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DIRT
&TILA RESPA
Integrated Disclosures
Presented by:Lacy Smith WallaceKAAR Affiliate MemberRegions Bank
Slide 2
SPECIAL INFORMATION BOOKLET
LEARNING OBJECTIVES
CLOSING DISCLOSURE
SUMMARY
LOAN ESTIMATE
INTRODUCTION AGENDA
Slide 3
SPECIAL INFORMATION BOOKLET
CLOSING DISCLOSURE
LOAN ESTIMATE
AGENDA
introduction
SUMMARYINTRODUCTION
introduction
4
GFE TIL
BACKGROUND
HUD-1
introduction
5
BACKGROUND
2010: RESPA changes
2011: TILA changes
DODD FRANK ACT 2013:
Final Regs published
Oct 3, 2015: New Requirements
CFPB
introduction
6
WHICH LOANS ARE AFFECTED?
Applies to:– Residential Mortgages– HELOANS
Does not apply to:– Home equity lines of credit (HELOCs)– Certain no-interest housing assistance programs– Reverse mortgages– Loans for personal property not attached to real estate
(e.g., houseboat or manufactured home)
introduction
7
NEW DOCUMENTS
GFE Initial TILLoan
Estimate+ =
introduction
8
NEW DOCUMENTS
Final TILClosing
DisclosureHUD-1 + =
introduction
9
SPECIAL INFORMATION BOOKLET
Old New=
Slide 10
SPECIAL INFORMATION BOOKLET
CLOSING DISCLOSURE
AGENDAINTRODUCTION SUMMARY
LOAN ESTIMATE
loan estimate
loan estimate
11
PURPOSE
Discloses key features, costs, and risks
Combines GFE and initial TIL
Is based on best information available
loan estimate
12
WHAT IS AN “APPLICATION”?
Includes six data elements:– Name– Income– Social Security number– Property address– Estimate of property value– Loan amount
Standardizes definition for all Lenders
loan estimate
13
TIMING REQUIREMENTS
No change in timing requirements– “Business day” still includes Saturdays
Send by third business day after app received(Unless app denied or withdrawn within 3 days)
Deliver at least seven business days before closing
loan estimate
14
FEE & DOCUMENT COLLECTION
Mirrors current policy
Borrower must receive Loan Estimate before:– Payment collected– Requiring documentation (e.g. Sales Contract)
Note: Borrowers can still offer docs voluntarily
Lender must document borrower’s intent to proceed
loan estimate
15
FEE TOLERANCES
Same three tolerance categories:– Fees that cannot change– Fees that can increase by a limited amount (i.e., 10%)– Fees that can change
Certain fees have changed categories:– Fees paid to third parties if consumer not permitted to shop
• Appraisal• Credit Report• Flood Certificate• Tax Certificate• Some transaction specific fees (e.g., CP inspections)
loan estimate
16
LENDER CREDITS
Cannot decrease (Loan Estimate vs. Closing Disclosure)
Exception: When rate is locked/re-locked after initial Loan Estimate provided
loan estimate
17
REVISED LOAN ESTIMATE
Permitted when a “changed circumstance” occurs– Required within three business days
Permitted when the interest rate is locked
Must be received at least four business days prior to closing
Slide 18
CLOSING DISCLOSURE
AGENDAINTRODUCTION
LOAN ESTIMATE
SUMMARY
SPECIAL INFORMATION BOOKLET
special info booklet
special info booklet
19
PURPOSE
Provides basic information about the mortgage process
Required for all purchase money transactions– Including 1st position HELOCs– Alternative booklets available for
HELOCs
special info booklet
20
TIMING REQUIREMENTS
No change in timing requirement– Provided with initial Loan Estimate
Not required if:– If application denied or withdrawn within the three-day period
Slide 21
AGENDAINTRODUCTION
LOAN ESTIMATE
SUMMARY
SPECIAL INFORMATION BOOKLET
CLOSING
DISCLOSURE
closing disclosure
closing disclosure
22
PURPOSE
Replaces HUD-1 and “final” TIL
Provides information helpful in understanding loan costs
Provided by the creditor
closing disclosure
23
TIMING REQUIREMENTS
Must be received three business days prior to closing– Saturdays included– Receipt date dependent on delivery method
Exceptions:– Seller’s copy– Personal financial emergency
closing disclosure
24
Thurs. Fri. Sat. Sun. Mon. Tues. Wed. Thurs.REC’D
CLOSESENT
X
32103210
TIMING REQUIREMENTS: EXAMPLE 1Sent (No “Early Receipt” date)
closing disclosure
25
Thurs. Fri. Sat. Sun. Mon. Tues. Wed. Thurs.REC’D
SENT
X
10
CLOSE
3210
TIMING REQUIREMENTS: EXAMPLE 2Emailed (With “Early Receipt” date)
closing disclosure
26
REVISIONS BEFORE CLOSING
New three day wait period required when:– APR outside of standard tolerances– Loan product changes (Fixed to ARM)– Prepayment penalty is added
New three day wait period NOT required when:– Changes made outside of 3 listed above
(Must be available for inspection 1 day before closing)
closing disclosure
27
MISCELLANEOUS REQUIREMENTS
Upcharges not allowed
Fee cannot be charged for preparing Closing Disclosure
Slide 28
AGENDAINTRODUCTION
LOAN ESTIMATE
SPECIAL INFORMATION BOOKLET
CLOSING DISCLOSURE
SUMMARY
summary
summary
29
WHAT ARE THE MAJOR CHANGES?
New disclosures:– Loan Estimate– Closing Disclosure
Revisions to Special Information Booklet
Reclassified categories of certain fees
New waiting period for Closing Disclosures
summary
30
HOW CAN YOU HELP?
Consult lender when establishing Contract closing date
Provide Closing Agent Name at time of Contract
Encourage customer to obtain Insurance quickly
Assist in setting appropriate expectations with customer– Understand required waiting periods– Understand impact changes can have on closing
Encourage customer to use eConsent to receive Disclosures via email
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