WHOLESALE Good Faith Estimate Compliance Manual

Transcription

1 WHOLESALE Good Faith Estimate Compliance Manual Understanding the 2010 GFE Compliance Department 2/2/ Pacific One Lending. Rates, fees and programs are subjected to change without notice. Other restrictions may apply. Information is intended solely for mortgage bankers, mortgage brokers, financial institutions and correspondent lenders. Not intended for distribution to consumers, as defined by Section of Regulation Z, which implements the Truth-In-Lending Act. Licensed by the Department of Business Oversight, under the California Residential Mortgage Lending Act.

2 Preface Pacific One Lending has created a Wholesale Good Faith Estimate Compliance Manual containing the following materials: The Good Faith Estimate (GFE) Requirements: Outlines all the requirements pertaining to issuing a GFE under RESPA/Regulation X and provides a step by step instruction to ensure the GFE is completed properly. Quick Reference Guide: This is sample GFE that has comment boxes next to or close to each field/block. It is a great quick reference tool on how to complete a GFE. GFE Review and Required Documents for Lender Disclosure: This provides what information is needed at time of submission to ensure lender required disclosures may be issued to the borrower. Additional Information: Helpful information on some of the top areas errors made by persons completing the GFE. Change of Circumstance: Provides a list of acceptable and non allowable change of circumstances. Also includes quick reference matrix for change of circumstances. RESPA TILA/MDIA Quick Reference Guide: Provides information when disclosures must be issued, the waiting periods before fees may be assessed, and loan closings. Page 1 of 23

3 Table of Contents Good Faith Estimate Requirements Wholesale 2-12 Quick Reference Guide GFE Review and Required Documents for Lender Disclosure Additional Information 19 Change of Circumstance RESPA TILA/MDIA Quick Reference Guide Page 2 of 23

4 Good Faith Estimate Requirements - Wholesale Overview RESPA/Regulation X stipulates that within three days of completing an application for a mortgage loan, borrowers must be given a Good Faith Estimate that lists an estimate of charges they are likely to pay at settlement. Our LOS systems use both automated and manual entry of data in several fields in order to generate a complete, compliant Good Faith Estimate disclosure for delivery to the borrower(s). Please refer to the following instructions to ensure the GFE is completed correctly. Timing The GFE is provided within three (3) days of a completed application. Under RESPA, a completed application is defined as six (6) minimum items of information, and any other information deemed necessary by the loan originator. 1. borrower s name 2. borrower s Social Security Number or other unique identifier used to pull a credit report 3. borrower s monthly income 4. property address 5. loan amount sought 6. estimated value of property It is presumed the first six items were received and relied on when the GFE is issued. Pacific One Lending defines an application as receipt of all six items identified above. If all six of these items are not obtained, a GFE should not be issued. If the GFE is issued without completion of these items, we cannot accept the GFE. If the application is denied or withdrawn prior to the three general business days of the application, the GFE does not have to be provided to the borrower(s). The GFE is deemed received by the borrower if the following conditions are met: 1. three calendar days have elapsed since mailing the GFE, exclusive of Sundays and federal holidays; or 2. the borrower signed an acknowledgement of receipt for the GFE; or 3. the borrower consented to receiving the GFE via electronic delivery and the rules under the ESIGN act were met. This is important because no fees other than fees for a credit report may be collected prior to the GFE being deemed received and the borrower expressing their intent to proceed with the loan described in that GFE. Note: A general business day is defined as any day the Pacific One Lending is open for business to the general public. A calendar day is defined as any day, except Sundays and specific Federal public Holidays. Before moving on, it is important to note, NO BLANKS FIELDS ARE PERMITTED. Please complete the GFE in its entirety. Now, let s take a closer look at the GFE, page by page, Block by Block. Page 3 of 23

5 COMPLETING THE GFE PAGE 1 General Heading On the top of page 1, you will see the General Headings section. The left-hand side is for information about the loan originator completing the GFE, including the name of the loan originator s business (not the name of the individual originating the loan), address, phone number, and address. The right-hand side is for information about the borrower(s), including name and address. This section also provides for the date the GFE is prepared and delivered by mail, in-person, or e-delivered to the borrower(s). This date must be within 3- general business days of taking a completed application. Important Dates The Important dates section contains deadlines that are important to the borrower(s) and loan originator. Line 1 Enter the date of the lock expiration. If the loan is not locked, enter the current date, which should match the Date of GFE on page 1. Line 2 Initial GFE: Enter the date 10-general business days from the date the GFE is provided to the borrower(s). ( General business days are defined as any day Pacific One Lending is open to the public for business, excluding Saturdays, Sundays and Pacific One Lending Holidays). Revised GFE: If the borrower s intent to proceed has already been received enter the same date as disclosed in the initial GFE. If an intent to proceed has not been received, enter a new 10 general business day period and obtain the borrowers intent to proceed for the revised GFE. Line 3 Line 4 If the loan IS locked, enter the rate lock period (i.e. 30 days, 45 days, etc ) If the loan is NOT locked, enter NA. If the loan IS locked, enter NA. If the loan is NOT locked, enter 5 days. Page 4 of 23

6 Any time a new rate lock or rate lock extension is issued and there are changes to pricing or rate, a new GFE must be prepared and ONLY the charge or credit for the interest rate chosen, adjusted origination charges, per diem interest, Important Dates, and other related loan terms may change. All other charges must remain the same. If a rate lock extension is issued and only changes the lock expiration a new GFE is not required. Summary of your loan The Summary of your loan section includes information about the initial loan amount, loan term, initial interest rate, and monthly payment amount (principal, interest, and mortgage insurance only). This section also includes specific yes or no questions with regard to whether the interest rate, loan balance, and payment amounts can increase during the life of the loan, and whether the loan has a prepayment penalty or a balloon payment. Can your interest rate rise? Check either the Yes or No box to indicate whether the interest rate can rise. If it can rise, include the maximum rate it can rise to over the life of the loan, and the amount of time before the first rate change will take place. Even if you make payments on time, can your loan balance rise? Check either the Yes or No box to indicate whether the loan balance can rise even if the borrower makes payments on time. An example of this is in the case of a negative amortization loan. You would check Yes the loan balance can rise, and then enter the maximum amount the balance can rise during the life of the loan. If the balance increase is due to escrow/impound accounts, you do not have to check Yes. Even if you make payments on time, can your monthly amount owed for principal, interest, and any mortgage insurance rise? Check either the Yes or No box to indicate whether the monthly payment amount owed for the principal, interest, and any mortgage insurance can rise even if payments are made on time. If you check Yes, then you need to provide the following additional information: The amount of time until the monthly payment owed can first change. The maximum the monthly payment amount owed could be at the time of the first change. The maximum the monthly payment amount owed could be over the life of the loan. Does your loan have a prepayment penalty? Check either the Yes or No box to indicate whether there is a prepayment penalty on the loan. If you check Yes, enter the maximum amount of the prepayment penalty. Page 5 of 23

7 Does your loan have a balloon payment? Check either the Yes or No box to indicate whether there is a balloon payment. If you check Yes, enter the amount of the balloon payment and in how many years it will be due. Escrow/ Impound Account Information The Escrow account information section discloses to the borrower whether there will be an escrow/impound account set up to pay such items as hazard insurance, real estate taxes, etc. Summary of your settlement charges The Summary of your settlement charges section contains a line designated as A Your Adjusted Origination Charges. This is the sub-total from A on page 2. There is another line designated as B Your Charges for All Other Settlement Charges. This is the sub-total from B on page 2. Lines A and B are then totaled together to disclose the Total Estimated Settlement Charges. This shows the borrower s adjusted origination charges, and the charges for all other settlement services. COMPLETING THE GFE PAGE 2 This page discloses the amount of the charges associated with the loan and is broken into Blocks. Your Adjusted Origination Charges Block 1 ALL broker and lender fees and compensation involved in the transaction, except for any charges for the specific interest rate chosen (points). This must include all fees associated with getting the loan and paid to the lender or broker, such as borrower paid or lender paid compensation, origination fees, application fees, credits, processing fees (including 3 rd party processing fees), underwriting fees, document preparation, wire fees, lender inspection, funding fees, overnight delivery, AUS fees, MERS fees, PIW, and other miscellaneous fees an originator cannot separately charge additional fees for these services. Block 1 fees cannot increase without a valid change of circumstance. Page 6 of 23

8 Block 2 Discloses the credit or charge (points) for the specific interest rate chosen. NOTE: In a brokered transaction the first check box may never be selected. Lender Credit: If the net payment of lender credits and loan level price adjustments to the borrower result in a credit to the borrower, the second box must be checked to reflect a credit to the borrower and the amount of the credit and interest rate is entered. The total is then shown in the column on the right. Charge: If the net payment of lender credits and loan level price adjustments to the borrower result in a charge to the borrower, Box 3 must be checked and the amount of the charge and interest rate is entered. The total is then shown in the column on the right. No Charge or Credit: If the credit or charge equals zero ($0.00) the broker must insert a 0 in either the second or the third check box and check the box. Page 7 of 23

9 No Cost Loan: If the no cost loan includes the fees in Block 1 and some or all of the third party fees listed in Blocks 3-11, then the credit in Block 2 must cover the total amount of Block 1 and the intended third party fees listed in Blocks 3 through 11 as appropriate. This amount of the credit may not be reduced if the fees are lowered at closing. The second box must be selected. Block A Represents the sum of Block 1 and Block 2. If the amount is a negative number, do not be alarmed, this is possible in some transactions, i.e. no cost loans. While the interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE, so be sure to enter the correct fees in Blocks 1 and 2, unless there is a change in loan amount. Your Charges for All Other Settlement Services This section discloses all other settlement charges. You must disclose all fees regardless of who is paying them (borrower, seller, lender, etc.). Even if you are doing a no cost loan, you must still disclose all fees. Block 3 Lists each third party settlement service provider that is chosen by the loan originator, other than title services. The borrower(s) does not have the option to choose these settlement service providers. The specific service and the estimated price for the service must be included. Include fees specific to government loan programs, such as a VA Funding Fee in this block. You can add or delete lines in this block as needed for each particular loan. Examples include providers of appraisals, credit reports, tax services, flood certifications, upfront mortgage insurance premiums, and VA funding fees. Block 4 Is the lump sum of all title or settlement agent/closing agent services, regardless of who selects or pays for them in the box on the right-hand column. Examples of these fees include fees for title searches, examinations, commitments, endorsements, delivery, notary, settlement/closing agent fees and any lender s title insurance premiums that may be required. Page 8 of 23

10 Block 5 On purchase transactions only, enter the estimate of the charge for owner s title insurance and related endorsements, regardless of who selects and pays for them in the box on the right-hand column. This is for the basic owner s title insurance policy. If an borrower later selects an enhanced owner s title insurance policy or an endorsement to an owner s title insurance policy, a revised GFE may be issued to disclose the increased charges. On refinance transactions a NA or Not Applicable is entered in the box on the right-hand column. Block 6 List each required third party service that the borrower(s) is allowed to shop for and select the service provider, other than title services. Provide a brief description of the service (e.g. survey, pest inspection, well, septic, home warranty, and fees associated with HUD-approved counselors, etc.), enter the estimated charge for each of the services and enter the lump sum total of all services in the box in the right-hand column. If the borrower is permitted to shop for any settlement services disclosed in Blocks 4, 5 or 6, a Settlement Service Provide List identifying the name and contact information of a recommend service provider for each service the borrower may shop for must be provided to the borrowers with the initial GFE. Block 7 In the box in the right-hand column, the estimate of the state and local government fees for recording the loan and title documents that can be expected to be charged at settlement is entered. Block 8 In the box in the right-hand column, the estimate of the sum of all state and local government fees on mortgages and home sales that are likely to be charged at settlement based on the loan amount sought or sales price and the property address is entered. Block 9 If an escrow/impound account is required, in the box in the right-hand column, the estimate of the amount the borrower will be required to place into the escrow/impound account at closing for recurring charges is entered. These include: Property Taxes Mortgage Insurance Hazard Insurance Other periodic charges Flood Insurance The appropriate check box is selected to indicate whether the escrow/impound account will cover future payments for all taxes and all insurance as payments come due. If the escrow/impound account includes other obligations, mortgage insurance or some, but not all, property taxes or hazard insurance, the other box is selected and items included must be listed. Block 10 In the box in the right-hand column, the estimate of the total daily interest (a.k.a. odd days interest and per diem interest) on the loan from settlement until the first day of the first period covered by the scheduled mortgage payments is entered. In the first box the amount of interest charged per day is entered, and then Page 9 of 23

11 enter 15 days for the number of days used in the calculation and the projected closing date used in the calculation is entered. Block 11 In the box in the right-hand column, the estimate of the lump sum total of all premiums for hazard insurance and other similar insurance (e.g., fire, flood, earthquake, etc.) that the borrower is required to purchase at or before closing is entered. The nature of each type of insurance and an estimate of the charges must be stated. If such insurance is part of an escrow account, the amount of the initial deposit must be included. Exception, if the loan is a refinance and the insurance has already been paid and there is nothing due at closing $0.00 may be entered. Block B and Block A+B The sum of all amounts listed in Blocks 3 through 11 is entered in Block B. This amount is then added to Block A from the top of the page to obtain the Total Estimated Settlement Charges. COMPLETING THE GFE PAGE 3: Understanding which charges can change at settlement The purpose of this section is to give information to the borrower(s) to help him or her understand what to expect for final charges on the HUD 1 Settlement Statement. There are no completion fields in this section, but there is valuable information that will help the borrowers(s) understand whether a fee may be changed after the initial GFE is issued and before the final HUD 1. It is important to place each fee in the appropriate category. Examples of fees included in these tolerance buckets are as follows: Page 10 of 23

12 Zero Tolerance 10% Tolerance No Tolerance Block 1: Origination charges (origination fee, broker compensation, document prep fee, overnight delivery fee, funding fees, wire fees, application fee, underwriting fee, MERS fee, and survey fee if required by lender, etc.) Block 2: Lender Credits, Discount Points, LLPAs Block 8: Transfer taxes Block 3: Credit report, appraisal fee, tax service, flood cert, upfront MIP, and VA Funding Fee Block 4: Title services and lender s title insurance Block 5: Owner s title insurance Block 6: Survey, pest inspection, well, septic, home warranty Required services the borrower selected on their own & not from a list provided by the loan originator: Block 4: Title services and lender s title insurance Block 5: Owner s title insurance Block 6: Survey, pest inspection, well, septic, home warranty Block 9: Initial deposit for escrow accounts Block 10: Daily interest charges Block 11: Homeowner s insurance Using the tradeoff table The purpose of this section is to help the borrower(s) compare the transaction disclosed on the GFE with similar transactions: The same loan with lower settlement charges but a higher interest rate. The same loan with a lower interest rate but higher settlement charges. The fields in the first column titled This loan in this GFE should be filled in by the loan originator. Completion of columns 2 and 3 are at the option of the loan originator. Page 11 of 23

13 Using the shopping chart The purpose of this section is to give the borrower(s) the ability to compare the information from this GFE with the information from the GFE's of other lenders. Completion fields in the This loan column should be filled in. The information in the columns labeled Loan 2, Loan 3, and Loan 4 will be completed by the borrower(s) by hand, as the borrower(s) shops around with other loan originators. Page 12 of 23

14 Do not leave any boxes or fields blanks on the GFE. Enter the Company name, address, address, and phone number. Do not enter LO s name. If rate is locked, enter NA. If rate is not locked, enter a minimum of 5 days. Enter the initial loan amount. Enter the number of years, not months. Enter the initial PIMI only. Do not enter monthly tax, and hazard insurance amounts. Answer NO. IMC does not make Neg. Am. loans. Answer YES or NO and complete the boxes accordingly. Quick Reference Guide Enter Borrower/ Co- Borrower name & property address. Enter date GFE prepared & delivered. Must be within 3 business days of receiving the Big 6. Enter the rate lock expiration date, or if not locked, enter the date & time GFE is prepared. Initial GFE: Enter a minimum of 10-business days, excluding Saturdays, Sundays and IMC Holidays. Revised GFE: If borrower s intent to proceed has been obtained, enter same date from initial GFE. If not, enter new 10- business day period & obtain intent to proceed. If locked, enter the rate lock period (15, 30, 45 days, etc.). If not locked, enter NA. Check the box to indicate whether the loan includes an escrow account or not. Enter monthly payment (PIMI only). Must match payment amount in Summary section above. Page 13 of 23

15 Block 1 = May NEVER increase unless the loan amount changes, and a portion of Block 1 is tied to the loan amount. Block 2 = May only change when the interest rate is locked. Block 3-11 = May only change if there is a valid change circumstance tied to that specific fee (Block). Block 1: Lender Paid: Enter all fees and lender paid broker compensation as agreed to in current Compensation Agreement with IMC. Borrower Paid: Enter all lender fees and broker compensation. Block A: Add Block 1 & 2 and enter amount. Block 3: Enter the type of service and itemized amount of fee. Then enter the lump sum in the right hand column. This is for 3 rd party providers the borrower cannot select. Block 6: Enter the type of service and itemized amount of fee. Then enter the lump sum in the right hand column. This is for 3 rd party providers the borrower can select and you identified on a Settlement Provider List and gave to the borrower with the GFE. Enter NA or $0.00 if borrow is not permitted to shop. DO NOT LEAVE BLANK. Block 9: Enter initial impound deposit, and heck appropriate box(s). If impounds are not required enter NA or $0.00. Block 10: Enter 15 days of per diem interest, and complete boxes. (FHA MANDATES A MINIMUM OF 15 DAYS) Block 2: Enter the credit or charge for the interest rate chosen (including discount points, and LLPA s. Only one box may be checked. Wholesale loans the 1 st box may NEVER be selected. Block 4: Enter the charges for all title and escrow/closing agent fees. Block 5: Enter the amount on all purchases, regardless of who pays for it. Enter NA or $0.00on refinances. DO NOT LEAVE BLANK. Block 7: Enter the recording charges. Block 8: Enter all local, city, county and/or state transfer taxes. This amount cannot be added later & cannot increase without a valid COC (e.g. loan amount increases). Block 11: Enter insurance premium amount that must be purchased. Enter NA or $0.00 if loan is a refinance and insurance is not due at closing. Page 14 of 23

16 Complete the first column only. Columns 2 & 3 are optional. If your system permits, complete the first column only. The remaining columns are for the borrower to complete. Page 15 of 23

17 Good Faith Estimate Review and Documents Required for Disclosures Moving the loan through the GFE/Disclosure Process requires active participation by the Pacific One Lending (Pacific One) Wholesale team and the Broker. The initial step for the Broker is submitting the GFE for review to Impac s GFE HELP Desk matt@pacific1lending before issuing the GFE to the borrower and with enough time to ensure the GFE is provided to the borrower within 3 business days of the application taken date and uploading the GFE and loan application package to Impac s loan origination system. Send in the following information for review if the loan is not locked and prior to issuing the GFE to the borrower: GFE Review Cover Letter Fee Worksheet or Itemization for Amount Financed All pages of the GFE Settlement Service Provided (SSP) List, if applicable (if the borrower is permitted to shop for a service provider listed in Blocks 4, 5, or 6 the cost of the service on the SSP List must match the amount disclosed on the GFE) Send in the following information for review if the loan is locked within 24 hours of locking the loan and issuing the GFE to the borrower: GFE Review Cover Letter Fee Worksheet or Itemization for Amount Financed All pages of the GFE Settlement Service Provided (SSP) List, if applicable (if the borrower is permitted to shop for a service provider listed in Blocks 4, 5, or 6 the cost of the service on the SSP List must match the amount disclosed on the GFE) Lock confirmation showing the Brokers choice of Lender Paid or Borrower Paid Compensation. Impac s GFE HELP Desk review of the GFE before uploading the loan package to Pacific One: An indicating if the GFE was correct, or if the GFE requires corrections, will be sent to the Broker, the Jr. Account Manager and the Account Executive. If corrections are needed, the GFE Reviewer will also place a call to the Broker to review the corrections needed. Pacific One expects the Broker to upload the corrected GFE to Pacific One immediately. Not doing so can result in a cancelled lock. Prioritization is given to s sent to the GFE HELP Desk originating from the East Coast. Corrected GFEs received are reviewed immediately to ensure the Broker can issue the GFE to the borrower in a timely manner as require by RESPA/Regulation Z. Pacific One documents are provided to assist Brokers in completing an accurate GFE: The user instruction for completion of the 2010 GFE maps out instructions for each line and section of the GFE. The GFE important dates line 2 focuses on the date that is entered in the Important Dates section, Line 2 of the GFE. Look for examples at the end of this Announcement. Page 16 of 23

18 Documents needed for Pacific One to issue disclosures: Pacific One must send out disclosures within 3 days of accepting a loan origination package. Upload these documents to Pacific One: Wholesale Loan Submission form Upload the Fannie Mae 3.2 file Webtrac Signed and Dated initial loan application 1008 / Loan Transmittal AUS findings (DO/DU/LP) Complete Credit Report Initial GFE, all pages Redisclosed GFEs (all pages), including copies of any Change of Circumstance Acknowledgment, if applicable Fee Worksheet or Itemization of Amount Financed Settlement Service Provider List, if applicable Purchase Contract, if applicable Completed and signed Mortgage Broker/Loan Originator Compensation and Anti-Steering Acknowledgment Including the following forms, signed by the borrower, will allow the Broker to order the appraisal after Pacific One releases its initial disclosures and the MDIA 3-day waiting period has been met (refer to the RESPA TILA/MDIA Quick Reference Guide) : Borrower s Authorization Completed IRS Form 4506-T Intent to Proceed Loan packages uploaded with inaccurate GFE: If a GFE uploaded to Pacific One is determined to be inaccurate and/or incomplete, the loan number and applicable lock will be cancelled from Pacific One operating system. Loan packages registered with a Fannie Mae 3.2 file, but the initial loan documentation package has not been received and no disclosures were sent to the borrower: Brokers are allowed 2 business days to provide the documents that allow Pacific One to issue the appropriate disclosures as listed above. If not received, the Brokers Account Manager will notify the Broker when the loan and any lock associated with the loan are canceled from Impac s operating system. The loan will need to be resubmitted and relocked when the file is ready. Entering the correct Date for Line 2 for the initial GFE: The date reflected in Line 2 must reflect a minimum of 10 business days from the Date of the GFE (the date the GFE is provided to the borrowers). Saturdays, Sundays, or Federal Holidays do not count. Example: Date of GFE is 5/27/14 Date on Line 2 is 6/10/14 10 business days from the Date of the GFE shows 6/10/14 (Saturdays and Sundays are not counted and Day 1 starts on 5/28/14) Page 17 of 23

19 Entering the correct Date for Line 2 for subsequently issued GFEs: The date reflected in Line 2 remains unchanged, even with a valid change of circumstance (e.g., a floating loan being locked), unless an Intent to Proceed has not been obtained from the borrowers. Examples: Intent to Proceed obtained: Date of GFE is 5/27/14 Date on Line 2 is 6/10/14 Intent to Proceed was provided by borrower 5/27/14 Revised GFE issued on 5/29/14 due to rate lock Date on Line 2 remains the same 6/10/14 Intent to Proceed not obtained: Date of GFE is 5/27/14 Date on Line 2 is 6/10/14 Intent to Proceed not provided by borrower Revised GFE issued on 5/29/14 due to rate lock Date on Line changed to 6/12/14 Please contact (714) with any questions. Page 18 of 23

20 Additional Information - Wholesale Name of Originator Initial GFE: Name of Originator Section a. This box requires the name and address of the company preparing the GFE for the Name of Originator. This is not the loan officer s name. b. All corresponding details must be completed, including the phone number and address. Lock Extensions IMC policy assesses the costs associated with a lock extension to determine if the cause for the delay was controlled by the borrower and not a result of Client/Broker or IMC influenced delays. Your Adjusted Origination Charges Block 1: IMC policy specifies that this Charge cannot be modified (increased) for any reason other than an increase to the qualified loan amount that affects the Origination Charges mathematically. Your Charges for all other Settlement Services All charges associated with the transaction regarding these third party services must be represented in Boxes All charges must be disclosed regardless of who is responsible for paying. Example: Owner s title insurance in Block 5: If there is no charge (i.e., loan is a refinance), N/A or $0.00 must be entered. Homeowner s Insurance in Block 11: If there is no charge for an annual premium (i.e., loan is a refinance and it was already paid), N/A or $0.00 must be entered. Using the Shopping Chart All required information must be accurately populated as it related to This loan. Settlement Service Provider List If the borrower is permitted to shop for a third party service provider, the provider s name and charge must be disclosed in Block 6, otherwise enter N/A and $0.00. If a Service and Charge are disclosed in Block 6, or if the borrower is permitted to shop for services listed in Blocks 4 and 5 a Settlement Service Provider List disclosure must be provided to the borrower to the borrower with the GFE. Page 19 of 23

21 Change of Circumstance All borrowers must be provided a revised GFE, within 3 business days of first identifying a valid change of circumstances related to loan terms (rate lock, loan amount, etc.) by the lender or broker. If the application has already been submitted to Pacific One Lending then Pacific One will issue the revised GFE. If the application has not been submitted to Pacific One, then the broker will issue the revised GFE. Any changes to the GFE are required to be submitted to Pacific One for approval. Prior to sending a revised GFE to the borrower, the Broker must submit the Changed Circumstance Request form, any documents supporting the changed circumstance, Initial Good Faith Estimate, and revised Good Faith Estimate by to your Pacific One Account Manager. Please make sure the Changed Circumstance Request form is completed in its entirety, including all relevant details regarding the change. Only the items that are a direct result of the Changed Circumstance may change on the Good Faith Estimate. Note: With Acceptable changed circumstances, only the item(s) that would be affected by the changed circumstance may be adjusted on the redisclosed GFE. The following examples are not an exhaustive list. Acceptable Float to Lock a. Block 2 (charge/credit) for the interest rate b. Adjusted Origination Charge c. Important Dates d. Summary of your Loan (Loan Terms) Change in Loan Terms Discovery of additional documents that must be recorded GSE, FHA or Mortgage Insurance program changes, ONLY if you did not receive notice of such changes prior to issuing the GFE Parties are added to or removed from title Property is moved into or out of trust Property use change, ex. Owner-occupied to rental property Use of POA, if notified after GFE is issued Addition services needed, ex. additional pest, structural or other inspection, upgraded appraisal, certification, survey etc. Borrower s credit score changes Lock Extensions Appraised Value is different from Estimated Value (i.e. LTV changes, the loan amount remains the same, new loan level price adjustment). Non-Allowable If a GFE is issued without a property address, then later identification of a property address in and of itself will not be considered. Escrow waiver if the initial GFE stated there was no escrow account on the loan. Transfer Taxes are misquoted (i.e. the amount not accurate based on what the borrower typically pays) Owner s Title Insurance is misquoted or missing. Broker switching file to another Wholesale Lender PMI not disclosed or disclosed incorrectly Broker changing Lender or Borrower Paid Compensation PIW fee may not be added after initial GFE Compensation Page 20 of 23

22 Pacific One Mortgage Corp. Change of Valid Circumstance Matrix GFE Field Page 1 -Important Dates Page 1 -Summary of your loan Page 1 Escrow Account Information Block 1 Our Origination Charge Block 2 Your credit or charge for rate chosen Block A Adjusted Origination Charge Block 3 Required Services We Select Block 4 Title Services & Lenders Title Insurance Block 5 Owner s Title Insurance Block 6 Required Services you can shop for Block 7 Government recording charges Block 8 Transfer Taxes Block 9 Initial Deposit for escrow account Block 10 Daily Interest Charges Block 11 Homeowners Insurance Reason for Change of Circumstance Acts of God, War, Disaster, or Other Emergencies X X Loan Locked after GFE Provided X X X X X Borrower Requested Change to the Lock X X X X X Lock Period Expires X X X X X Credit Quality Change Due to NEW information X X X Received After Application Loan Amount Changes X X* X X X X X X X X Property Value Change X X X X X X X X X X Product Type/ Loan Program X X X X X X X Change Underwriting Conditions X X X X X Require Additional Services Property Type Change X X X X X X X X X X X Title/Binder Requires Additional Services/Conditions X X X X X X Occupancy Change X X X X X X X X X Unique Property Characteristics Unknown or undisclosed by Borrower Borrower Requested MI Program Change Borrower Requested Change to Escrow X X X X X X X X X X X X X X X X X X X X *May on increase Block 1 if a fee previously disclosed in block 1 is based on a percentage of the loan amount. Page 21 of 23

23 APPLICABILITY INITIAL DISCLOSURES REGULATIONS (RESPA, TILA-MDIA) Any federally related mortgage as defined under RESPA/Reg X, includes Reverse Mortgages. Purchase Money Loan: Must be provided to all applicant(s) no later than 3 general business days after receipt of an application. Refinance Transaction: Must be provided to all applicant(s)/owner(s) no later than 3 general business days after receipt of an application. RESPA- TILA MDIA Quick Reference Guide EXAMPLE Application received on Wednesday. Thursday = Day 1, Friday = Day 2, Monday = Day 3. Initial Disclosures must be provided by Monday. INFORMATION 1 st and 2 nd lien purchase money and refinance transactions (primary residence and second homes). Including FHA and VA. Excludes investment properties. Application defined as borrower s name, social security # for pulling credit, monthly income, property address, loan amount sought, estimated value of property. Once you have all 6 of these items for any one borrower, you have an application. General Business Days defined as any day the lender is open for business. The only fee that may be collected from the applicant(s)/owner(s) at application is a reasonable credit report fee. Applicant(s)/owner(s) include members of the applicant(s) family, & friends of the applicant(s) etc. FEES (3-DAY WAITING PERIOD) MAILED: After the initial disclosures, including the TIL & GFE, are mailed, AND the borrower has provided a signed Intent to Proceed, payment information may be obtained & processed to collect the appraisal fee after midnight of the 3rd business day. IN-PERSON: After providing the initial disclosures, including the TIL & GFE, in person to all applicant(s)/owner(s) AND obtained the borrowers signed Intent to Proceed, payment information may be obtained immediately & can be processed to collect the appraisal fee. E-DELIVERED: If Pacific One has received the download & consent to e-delivery by all applicant(s)/ owner(s) on a refinance transaction & all applicants on purchase money transactions, documentation showing the GFE was received, AND a signed Intent to Proceed, fees can be collected immediately & processed. MAILED: Initial Disclosures (including TIL and GFE) are mailed on Wednesday and the signed intent to proceed is received. Thursday = Day 1, Friday = Day 2, Saturday = Day 3, Monday = Day 4, payment information may be collected on or after Monday. IN-PERSON: Initial Disclosures are delivered in person to applicant(s)/owner(s) and signed Intent to Proceed is received on Wednesday. E-DELIVERED: Initial Disclosures are e- delivered on Wednesday. Thursday = Day 1. Friday, Day 2, Pacific One receives the download & consent to e-delivery, documentation showing GFE deemed received, AND the Intent to Proceed signed/dated by all applicant(s)/owner(s). Pacific One acknowledges receipt & may immediately authorize collection of fees & appraisal order. NOTE: cannot collect fees if the GFE is expired, or the intent to proceed has not been provided by the borrower. Business days defined to include all calendar days, except Sundays and specific Federal public Holidays. Mail is defined to include , fax, regular mail, express mail, and by courier. Cannot charge collect any fees other than a credit report fee until the borrower is deemed to have received both the GFE & TIL, AND provides a signed Intent to Proceed and the GFE has not expired. BE CAREFUL THE GFE & TIL MAY HAVE BEEN MAILED ON TWO DIFFERENT DATES It is not acceptable to obtain the applicant(s) credit card information for the purposes of paying for the appraisal or other fees even if it is not processed until the 4 th business day. The appraisal cannot be ordered until the signed Intent to Proceed is obtained from the borrower and no earlier than the 4 th business day. Page 22 of 23

24 REGULATIONS (RESPA, TILA-MDIA) EXAMPLE INFORMATION LOAN CLOSING (7-DAY WAITING PERIOD) After initial disclosures are provided to all applicants(s)/owner(s) by mail or in person, AND the signed Intent to Proceed has been obtained from the borrower, the loan can close on or after the 7 th business day. Initial disclosures are mailed on Wednesday & the signed Intent to Proceed has been provided by the borrower. Thursday = Day 1, Friday = Day 2, Saturday = Day 3, Monday = Day 4, Tuesday = Day 5, Wednesday = Day 6, Thursday = Day 7 loan can close Closing is defined as the date the applicant(s) signs closing documents. A new GFE and TIL must be provided anytime there is a valid change or circumstance. A new TIL must be provided anytime: RE-DISCLOSURE OF GFE and TIL * the APR on the initial TIL increases more than 1/8 th (1/4 th on ARMs). * the APR on the initial TIL decreases more than 1/8 th (1/4 th on ARMs) AND the finance charge increases more than $35.00 on a refinance or $ on purchase money. * the finance charge increases more than $35.00 on a refinance or $ on a purchase money IN PERSON After a corrected TIL is delivered in person or e-delivery to all applicant(s)/owner(s) as required, the loan can close on or after the 3 rd business day after delivery. Corrected TIL is delivered in person on Wednesday. Thursday = Day 1, Friday = Day 2, Saturday = Day 3 The loan can close on or after Saturday. 3- business day waiting period is required Do not need to wait to close if the TIL is redisclosed due to a finance charge increase only. E-delivery requires documentation showing applicant(s)/owners(s) download & consent of delivery. MAILED/ E-DELIVERY After a corrected TIL is delivered by mail to all applicant(s)/owners the loan can close on or after the 6 th business day. Exception: Loan can close on or after the 3 rd business day after corrected TIL is signed/dated by all applicant(s)/owner(s) & received by Pacific One. Corrected TIL is delivered by mail on Wednesday. Thursday = Day 1, Friday = Day 2, Saturday = Day 3, Monday = Day 4, Tuesday = Day 5 Wednesday = Day 6. The loan can close on or after Wednesday. Exception: Corrected TIL is mailed on Wednesday. On Thursday, Pacific One receives a fax from the Broker with the corrected TIL signed/dated. Friday = Day 1, Saturday = Day 2, Monday = Day 3. Loan can close on or after Monday. 3 business days waiting period is required for delivery of redisclosed TIL plus additional 3- days for waiting to close. RE-DISCLOSURE OF THE GFE When the rate goes from a float to a lock, a new GFE must be issued to the borrower. Anytime there is valid changed circumstance or borrower requested change a new GFE must be issued to the borrower within 3 general business of receiving the change/request. Broker received borrower requested change on Tuesday. Lender must be notified by Wednesday = Day 1, Tuesday = Day 2, New GFE & Notice of Intent to Proceed must be delivered by Friday = Day 3 If loan has been submitted to Pacific One, complete the COC Request form and provide to Pacific One within 24 hours. Pacific One to review and reissue GFE is approved. If the loan has not been submitted to Pacific One Broker must issue revised GFE. If the borrow has not already provided their intent to proceed, must also send a new Intent to Proceed and a new 10- business day waiting period. Page 23 of 23