TILA RESPA Integrated Disclosures Jimmy Vuong Branch Relations Manager jvuong@afncorp.com Rev. 03/22/2017 American Financial Network, Inc. All Rights Reserved.
The Beta is Open Please see Encompass Newsflash #80 Encourage your staff to familiarize themselves with the new screens Feedback is more than welcomed Send to jvuong@afncorp.com P: 2
The Change is going to come Originally set for August, now has been moved to October 3 rd 2015 Working closely with Ellie Mae as they finalize changes made for the new process TRID does not apply to: Creditors that make <6 mortgages a year HECM HELOC Loans secured by mobile home or a dwelling not attached to real property P: 3
The Big Changes Two new disclosures Loan Estimate (replacing GFE and TIL) Closing Disclosure (replacing Final TIL and HUD-1) Liability Lender is liable for both disclosures. CD: Lender is ultimately responsible for the accuracy of the information as opposed to the process we have now with the HUD-1 Recordkeeping Requirements Keep LE for 3 years Keep CD for 5 years after consummation P: 4
Changes That Affect You Timing is key: Initial LE must be disclosed within 3 working business days of application Last disclosed LE must be received 4 specific business days before consummation Last disclosed CD must be received 3 specific business days before consummation P: 5
Tolerances Have Changed Zero Tolerance Increase o Creditor Paid To Amounts o Mortgage Broker Paid To Amounts o Affiliate of Creditor or Broker Paid To Amounts o Unaffiliated Third Party if Shopping Not Allowed o Transfer Taxes 10% Aggregate Increase Allowed o Unaffiliated Third Party if Shopping Allowed o Recording Fees o Services for Which Consumer May But Does Not Shop Variations Permitted o Prepaid Interest o Property Insurance Premium o Amounts Placed in Escrow o Charges Paid to Third Party Service Providers Not Included on Written List o Charges Paid to Third Party Service Providers Not Required by the Creditor o Changed Circumstance Applies P: 6
How to count: Working Business Days: Days that AFN is open to the public for carrying out substantially all of its business functions. Generally, Monday through Friday excluding all AFN holidays outlined in Employee Manual Specific Business Days: all calendar days except Sundays and legal public holidays. Rule of thumb, days that the United Postal Service is open. How to count days: The day the event occurs is day zero and every day after day zero is counted on. For example, application is taken on Monday, so the last day to prepare and send disclosures is Thursday. Day 00 Monday Received Application Day 01 Tuesday Day 02 Wednesday Day 03 Thursday Last day to prepare and send initial disclosure package P: 7
Mailbox Rule These disclosures are presumed to be received by the borrower using the mailbox rule if there are no signatures. The preparation date on the disclosure is the presumed date the disclosure is mailed. It takes 3 specific business days to get to the borrower We can prove that the borrower received the disclosures sooner with a signature and date to begin the waiting period Waiting period begins from the borrowers acknowledgement date Proof is required P: 8
Deep Dive into the Loan Estimate
Application You have an application when you have these pieces of information: 1. Borrower s name 2. Borrower s income 3. Borrower s social security number 4. Subject property address 5. Estimate value of the property 6. Mortgage loan amount sought P: 10
LE Time Tables You must disclose within 3 working business days of application The earliest consummation date is 7 specific business days from disclosure of the initial disclosure package that includes the LE Last disclosed LE must be received 4 specific business days before consummation P: 11
LE Page 1 General Information Loan Terms Projected Payments Costs at Closing Most notably here, the aggregate adjustment is not included P: 12
LE Page 2 Fees will appear in alpha order Closing Costs: Origination Costs Services cannot shop Services can shop Other Costs: Taxes and govt. fees Prepaids Initial Payments Other P: 13
LE Page 3 Lender/LO Info APR Total interest percentage Other Misc Disclosures P: 14
Deep Dive Into the Closing Disclosure
Closing Disclosure Needs to be disclosed when we are going to close in good faith The trigger is PTD Reviews P: 16
CD Waiting Periods The borrower must receive the disclosure 3 specific business days before consummation P: 17
Re-disclosing CD We need to re-disclose any changes to the loan but the consummation waiting period only resets when: APR increases by more than 0.125% Loan program changes Prepayment penalty is added P: 18
CD Page 1 General Information: Loan Terms Projected Payments table Costs at Closing P: 19
CD Page 2 Closing Cost Details Loan Costs Other Costs *Section Subtotals *All fees are alpha order P: 20
CD Page 3 Calculating cash to close Summaries of transaction P: 21
CD Page 4 Assumption Demand Feature Late Payment Neg. Am. Partial Payment Policy Security Interest *Essentially the same info that the Reg Z TIL discloses P: 22
CD page 5 Total Payments Finance Charge Amount Financed APR Total Interest Charge Additional Disclosure Info P: 23
Questions and Comments Jimmy Vuong Branch Relations Manager jvuong@afncorp.com P: 24