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It s a Whole New World TILA/RESPA Integrated Disclosures Theresa Reinke, LOANLINER Compliance Consultant, CUNA Mutual Group
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Agenda Overview of Integrated Disclosure Rule New and different disclosures Examples Implications Impacts Action Steps to do now!
Integrated Disclosures Combination of RESPA and TILA disclosures Purpose is to create disclosures that are easier to understand and use Scope: Most closed-end consumer credit transactions secured by real property Effective date is August 1, 2015
Integrated Disclosures Loan Estimate Initial TIL Disclosure RESPA Good Faith Estimate Provided 3 business days after application Closing Disclosure Final TIL Disclosure HUD-1 / HUD-1A Received 3 business days before consummation
It s a Whole New World! Documents are very dynamic at the loan level Disclosures based on loan type & purpose Different requirements for loans with or without a seller If disclosure is not required, it cannot show Cannot use n/a or leave something blank New Disclosures and Calculations New Documents New data fields New required calculations Testing and Training
Loan Estimate Page 1
New Calculations and Fields Page 1 ** Green handle differently; Yellow new **
ARM Payment Schedule Page 1
Prepayment and Balloon Payment Page 1
Loan Estimate Page 2
Closing Costs Page 2
Optional AP and AIR Tables Page 2
Loan Estimate Page 3
New Fields and Calculations Page 3
Variable Disclosures No Signature Line Page 3 No Sig line Refi Only
We re done with the Loan Estimate! Now onto the Closing Disclosure!
Closing Disclosure Page 1 Page 1 Very similar to the Loan Estimate New Fields: Date Issued Disbursement Date Settlement Agent File # MIC #
Closing Disclosure Page 2
Closing Disclosure Page 2 - Loan Costs Three cost categories Tolerances New columns for Paid Before Closing & Paid by Others
Example of Calculating Tolerances Borrower picks pest inspector from the creditor s list of providers.
Completing the Closing Disclosure Loan Costs Moves to Section B and needs to be in alphabetical order
Example of Calculating Tolerances Recalculate the Loan Estimate Closing Costs Moved to B. Re-total
Closing Disclosure Page 2 Other Costs
Closing Disclosure Page 3
Closing Disclosure Page 4
Closing Disclosure Page 5
That s it!
Call to Action Business decisions Types of loan products Fees and charges Tolerance levels System and form provider on track Working with business partners Plan for timely delivery of disclosures Review application procedures Implementation Your team Update policies, products, procedures Testing Training, training, training
Business Decisions Develop a comprehensive plan Document business decisions Lending Programs Purpose Loan Type Features interest only, negative amortization, skip payments, seasonal or optional payments CU departments and staff impact Fees and Charges New procedures Identify pain points Understand tolerance requirements
Tolerance Changes Zero Tolerance Fees to lender or affiliate New - Fees to third party provider if the member could not shop for service Transfer taxes 10% Aggregate Member can shop for third party service Give service provider list Member picks provider from list Recording fees No Tolerance Limit cost can change For services required and member chooses service provider not on the list For services creditor does not require
Working with... System & Form Providers New fields and calculations Dynamic nature of disclosure Timeframe Service Providers Determine which services members can/cannot shop for Zero tolerance if cannot shop Examine current accuracy Determine info needed for LE Agreements on fees Provide list in member s area Contact information Settlement Agents CU is responsible for timely delivery of Closing Disclosure Mail Closing Disclosure a week in advance
Timely Delivery Loan Estimate Delivered or placed in the mail 3 rd business day after application Closing Disclosure Received at least 3 business days before consummation Two definitions of business days Process for documenting delivery Application process Application - 6 pieces of information Consumer s name, income, SS# Property address and value Mortgage loan amount
Implementation Your team Who is on the team? Who is in charge? Impact to different departments Compliance resources Third-party partners who can help Timeframes Update products, policies and procedures Test system changes and documents Train staff on products, policies, procedures, systems and documents Do all of this while evaluating compliance with the first 6 mortgage rules, meeting mortgage lending goals and serving members!
Resources CFPB Web site www.consumerfinance.gov/regulations 2013 mortgage rules implementation TILA RESPA Integrated Disclosure Rule LOANLINER Customers www.loanliner.com/realestate Email loanliner@cunamutual.com Call 800.356.5012 Webinar Series Theresa Reinke LOANLINER Compliance Consultant 800.356.2644, x665.8143 theresa.reinke@cunamutual.com
Thank You Theresa Reinke LOANLINER Compliance Consultant CUNA Mutual Group 800.356.2644, x665.8143; theresa.reinke@cunamutual.com CUNA Mutual Group, 2014 Reproduction, adaptation or distribution without permission of CUNA Mutual is prohibited. LL-1009174.1-0914-1016
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