complete information earlier in the process to offer you, and your borrowers, the best and most timely service possible. Therefore, we are making changes to policy and procedure to ensure accurate fees and information needed for Closing Disclosure Issuance. While we are integrating these policies we will work with you to ensure that current loans are not delayed if new requested items are added to the loan approval. Should you have any questions, please contact your Account Executive or assigned loan manager. The following page will list a summary of process changes designed to expedite closing and meet estimated closing dates. Subsequent pages give instruction, direction and all applicable details Peachtree Dunwoody Road NE Building C Suite 250 Atlanta, GA /13/20161/13/2016

2 Closing Process Motion Closing Disclosure Process 2.0 Summary E-Sign: Crescent Mortgage provides, free of charge, E-Sign secure delivery of loan disclosures to our partners. This has proven to be a huge benefit for tracking delivery and receipt while expediting the timing for closing. However, our E-Sign provider did not meet our expectations. Therefore, we are pleased to announce a partnership with one of the worlds most experienced E-Sign vendors, DocuSign. We will provide separate instruction on this new and expanded functionality that will be a more convenient and accurate process for all involved including: Borrowers do not need to create a separate user name and password. Documents can/should be reviewed by customer prior to sending for signature versus current vendor that generates and sends documents simultaneously. Faster polling times to send and receive information. CMC controls the data versus the E-Sign vendor. Reminder s sent daily on documents not viewed / signed to ensure follow up and a continuous path to the expected closing date. Documentation of new E-Sign process available Friday, Jan 15. Loans currently in process will have the choice of continuing with current E-sign provider or switching to new provider. Upcoming E-Sign webinars: Thu, Jan 14, :00 PM - 2:30 PM EST, Fri, Jan 15, :00 PM - 2:30 PM EST, Tue, Jan 19, :00 PM - 1:30 PM EST (click links for information) At Initial Underwriting Approval: A pre-closing Package will be automatically generated for you to distribute to your selected settlement agent. This will contain state, program, and property specific documents that would need to be recorded for the settlement agent to get an accurate page count based on the best information at that time. The last page of this package will be the Settlement Agent Fee Collaboration form. You can generate this package yourself at any time after initial loan approval on the Closing Request screen. The settlement agent must complete the Settlement Agent Fee Collaboration form, return the document to you, for you to upload to CMC. An underwriting condition will be added and cleared once we have received all needed information from you. Click for Example Settlement Agent Fee Collaboration form. Purchase Transactions: A purchase transaction contact worksheet, or all applicable fields in Motion must be completed. We have encountered numerous delays in receiving this information that is required on the closing disclosure. Click for Example Form. Closing Request: Clear, concise information on what information is needed to be able to submit your closing request. These items are now listed on the underwriting approval document as well as multiple locations within Motion. On the Closing Request Screen, you can now generate a Sample CD to review prior to submitting closing request. A new document Closing Request Fee Reconciliation can be generated and must be completed at time of closing disclosure. We believe this will provide a simple way for you to request changes be made to fees or other information contained on the Closing Disclosure. Click for Example of Closing Request Fee Reconciliation. Click for Closing Request instruction Peachtree Dunwoody Road NE Building C Suite 250 Atlanta, GA /13/20161/13/2016

3 Closing Disclosure Process Motion Closing Disclosure Process Version 2.0 Submit Pre-Closing Package to your settlement agent Initial Approval Upload completed Settlement Agent Fee Collaboration Purchase transactions: Complete and upload Purchase Transaction Contact Worksheet Closing Request Review and submit all required items for closing request submission Generate and review Sample CD Complete and upload Closing Request Fee Reconciliation Submit Closing Request CD Issuance & Closing Crescent reconciles all fees from closing request, and will return a final Sample CD for your review Crescent will confirm the to be delivered date and delivery method for CD Crescent will deliver the CD to borrower(s) Once borrower receipt has been verified and loan reaches Approved for Docs status, Crescent will generate and deliver the Closing Package and Closing CD to settlement agent 6600 Peachtree Dunwoody Rd. NE, 600 Embassy Row, Suite 650, Atlanta, GA /9/20161/9/2016

4 KBYO Closing Request Required Items Purchase Transaction Contact Information for Closing Disclosure Certain information is needed to complete the contact section of the Closing Disclosure (CD) on purchase transactions. To ensure this information is completed, an underwriting condition will be added to purchase transactions when we do not have the following information for CD preparation: Condition: FI998 Please complete Purchase Transaction Contact Information for CMC to correctly disclose the Closing Disclosure Needed Information: Buyer and Seller Agent: Company Name Address State License ID Agent Name Agent State License ID Phone Seller: Seller full name Seller mailing address (post consummation) You can submit this information to Crescent in several ways. 1. Complete the information in Motion / Pre-Closing and Closing tab / Purchase Transaction Parties screen. 2. Complete blank form and submit to Crescent. Click HERE for Document Link 3. Generate Purchase Transaction Contact Information form in Motion. Click Purchase Transaction Contact Info button located in the following screens: Home / Pathway to closing link Purchase Transaction Contact Screen Generate Documents Screen 6600 Peachtree Dunwoody Rd NE, 600 Embassy Row, Atlanta, GA /13/20161/13/2016

5 Purchase Transaction Contact Information Loan Number: Borrower(s): Buyers Agent Company Name Address Company State License ID Agent Name Agent State License ID Phone Sellers Agent Company Name Address Company State License ID Agent Name Agent State License ID Phone Seller Information Seller Name Seller Mailing Address *MCTRIDCADD*

6 Settlement Agent Collaboration Initial Approval Pre-Closing Package Getting correct and timely fee collaboration from settlement agents has proven more difficult than we had imagined. Frankly, many did not conform their process to meet the needs of these new rules and do not finalize fees until closer to, or at closing. CMC had created a simple process where we automatically sent a request to the chosen settlement agent to review, approve, or edit settlement fees on our website. To say that many of the settlement agents have been less than responsive to us is an understatement. Therefore, we are enacting the following changes to our procedures: A document package called Pre-Closing Package will be available through motion once the loan has received its initial approval from CMC. This package will serve several purposes. It will contain sample documents based on state, loan program, and property type so that the settlement agent will have an accurate count of documents for recording purposes so they can quote more accurate fees. This package will also contain a Settlement Agent Collaboration Worksheet (Click HERE for example). This worksheet contains all needed information from the settlement agent to ensure the generation of an accurate Closing Disclosure. This package should be generated by you, and distributed to your contact at the office of the settlement agent. A prior to docs underwriting condition will be added to loans: Condition: FI996 - Settlement Agent Fee Collaboration Worksheet to be completed and returned to Crescent Mortgage. Once Crescent has received and completed review of the Settlement Agent Collaboration Worksheet, and there is no outstanding / missing information, the condition will be cleared. When should you generate this document and send to your settlement agent? We make this package available to you after the initial loan approval. By doing this, we can make sure the correct information is input to derive the correct amount of recordable documents. It is not required that you generate this package at the time of initial loan approval, however, we believe that is the soonest it should be sent to settlement agents. How do I generate the package? This button is made available on the Home Screen after clicking the initial loan approval simply click the button and the document will be generated. popup. After Once the settlement agent has completed the document, please upload to attachments in Motion. Once all needed items are received, the condition will be cleared Peachtree Dunwoody Rd. NE, 600 Embassy Row, Suite 650, Atlanta, GA com 1/13/20161/13/2016

7 Settlement Agent Collaboration Worksheet Motion Instructions - This form must be completed by selected settlement agent. Please return to the originating institution for them to deliver to CMC. Borrower(s) Title Only Borrower(s) Loan Number Sett. Agent File ID# Closing Date Funding Date Main Contact at Settlement Agent Name Phone Company and Individual Contact / License Information for CD Seller Name(s) if Applicable Company Name Company State License ID Agent Name (individual) Individual State License ID Phone Settlement Agent Listing Agent Buyers Agent Section B and C: Services Borrower(s) Did/ Didn t Shop For (relating to settlement title charges) (attach additional pages if needed) Description Amount Description Amount Section E: Taxes and Other Government Fees Description Payee for CD Borrower Paid (if applicable) Seller Paid (if applicable) Rec. Deed $ Mortgage $ Transfer Tax Section F: Pre -Paid Current Taxes Due at Closing Description Payee for CD Borrower Paid (if applicable) Seller Paid (if applicable) Section H: Other Description Payee for CD Borrower Paid (if applicable) Seller Paid (if applicable) Owners Title Insurance HOA: Section K & M: Adjustments for Items Paid by Seller in Advance: Date From Date To Amount FROM Buyer Amount TO Seller City/ Town Taxes County/ Parish Taxes HOA Dues Fees/ Assessments Section L & N: Adjustments for Items Unpaid by Seller: Date From Date To Amount TO Buyer Amount FROM Seller City/ Town Taxes County/ Parish Taxes HOA Dues Fees/ Assessments Annual Tax Due Dates (mm/dd) City/ Town Notes / Comments / Additional Due Dates / etc. County/ Parish Form Completion Completed By: Completed Date: *TAXVER*

8 KBYO Closing Request Required Items Closing Request Required Items for Submission requires that our partner, the originating institution review, confirm, or request changes to the fees and information that will populate to the Closing Disclosure (CD) that will be delivered to the borrower(s). As fees can change throughout the underwriting process, it is important that a CD is not issued too soon in the loan process. A closing disclosure that is issued and received by the borrower is allowed to have minor revisions that do not raise the APR because of a finance charge by more than.125 on a regular transaction or.250 on an irregular transaction. However, due to the CFPB unwillingness to correct the issue that industry participants refer to as The Black Hole (when a borrower makes a request to delay the closing after the CD has been made, but more than seven business days before the new closing date, there is no apparent legal way for the lender to disclose an increase in costs, for example in conjunction with a loan lock extension fee), you do not want to issue the CD too soon prior to consummation. Before a closing request can be submitted, the following items or conditions, if applicable, must be cleared or waived. This helps to ensure that fee changes will be limited and that the estimated closing date is realistic. A complete list of conditions than cannot be present are listed on page 2 of this document. However, you will find that most are related to Items that could cause a change in loan amount; Items that could cause a delay to the estimated closing date; Items that could cause additional fee changes once received; Items needed to be compliant on the current Loan Estimate such as a change in circumstance or; Information needed from the settlement agent that could impact fees or needed information for the closing disclosure. You can find out what items are needing to be addressed in several ways. Closing Request Screen in Motion will list the up-to-date missing items Home Screen contains a pop-up button that displays the missing items, loan notes regarding the CD and important dates called Pathway to Closing The Loan Approval form will also now contain a section displaying the missing items 6600 Peachtree Dunwoody Rd. NE, 600 Embassy Row, Suite 650, Atlanta, GA /7/2016

9 KBYO Closing Request Required Items List of items needed prior to submission of closing request General Loan is KBYO and not RESPA 2010 Loan must have initial underwriting approval Closing request has not been previously submitted Loan is locked Lock is not expired Loan is not in a suspense or second review status Asset Condition AS301 - Copy of Cancelled Earnest Money Check - Source of Funds Condition GE869 - Insured Closing Letter is not cleared Condition GE868 - Title Commitment Condition GE870 - Title Binder from Pierson and Patterson must be reviewed by CMC on TX loans Condition GE871 - Hazard Insurance with proper coverage Condition GE842 - Condo Insurance with proper coverage Condition GE843 - Flood Insurance with proper coverage Condition GE896 - Flood insurance requirements - Jumbo Option II Condition GE897 - Flood insurance requirements - Jumbo Option I Condition CR121 - Credit Report has expired" Condition CR120 - Payoff Condition CR106 - Terms of Subordinate Financing Condition CR111 - Payoff Needed Condition CR115 - Mortgage Insurance Not Cleared Condition CR108 - Verify Taxes and Insurance on subject Property Condition PR404 - Sales Contract Condition PR401 - Appraisal Condition PR402 - Appraisal Revisions Condition PR424 - Appraisal or Revisions *Some items not necessary on 1X Close CP loans Inspections Condition PR423 - Clear Termite Condition PR425 - Water Test Condition PR426 - Disaster Inspection Required Condition PR427 - Desk Review FHA Condition FH503 - FHA Appraisal VA Condition VA602 - Original Certificate of Eligibility Condition VA648 - HOA Info for VA Loan Condition VA650 - Inspection Condition VA657 - Flood Insurance Condition VA659 - Repair Certification Invoice Condition FI930 - Copy of Appraisal or Credit Invoice CD Related Condition FI996 - Settlement Agent Fee Collaboration Worksheet Condition FI998 - Purchase Transaction Contact Information Worksheet CIC Condition FI990 - CIC for locked pricing/credit change required Condition FI991 - CIC for loan amount change required Condition FI992 - CIC for loan term change required Condition FI993 - CIC for MI change required Condition FI994 - CIC for interest rate float to lock required Condition FI995 - CIC for rate change required RD Condition PR415 - RD Appraisal completed by HUD appraiser Condition RD707 - Septic Inspection Condition RD708 - Termite Inspection 6600 Peachtree Dunwoody Rd. NE, 600 Embassy Row, Suite 650, Atlanta, GA 30328

10 Closing Request Fee Reconciliation Closing Request Fee Reconciliation Once your loan is ready to be able to submit a closing request, the following illustrates the steps that should be taken. In the left hand navigation menu of Motion, Select the Pre Closing and Closing folder, then click the Closing Request screen. On the Closing Request screen you will see: 1. Ability to generate and review a Sample CD based on current fees and information. (optional) 2. Ability to generate a Closing Request Fee Reconciliation document. (required) Click the button to generate the Pre-Closing Fee Reconciliation Form and locate the document in attachments. This document lists every fee name, fee total, fee paid by (buyer, seller, lender), if the fee is paid outside of closing (POC), and the payable to name. Under each individual fee is a separate line labeled change request where you can request a change or complete missing needed items for CD preparation. Remember, Items that are to be shown as POC will require a paid receipt. Fees for items like credit report, appraisal, inspection, etc. require an invoice. Once you have completed the form upload it to attachments and complete the closing request submission by clicking the Submit Closing Request button. Once we receive your fee reconciliation form and closing request, A CMC Closing Disclosure Specialist will review the information and either make applicable changes or contact you with additional questions. Once they have finalized your closing request they will send a finalized sample CD for your review. Based on the estimated closing date, they will let you know the date they plan on sending the actual CD to the borrower. On the proposed delivery date, barring any changes in the loan that could change fees or delay the anticipated closing, the CD will be distributed to the borrower by CMC Peachtree Dunwoody Rd. NE, 600 Embassy Row, Suite 650, Atlanta, GA com 1/9/20161/9/2016

11 Motion Closing Request Fee Reconciliation Borrower(s): Rich Cordray Loan Number: Directions: Once you have reviewed your sample Closing Disclosure, please review the following fees. In the line after each fee labeled "Change Request", please list any changes you wish for CMC to review and approve prior to CD Issuance to the borrower(s). After review of the fees, please complete the acknowledgement section and upload this document, along with any needed invoices or paid receipts in Motion / Attachments. Estimated Closing Date 01/29/2016 My estimated closing date is still accurate Yes No Please update my estimated closing date to: / / Summary of Fees and Sample CD: The information below is accurate - No changes requested Yes No I have made requested changes below Yes No Planned Method of CD Delivery to Borrower CMC delivery via Motion Secure Delivery to Borrower Yes No CMC delivery to borrower via US Mail Yes No CMC delivery to you for borrower to Ink Sign and return to CMC Yes No CMC delivery to you for your E-Sign/ Secure Delivery platform and return to CMC Yes No Comments: Acknowledgement: I have reviewed the Estimated Closing Date, Fee Amounts, Responsible Party, and if fees are listed as POC (Paid Outside of Closing). Once the Closing Disclosure has been received by the borrower(s), I understand no further changes will be disclosed until the final Closing Disclosure sent to the closing by Crescent Mortgage. Completed By: Date: Phone: *MCCLOSRQST* 1 / 3

12 Motion Closing Request Fee Reconciliation Remember that fees for items such as hazard, inspections, appraisal, require an invoice. If a fee is POC, proof of payment is required. Summary of Loan Fees Generated on 01/09/2016 Description Fee Total Paid by Buyer Paid By Seller Paid By Lender POC Payable To Construction Draw/Inspection to 3rd Party $ $ $ Change Request $ Final Inspection Fee $ $ $ Change Request $ Appraisal Review 2nd Appraisal Fee $ $ $ Change Request $ Administration Fee $ $ $ Crescent Mortgage Co Change Request $ Appraisal Fee $ $ $ Vendor Change Request $ City Tax Reserves - Escrows $ $ $ Lender Change Request $ County Tax Reserves - escrows $ $ $ Lender Change Request $ Credit Report Fee $15.00 $15.00 $ Vendor Change Request $ Flood Certification $10.00 $10.00 $ First American Change Request $ GRMA Fee - Georgia $10.00 $10.00 $ State of Georgia Change Request $ Hazard Insurance Premium $1, , Vendor Change Request $ Hazard Insurance Reserves $ $ $ Lender Change Request $ Title - Lenders Title Insurance $1, $1, $ Vendor Change Request $ *MCCLOSRQST* 2 / 3

13 Motion Closing Request Fee Reconciliation Loan Origination Fee $2, $2, $ Broker Change Request $ Modification Fee $ $ $ Lender Change Request $ Title - Owners Title Insurance (Optional) $ $ $ Vendor Change Request $ Processing Fee $ $ $ Broker Change Request $ Title - Settlement Fee $ $ $ Vendor Change Request $ Title - Title Exam fee $ $ $ Vendor Change Request $ Transfer Tax - Intangible Tax $ $ $ Vendor Change Request $ Title - Wire Fee $25.00 $25.00 $ Vendor Change Request $ *MCCLOSRQST* 3 / 3