Make Compliance Relaxing

Transcription

1 Make Compliance Relaxing Sit back, relax. The webinar will begin at the top of the hour. While you are waiting, you may download the presentation outline at: QuestSoft.com/TRID-Webinar Please stand by. The webinar will begin in a few minutes. = Your phones have been muted. If you re using the speakers on your PC you don t need to call in. While you are waiting, you may download the presentation outline at: QuestSoft.com/TRID-Webinar YOU MAY ALSO like us on or follow us on facebook.com/questsoft twitter.com/questsoft TO DOWNLOAD THE PRESENTATION Racing To The Deadline Ensuring TRID Compliance Thank you for attending. The webinar has begun. 1

2 Housekeeping Asking Questions Downloading Materials Taming TILA-RESPA Through Automated Compliance Technology Technical Difficulties Go To Meeting Support Disclaimer facebook.com/questsoft twitter.com/questsoft Part One of Two Part Series Today s Topic Ensuring TRID Compliance Coming in May Eliminating SSPL Fee Cures Tolerance levels for fees under TRID are tightening. You can t afford more borrower refunds out of your pockets. The average cure TODAY is $75 per borrower and it will skyrocket under TRID to perhaps $ unless you use Compliance EAGLE s Guaranteed Closing Cost System with over 20,000 service providers nationwide. Pay for your entire compliance process with the savings from this feature. Today s Presenters Angela Cheek Vice President and Counsel, Product Compliance Mavent, Inc. Michael Black Compliance Product Manager Mavent, Inc. Jennifer Mathwig Compliance EAGLE Product Manager QuestSoft Corporation Leonard Ryan President QuestSoft Corporation 2

3 Agenda Documenting Evidence of Compliance Disclosure Timing and Delivery Good Faith Estimate of Fees (Fee Variance/Tolerance Thresholds) > Changed Circumstances > Timing > Delivery > Thresholds Loan Estimate and Closing Disclosures > Calculation vs. Display > Rounding > New Calculations How Mavent and QuestSoft are jointly preparing for this change Live Presentation of Compliance EAGLE TRID Testing Platform Questions What You Need to Know About The TILA-RESPA Integrated Disclosures Safe Harbor This presentation may contain forward-looking statements under the safe harbor provisions under The Private Securities Litigation Reform Act of These forwardlooking statements may include the company s ability and timing to enhance the features and functionality of Mavent software and services and of new product launches. Additional risks and uncertainties related to the company s business are discussed in the Ellie Mae s Securities and Exchange Commission filings, including but not limited to the company s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Unless otherwise required by applicable laws, Ellie Mae undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The content provided in this slide presentation is intended for Mavent webinar attendees and their staff only and should not be distributed outside your company. The content is intended for general information purposes only. It should not be construed as legal advice or You are advised to consult your own compliance staff or attorney regarding your specific residential mortgage lending questions or situation to ensure your compliance with applicable laws and regulations. 3

4 RESPA-TILA Applicability & Compliance Applies to most closed-end consumer credit transactions secured by real property for applications received on or after 8/1/2015 Excludes: > Open-end credit (i.e., HELOCs) > Reverse mortgages > Loans secured by a dwelling that is not real property (e.g., mobile home, house boat) > Partial exemption for certain junior lien loans associated with housing assistance loans for low/moderate-income consumers > Lenders who made 5 or fewer mortgage loans in the preceding calendar year (unless made more than one HOEPA loan in any 12-month period) (1026.2(h); (e)) Evidence of Compliance > Loan Estimate 3 years after consummation > Closing Disclosure 5 years after consummation > Records can be maintained by any method that reproduces disclosures and other records accurately, including computer programs ( (c)) Liability Rule relies heavily on TILA statutory authority RESPA Liability No private right of action for integrated disclosures under RESPA Administrative enforcement TILA Liability Unlike RESPA, potential civil liability/private right of action (borrower lawsuits) Potential assignee liability Rule does not state whether TILA or RESPA statutory liability applies to different parts of the rule Instead states that the preamble describes the statutory authority for each provision, which provides sufficient guidance for industry, consumers, and the courts regarding liability Liability CFPB Enforcement (Dodd Frank Act 1055) Administrative or Judicial Relief Refunds Restitution Damages Limitations on activities Costs in enforcing action Civil Money Penalties Tier 1: Up to $5,000 per day Tier 2: Reckless violations - up to $25,000 per day Tier 3: Knowing violations - up to $1,000,000 per day 4

5 Compliance EAGLE Can Help You Solve for (X) When do I need to provide a Loan Estimate? When do I need to provide the SSPL? When do I need to provide a Closing Disclosure? When does a consumer need to receive the Loan Estimate? Do I have evidence of consumer s intent to proceed with the transaction? When does a consumer need to receive the Closing Disclosure? Are the fees within tolerance (variance)? Is the APR accurate? Is the Loan Product accurate? Did I add a Prepayment Penalty after I provided the Closing Disclosure? Do I need to redisclose? Can I redisclose? When do I need to redisclose? Do I have evidence I complied with these questions and requirements? What Triggers a Loan Estimate? Receipt of all six pieces of information (Application): 1. Borrower Name 2. Borrower Monthly Income 3. Borrower SSN/ITIN (to get credit report) 4. Property Address 5. Estimated Property Value 6. Estimated Mortgage Loan Amount 7. Any other information deemed necessary Loan Estimate Timing and Delivery Initial Loan Estimate delivered within: > 3 business days after receiving Application (Creditor or Broker). ( (e)(1)(iii)(A)) - If not provided in person, receipt assumed within 3 specific business days after delivery or mailing. ( (e)(1)(iv)) > 7 specific business days before consummation. ( (e)(1)(iii)(B)) 5

6 Loan Estimate Timing and Delivery Revised Loan Estimate: > Delivered within 3 business days of receiving information sufficient to establish changed circumstance. ( (e)(4)(i)) > Received 4 specific business days before consummation. ( (e)(4)(i)) > Cannot be delivered with or after Closing Disclosure. ( (e)(4)(ii)) SSPL, Toolkit, and Intent to Proceed Provide List of Settlement Service Providers (SSPL) within: > 3 business days after receiving Application ( (e)(1)(vi)) > Identify at least one available provider for each settlement service for which consumer is permitted to shop. ( (e)(1)(vi)) Provide Home Loan Toolkit within: > 3 business days after receiving Application for first lien purchase money loan. ( (g)(1)) > Intent to Proceed > Cannot impose a fee (other than credit report fee) before consumer has received Loan Estimate and indicated an intent to proceed with the transaction described by that Loan Estimate (e)(2)(i)(A) > Must document to satisfy the requirements of Closing Disclosure Timing and Delivery Closing Disclosure must be received by consumer no later than three specific business days before consummation. ( (f)(1)(ii)) > If not provided in person, consumer considered to have received 3 specific business days after delivered or placed in mail. ( (f)(1)(iii)) Revised Closing Disclosure delivered at or before consummation reflecting any changed terms, unless: > Disclosed APR becomes inaccurate > Loan Product changed prior Closing Disclosure becomes inaccurate > Prepayment penalty added THEN Revised Closing Disclosure received 3 specific business days before consummation. ( (f)(2)(ii)) Post-Consummation Requirements > Changes within 30 days after consummation. If an event causes CD to be inaccurate with respect to an amount consumer pays, creditor must provide a corrected CD within 30 days after learning of the change. ( (f)(2)(iii)) > Non-numeric clerical errors. Not a violation if non-numeric clerical errors, if creditor provides corrected disclosures within 60 days after consummation. ( (f)(2)(iv)) > Tolerance cures. To cure a tolerance violation, refund and corrected CD has to be provided within 60 days after consummation. ( (f)(2)(v)) 6

7 Mavent Can Help You with Disclosure Timing and Delivery Loan Estimate Mailed/Delivered Within Three Business Days of Application Initial Loan Estimate Sent Date > 3 Business Days from Application Date Loan Estimate Mailed/Delivered At Least Seven Business Days Before Consummation Initial Loan Estimate Date < 7 Business Days before Consummation Date List of Settlement Service Providers Timing and Delivery Date Rules List of Settlement Service Providers Sent Date > 3 Business Days from Application Date List of Settlement Service Providers Sent Date > 3 Business Days from Application Date (Enterprise Rule) List of Settlement Service Providers Sent Date is Missing Loan Estimate Disclosure Received and Intent To Proceed Intent To Proceed Date < Loan Estimate Date (In Person) Intent To Proceed Date < Loan Estimate Presumed Received Date Intent To Proceed Date < Loan Estimate Received Date Mavent Can Help You with Disclosure Timing and Delivery Loan Estimate Received At Least Four Business Days Before Consummation Last Loan Estimate Sent Method In Person and No Received Date Last Loan Estimate Sent Method Not In Person and No Received Date Last Loan Estimate Received Date and Consummation Date Prior Loan Estimate Received At Least Four Business Days Before Consummation Prior Loan Estimate Sent Method In Person and No Received Date Prior Loan Estimate Sent Method Not In Person and No Received Date Prior Loan Estimate Received Date and Consummation Date Prior Loan Estimate Received At Least Four Business Days Before Consummation Prior Loan Estimate Sent Method In Person and No Received Date Prior Loan Estimate Sent Method Not In Person and No Received Date Prior Loan Estimate Received Date and Consummation Date Loan Estimate Disclosure Date on or after Closing Disclosure Date Last Loan Estimate and Closing Disclosure Mavent Can Help You with Disclosure Timing and Delivery Closing Disclosure and Consummation Date Initial Closing Disclosure Sent Method In Person and No Received Date Initial Closing Disclosure Sent Method Not In Person and No Received Date Closing Disclosure Received Date and Consummation Date Other Document Sign Date is Missing Initial Loan Estimate Sent Date is Missing Document Sign Date and Loan Disbursement Date are Missing Closing Disclosure Redisclosure and Waiting Period Corrected Closing Disclosure No Later Than 3 Business Days Before Consummation (Inaccurate Loan Product) Corrected Closing Disclosure No Later Than 3 Business Days Before Consummation (Inaccurate APR)(Regular) Corrected Closing Disclosure No Later Than 3 Business Days Before Consummation (Inaccurate APR)(Irregular) Corrected Closing Disclosure No Later Than 3 Business Days Before Consummation (Prepayment Penalty Added) 7

8 Closing Disclosure Loan Product Description If the Loan Product changes, creditor must provide a corrected Closing Disclosure so consumer RECEIVES a Corrected Closing Disclosure not later than the third specific business day before Consummation. There are five components to describe the Loan Product: Payment change feature Duration/time period of payment change (if applicable) Rate feature Duration/time period of initial rate change (if applicable) Duration time period of subsequent rate change (if applicable) Closing Disclosure Loan Product Description The Mavent Review in Compliance EAGLE will determine the loan product based on the characteristics of the loan. Payment Change Feature Negative Amortization Interest Only Payment Period Balloon Payment (payment that is 2x prior payment amount) Payment Change Duration Number of months divisible by 12 Describe with Year Less than 24 months Describe with mo. Equal to or greater than 24 months Describe with Year, rounded to two decimal places Rate Change Feature Adjustable Rate Step Rate Fixed Rate Initial and Rate Change Duration Number of months divisible by 12 Describe with Year Less than 24 months Describe with mo. Equal to or greater than 24 months Describe with Year, rounded to two decimal places If the loan product disclosed on the Closing Disclosure is inaccurate, the system will fail the loan. Changed Circumstances and Fee Variance/Tolerance 8

9 Tolerances: Good Faith Estimate of Closing Costs Final Rule Expands the 0% Tolerance Category > 0% Increase Category ( (e)(3)(i)) o Fees paid to the creditor, a mortgage broker o Affiliates of the creditor or mortgage broker o Third-party services for which the consumer cannot shop o Transfer taxes > 0% Decrease Category (Lender Credits) ( (e)(3)(i)) > 10% Category (aggregate amount) ( (e)(3)(ii)) o Services for which the consumer can shop, but selects a provider on the written list of providers o Recording fees > No Tolerance Limitation ( e)(3)(iii) o Optional/voluntary services (including owner's title insurance) o Prepaid interest o Property insurance premiums o Amounts placed into an escrow, impound, reserve, or similar account o Fees to 3 rd party service providers not on list provided by creditor Changed circumstance/borrower requested changes still apply > Have to send revised disclosure within three business days of the change > Rule for rate locks Changed Circumstance Categories Changed circumstance affecting settlement charges ( (e)(3)(iv)(A)) > Example: Appraisal Fee to Affiliate Changed circumstance affecting eligibility ( (e)(3)(iv)(B)) > Example: Ineligible for Loan Program Revisions requested by consumer ( (e)(3)(iv)(C)) > Example: Adding Power of Attorney Interest rate dependent charges ( (e)(3)(iv)(D)) > Example: Initial Loan Estimate with no rate lock Expiration of initial Loan Estimate ( (e)(3)(iv)(E)) > Example: Intent to Proceed on Business Day 11 Delayed settlement date on construction loan ( (e)(3)(iv)(F)) > Example: Settlement expected to occur more than 60 days after initial Loan Estimate and statement provided on initial Loan Estimate Calculating Fee Category Variances and Documenting Changed Circumstances The Compliance EAGLE Mavent Review will help assess actual values prior to and at each disclosure event to determine: > Did the aggregate of lender credits decrease? > Did any charge subject to 0% variance get added or increase? > Did the aggregate of the 10% variance section exceed the 10% limit? > Did a component of the 10% variance section get removed? > Was an appropriate change circumstance documented? > Were the charges that changed related to the identified change circumstance? > Was the change circumstance re-disclosed on time? > Are the fee names consistent between LE and CD? > Did the fee change sections between LE and CD? 9

10 Loan Estimate vs. Closing Disclosure Fee Variance Thresholds Loan Estimate and Closing Disclosure Form Issues Loan Estimate/Closing Disclosure Form Issues Dynamic Forms > Adjustable Interest Rates (AIR) and Adjustable Payments (AP) Tables Loan Product Defined Term > Triggers revised CD with a new waiting period > (a)(10); (a)(5)(iii) & (f)(2)(ii) Projected Payments Table Loan Calculations and Comparisons > Comparisons > In 5 years Total PITI and loan costs paid off > In 5 years Total Principal paid off > APR > Total Interest Percentage (TIP) Additional Information About This Loan > Broker NMLSR ID > Lender NMLSR ID > LO NMLSR ID for Broker and Lender, Name Round, Truncate, Keeping Actual Values 10

11 Loan Estimate Comparison Requirements The Mavent Compliance Service within Compliance EAGLE will calculate the following values and compare them to the last disclosed values (until a Closing Disclosure has been sent): Total Principal, Interest, MI, and Loan Costs in First Five Years Total Principal in First Five Years APR Total Interest Percentage Closing Disclosure Requirements The Mavent system will calculate and verify the values disclosed on the Closing Disclosure: Finance Charge Amount Financed APR Total Interest Percentage Liability after Foreclosure Closing Disclosure Requirements Loan Estimate Total Principal in Five Years Last Loan Estimate Total Principal in Five Years < System Calculated Last Loan Estimate Total Principal in Five Years > System Calculated Loan Estimate Total Interest Percentage (TIP) Last Loan Estimate Total Interest Percentage (TIP) < System Calculated Last Loan Estimate Total Interest Percentage (TIP) > System Calculated Closing Disclosure Total Interest Percentage (TIP) Last Closing Disclosure Total Interest Percentage (TIP) < System Calculated Last Closing Disclosure Total Interest Percentage (TIP) > System Calculated APR Disclosure Tolerance (Regular) Closed-End APR Disclosure Tolerance APR Disclosure Tolerance (Irregular) Closed-End APR Irregular Loan Disclosure Tolerance Finance Charge Disclosure Tolerance Disclosed Finance Charge Must Be >= Actual Finance Charge - $100 Foreclosure Rescission Finance Charge Tolerance Disclosed Finance Charge Must Be >= Actual Finance Charge - $35 Finance Charge Rescission Tolerance Closed-End Finance Charge Rescission Tolerance 11

12 Closing Disclosure Projected Payment Table Requirements Mavent Compliance Service will calculate the Projected Payments Table for either the Loan Estimate or Closing Disclosure Mavent Compliance Service will compare Disclosed Projected Payments Table to Calculated Projected Payments Table Number of Columns Years in Sequence Subheading Principal & Interest Payments Interest Only Min and Max Principal and Interest Mortgage Insurance Estimated Total Payment Closing Disclosure Projected Payment Table Requirements Closing Disclosure Other Mavent Reviews Adjustable Interest Rate Table The Mavent Compliance Service will calculate the Adjustable Interest Rate Table and compare the last disclosed Adjustable Interest Rate Table (from the LE or CD) to Calculated Adjustable Interest Rate Table. Adjustable Payment Table The Mavent Compliance Service will calculate the Adjustable Payment Table and compare the last Disclosed Adjustable Payment Table (from the LE or CD) to the Calculated Adjustable Payment Table. 12

13 Closing Disclosure Other Mavent Reviews Cash to Close The Mavent Compliance Service within Compliance EAGLE will calculate and verify values disclosed within the Loan Estimate and Closing Disclosure Cash to Close tables. Total Closing Costs Closing Costs Paid Before Closing Closing Costs Financed Down Payment/Funds from Borrower Deposit Funds for Borrower Seller Credits Adjustments and Other Credits Cash to Close CFPB RESPA-TILA Implementation Resources 2015 Mavent Inc. Transition to Compliance EAGLE Demonstration and Final Quarter Roadmap 13

14 LOS/Customer Interface Timeline December 2014 to April 2015 LOS partners implementing RESPA-TILA changes. January to June 2015 LOS partners testing new fields for RESPA-TILA changes with Compliance EAGLE. January to July 31, 2015 Users testing RESPA-TILA changes directly within Compliance EAGLE and via their LOS integration. August 1, 2015 Live operation of RESPA-TILA rules for applicable loan review requests Part One of a Two-Part Series Today s Topic Ensuring TRID Compliance Coming in May Eliminating SSPL Fee Cures Tolerance levels for fees under TRID are tightening. You can t afford more borrower refunds out of your pockets. The average cure TODAY is $75 per borrower and it will skyrocket under TRID to perhaps $ unless you use Compliance EAGLE s Guaranteed Closing Cost System with over 20,000 service providers nationwide. Pay for your entire compliance process with the savings from this feature. Every Loan, Every State, Every Regulation Services Everything TRID Federal, State, Local Rules and Regulations Instant HMDA validations (loan Level) QM/ATR ClosingCorp Advantage Real numbers - Not estimates Actual closing cost data Exclusionary Lists Flood LoanSafe Risk Manager tools (Fraud and Collateral safe guard) LSC FHA AUS (significant cost savings) Guaranteed transfer tax and recording fees 4506T and SSA 89 (SSN Verifications) AVM Tools Vendors 14

15 Reminder to Check Your for Part 2 In May, we will follow up with Part 2 of our Webinar series: Are you guesstimating your way through loan estimates? In today s lending world, that s a risk you can t afford. We will show you how Compliance EAGLE provides you a solution to solve these issues. Questions & Contact for More Information QUESTIONS & ANSWERS If you have a question, please submit it using the questions tab on the GoToWebinar tool bar. Sales Department , Option 1 sales@questsoft.com Steve Butler Senior Vice President, Compliance EAGLE Products , ext 220 steve.butler@questsoft.com Make TRID Relaxing For More Information About Compliance EAGLE, contact , Option 1 or visit us at 15