Building for the Future 2021 Lending Compliance School

- 1 -© 2021 Professional Bank Services, Inc.

2021 Lending Compliance School

Building for the Future

April 26 – 29, 2021Virtual Seminar

Day 2


What You Will Learn

Day 1

• Regulation B (ECOA)• Coverage

• Key definitions

• Prohibition on discrimination

• Joint intent

• Adverse action

• ECOA & FCRA

• Government monitoring information

• Appraisals

• Fair Credit Reporting Act (FCRA)

• Fair Housing Act (FHAct)

Day 2 Day 3

• Regulation Z - TRID• Consumer Mortgage

Loan Process

• Coverage

• Key definitions

• Overview of forms

• Disclosure timing

• Fee Placement

• Tolerances

• Changed circumstances

• Regulation Z (TILA)• Open-end credit

Day 4

• Flood insurance

• RESPA

• UDAP/UDAAP

• eSIGN

• Pre-recording

• To Be Available• Lending to servicemembers

• Private mortgage insurance (PMI)

• Regulation Z (TILA)• Coverage

• Exemptions

• Record Retention

• Key Definitions

• Closed-end• Closed-end Disclosures

• Right of rescission

• Prohibited acts & practices

• Valuation independence

• Ability to Repay (ATR)

• Qualified Mortgages (QM)


➢ Coverage

➢ Exemptions

➢ Record Retention

➢ Key Definitions

➢ Closed-end

Regulation Z (12 CFR 1026)

2

Module 4


Regulation Z: Truth-in-Lending Act (TILA)

• Purpose• To promote the informed use of consumer credit

• To ensure consumers are provided with greater and more timely information, including required disclosures, on the nature and costs in a consumer credit transaction

• To provide consumer protections in a credit transaction

• Consumer credit• Credit extended to a Consumer (a Natural Person) for a Consumer purpose

• Generally, a natural person

• Personal, family, household purposes

4-1


Regulation Z – Quick Look

• Subpart A – General• Definitions

• Exemptions

• Finance charge

• Subpart B – Open-end Credit

• Subpart C – Closed-end Credit

• Subpart D – Miscellaneous• Record retention, effect on state law, limitations on rates

• Subpart E – Special Rules for Certain Home Mortgage Transactions

• Subpart F – Private Education Loans

• Subpart G – Credit Card and Open-end offered to College Students

• Appendices

• Official Commentary


Coverage of Regulation Z

• Applies when all (4) of the following conditions are met:1. Credit is offered or extended to consumers;

2. Credit is extended regularly (more than 25 times in the preceding or current calendar year or more than 5 times for transactions secured by a dwelling);

3. The credit is subject to a finance charge or is payable by written agreement with more than (4) payments; AND

4. The credit is primarily for personal, family or household purposes


Exempt Transactions

• Agricultural Credit, even if the transaction includes a dwelling

• Consumer Credit over $58,300 effective 1-1-2021• 2020 was also $58,300

• Unless, the credit is secured by any type of real property, secured by personal property used by the consumer as their principal dwelling (mobile home, houseboat, etc.)

• Note: A private education loan IS subject to Reg Z, special disclosures required with wait periods, UNLESS the private education loan is an open-end credit or the loan is secured by any real property or a dwelling


Exempt Transactions

• Organizational Credit• Extension of credit to other than a natural person (corporation, partnerships,

associations, etc.)• 2 very limited and specific exceptions

• TRID – trusts for tax and/or estate planning purposes

• Business credit cards provided to > 10 employees – Billing error rights extended


Regulation Z Record Retention

• Generally, evidence of compliance under Reg Z must be retained for 2 years after the date disclosures are required to be made or action is required to be taken

• However …• Compensation paid to a loan originator must be retained for 3 years;

• A loan originator organizations must maintain records to evidence all compensation it receives from a creditor or a consumer for 3 years

• Evidence of compliance with the ability to repay determination requirements must be maintained for 3 years after consummation of a covered transaction

• Evidence of compliance with the requirements regarding providing the Loan Estimate and Closing Disclosure must be retained for 3 years after the later of:• Date of consummation,

• Date disclosures are required to be made, or

• Date the action is required to be taken

• A creditor must retain each completed Closing Disclosure, and all documents related to such disclosures, for 5 years after consummation

4-4


Key Definitions

4-6


Application

• The submission of a consumer's financial information for the purposes of obtaining an extension of credit

• TRID applications• Consumer's name

• Income

• Social security number to obtain a credit report

• The property address

• An estimate of the value of the property

• Loan amount

4-6


Consumer

• A cardholder or natural person to whom

consumer credit is offered or extended• For purposes of rescission, the term also includes a

natural person in whose principal dwelling a security

interest is or will be retained or acquired, if that

person's ownership interest in the dwelling is or will be

subject to the security interest

• For purposes of §§1026.20(c) through (e), 1026.36(c),

1026.39, and 1026.41, the term includes a confirmed

successor in interest

4-6


Credit

• Open-end Credit• Consumer credit extended by a

creditor under a plan in which:• The creditor reasonably contemplates

repeated transactions;

• The creditor may impose a finance charge from time to time on an outstanding unpaid balance; and

• The amount of credit that may be extended to the consumer during the term of the plan (up to any limit set by the creditor) is generally made available to the extent that any outstanding balance is repaid

• Closed-end Credit• Consumer credit other than “open-

end credit”

4-18


Business Day

• General Definition• Any day the financial

institution is open to the

public for carrying

substantially all of its business

• Not further defined

• Do not take loan applications

• Do not close loans

• Memo post deposits

• Specific Definition• All calendar days except Sundays

and certain legal public holidays

• New Year’s Day, January 1;

• Martin Luther King, Jr.’s Birthday,

the 3rd Monday in January;

• Washington’s Birthday, the 3rd

Monday in February;

• Memorial Day, the last Monday in

May;

• Independence Day, July 4;

• Labor Day, the 1st Monday in

September;

• Columbus Day, the 2nd Monday in

October;

• Veteran’s Day, November 11;

• Thanksgiving Day, the 4th Thursday

in November; and

• Christmas Day, December 25

•

•

•

•

•

•

•

•

4-6


Finance Charge (12 CFR 1026.4)

• The cost of consumer credit as a dollar amount• Includes any charge payable directly

or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit

• Does not include any charge of a type payable in a comparable cash transaction

4-7


Finance Charge

• Why so important• Disclosures

• Consequences• Is a material disclosure

• Civil liability


• Reimbursement for understatements

- 17 -© 2021 Professional Bank Services, Inc.4/26/2021 17

Clic

k to

ed

it M

aste

r ti

tle

styl

e


Fin

ance

Ch

arge

Gu

ide This chart is

available in federal exam

manuals


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Fin

ance

Ch

arge

Gu

ide

IBA Handout


Finance Charges: Always include

• Finance charges INCLUDE, unless otherwise excluded, the following:• Any charge payable directly or indirectly by the consumer and imposed directly or

indirectly by the creditor as an incident to or a condition of the extension of credit;

• Charges by third parties

• Closing agent charges

• Mortgage broker fees

4-7


Finance Charges: What’s included

• Examples of finance charges included;• Interest;• Service, transaction, activity and carrying charges;• Points, loan fees, finder’s fees and assumption fees;• Premiums or charges for any guarantee or insurance which

protects the creditor against the consumer’s default or other credit loss;

• And UNLESS otherwise excludable; • Appraisal, investigation, credit report fees, premiums or other charges for

credit life, A&H or loss of income, loss of or damage to properties;• Inspection and handling fees for staged disbursement of construction loan

proceeds;• A tax imposed on a creditor, if the creditor imposes the charge on the

consumer

4-8


Finance Charges: Always Excluded

• Finance charges EXCLUDE the following:• Any charge of a type payable in a comparable cash transaction i.e. Taxes, license fees

or registration fees, discounts available to a particular group of consumers that meet certain criteria such as having accounts at a particular FI

• Costs of doing business - taxes imposed on the creditor and creditor absorbs the cost

• Taxes are not finance charges- stamp tax, property tax, state or local tax

4-9


Finance Charges Always Excluded

• Examples of charges excluded:• Application fees charged to ALL applicants for credit

• Charges for actual or unanticipated late payment

• Charges for paying items that overdraw an account

• Participation fees

• Seller’s points- even if the buyer pays

4-10


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Fin

ance

Ch

arge

s: E

xem

pt

ifce

rtai

n c

on

dit

ion

s ar

e m

etIBA Handout

Examples


Finance Charges: Real Estate Related Fees

• 1026.4(c)(7) Real Estate Related Fees• In transactions secured by real property or in a residential mortgage (purchase money or

initial construction of the consumer’s principal dwelling, the following fees are excluded, if fees are bona fide and reasonable in amount• Fees for title exam, abstract, title insurance, surveys• Fees for preparing deeds, mortgages, settlement and similar documents• Notary and credit report fees• Appraisal and inspection fees (i.e., pest, flood hazard determination) service must be performed prior to

closing)• Amounts required to be paid into escrow or trustee accounts• Credit Insurance, Property Insurance, Debt Cancellation and Debt Suspension,if certain conditions are

met• Property insurance premiums - if certain conditions are met• Voluntary debt cancellation or debt suspension fees - if certain conditions are met• Security interest charges - taxes/fees to public officials for lien perfection, tax levied on documents

securing the indebtedness

4-10


Prepaid Finance Charge

• A finance charge paid separately • In cash or by check before or at consummation or withheld from the proceeds of the

credit at any time

• Examples of typical prepaid finance charges include:• Buyer’s points

• Service fees

• Loan fees

4-14


Finance Charge Tolerance

• For closed-end• Not secured by real property or a dwelling

• $5 more than or less than the actual finance charge if the amount financed is $1,000 or less

• $10 more than or less than the actual finance charge if the amount financed is more than $1,000

• Secured by real property or a dwelling – cannot be understated by more than $100 (an overstated FC is always accurate)

• Right of rescission – cannot be understated by more than $35 in a foreclosure action

4-14


Finance Charges

• Whenever you add a new fee for credit• Always

• Always

• Always

• Verify whether or not it is a finance charge

Examiner Feedback


Annual Percentage Rate

• Cost of credit, expressed in the terms of a yearly rate

• Calculation• Closed-end

• Appendix J – Reflects the actuarial method• Under the actuarial method, at the end of each

unit-period (or fractional unit-period) the unpaid balance of the amount financed is increased by the finance charge earned during that period and is decreased by the total payment (if any) made at the end of that period

• https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/J/

• FFIEC APR Tool: https://www.ffiec.gov/examtools/FFIEC-Calculators/APR/#/accountdata

4-15

https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/J/

https://www.ffiec.gov/examtools/FFIEC-Calculators/APR/#/accountdata


Annual Percentage Rate

• Why important• Disclosures

• Use for APR/APOR comparisons

• Consequences• Is a material disclosure

• Civil liability


• Reimbursement for understatements

• If calculating the APR incorrectly, then may affect APR/APOR comparisons

4-15


Annual Percentage Rate Tolerance

• Closed-end• General

• Regular - .125 above or below

• Irregular - .25 above or below

• Includes transactions with multiple advances (e.g., construction), initial/premium ARM

• Transactions secured by real property or a dwelling, the rule provides additionaltolerances• If the APR is based on the finance charge, and the finance charge is accurate, then the APR will be

accurate

• If the disclosed finance charge is understated, and the disclosed APR is also understated but is closer to the actual APR than the rate that would be accurate had it resulted from the understated finance charge

4-16


Closed-end Disclosures

4-18


Closed-end loans (non-TRID)


TIL Statement

• Truth-in-Lending Statement (the “TIL”)• For any closed-end consumer credit transactions not secured by real property or a cooperative unit, a

creditor must provide the consumer a Truth-in-Lending Statement

• Must be made before “consummation” of the transaction, i.e., before the time that a consumer becomes contractually obligated on a credit transaction

• Format• Required disclosures must be clear and conspicuous, in writing, and in a form that the consumer may keep

• Although no minimum type size is mandated (except for the interest rate and payment summary for mortgage transactions), the disclosures must be legible

• The disclosures shall be grouped together, shall be segregated from everything else, and shall not contain any information not directly related to the disclosures required on the TIL Statement

• The terms “finance charge” and “annual percentage rate,” when required to be disclosed together with a corresponding amount or percentage rate, must be more conspicuous than any other disclosure, except the creditor’s identity

4-24


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Au

to, B

oat

, Mo

bile

Ho

me

Referred to as the “Fed Box”

❑ Required Deposit: The annual percentage rate does not take into account your required deposit


Clic

k to

ed

it M

aste

r ti

tle

styl

e


TIL

Dis

clo

sure

for

Clo

sed

-en

d

Loan

s (n

on

-TR

ID)

• Disclosures must be clear, conspicuous, and grouped together or segregated as required, in a form the consumer may keep

• Disclose:

• Identity of the creditor

• Amount financed

• Itemization of amount financed

• Finance charge, including description such as “the dollar amount the credit will cost you”

• Brief description of the APR

• Variable rate information

• The circumstances under which the rate may increase;

• Any limitations on the increase;

• The effect of an increase; and

• An example of the payment terms that would result from an increase

• Payment schedule: number, amounts, and timing of payments scheduled to repay the obligation

• Total Payments, including a brief description such as, “the amount you will have paid when you have made all scheduled payments”

• If transaction involves a single payment (bullet pay), need not disclose the total of payments

• Demand feature

• Description of total sales price in a credit sale

• Late payment amount or percentage

• Prepayment penalty

• Description for security interest

• Insurance and debt cancellation, if applicable, in order to carve out as a finance charge

• Certain security interest charges, if applicable, in order to carve out as a finance charge

• Contract reference

• Information about nonpayment, default, the right to accelerate the maturity of the obligation, and prepayment rebates and penalties

• Required deposit, including statement that the annual percentage rate does not take into account your required deposit

• For mobile home only loans, interest rate, payment summary


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Am

ou

nt F

inan

ced

• Itemization of amount financed must be provided, separate from the other disclosures• Must include:

• Amount of any proceeds distributed directly to the consumer in the form of cash, check or deposit

• Amount credited to any loan account the consumer has with the creditor

• Any amounts paid to other persons by the creditor on the consumer's behalf• Those persons are identified by name, except that public officials, government agencies, credit

agencies, appraisers and insurance companies can be described in general terms

• The prepaid finance charge

• At creditor's option, this may be further itemized and described

4-26


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Vari

able

Rat

e

Only required if rate can increase after closing/consummation

4-27


Required Deposit (12CFR 1026.18(r))

• A required deposit, with certain exceptions, is one that institution requires consumer to maintain as a condition of the specific credit transaction

• Including a compensating balance or a deposit balance that secures the loan

• A required deposit is NOT a deposit that earns at least 5 percent (>5%) per year

• Effect of a required deposit• NOT Reflected in the APR• NOT a finance charge since it is eventually released to the consumer

• Must disclose • “The annual percentage rate does not take into account your required deposit”

4-36


Personal Secured with Certificate of Deposit/Deposit Account

• Usually a separate agreement

• Not a hold notice

• Be clear as to lack of availability of funds• Entire amount for the term or rolling reduction as principal paid down

• Ensure no debit card or checks on the account

• Ensure no transfer from the account

• Ensure may not be used for OD fund transfers

• Make certain that your system can actually hold the funds, alerts to staff if attempt to withdraw

FYI


➢ Consumer Mortgage Loan Process

➢ Coverage

➢ Key definitions

➢ Overview of forms• Purpose• Product• AP and AIR tables

➢ Disclosure timing

➢ Fee Placement

➢ Tolerances

➢ Changed circumstances

Regulation Z - TRID

4-36


TRID Consumer Mortgage Loan Process

Prior to Application Initial Communication Application Intent to Proceed

Loan Processing / Underwriting

Changed CircumstanceConsummationServicing

IntroModule


Key Coverage Summary

LOAN TYPE TRID DISCLOSURESGENERAL TILA DISCLOSURE

REQUIREMENTS

Closed-End Consumer Credit Secured by Real Property YES NO

• 25-Acre Loans YES NO

• Construction-Only Loans YES NO

• Vacant-Land Loans YES NO

• Family estate and tax planning entities (e.g.,Hamilton Family Trust) IF for consumerpurpose

Yes No

Reverse Mortgage NO Sec. 1026.33

HELOCs NO Sec. 1026.40

Chattel-Dwelling Loans(using some sort of movable personal property—possessions other thanland, buildings, or any permanent fixture—as security)

NO YES

Mobile Home Only (no dirt) NO Sec. 1026. 18

FYI


TRID Coverage

No DIRT = No TRID

FYI


Record Retention

• Loan Estimate• Must maintain records of compliance with LE for (3) years after the later

of:• Date of consummation,

• Date disclosures are required to be made, or

• Date the action is required to be taken

• Closing Disclosure• Must maintain records of compliance with CD for (5) years after

consummation • Includes all documents related to CD

• Transfer of Servicing• If sell, transfer or otherwise dispose of interest in a mortgage and no

longer services the loan,• Must provide a copy of Closing Disclosure to new servicer as part of loan file

• New servicer required to retain CD for remainder of 5-year period

• Originator must still retain for 5-year period after consummation

4-5


TRID Key Definitions

4-36


Key Definitions

• TRID Application1. Name2. Monthly income3. SSN for pulling credit report4. Property address5. Estimated value of the property 6. Loan amount

• Triggers timing for Loan Estimate disclosure• No additional items permitted to be considered an “application” for triggering the

requirement to provide LE

• May add additional requirements for credit-decisioning • But not for providing the Loan Estimate


Key Definition: Business Day

• General Definition• Any day the financial

institution is open to the

public for carrying

substantially all of its business

• Not further defined

• Do not take loan applications

• Do not close loans

• Memo post deposits

• Specific Definition• All calendar days except Sundays

and certain legal public holidays

• New Year’s Day, January 1;

• Martin Luther King, Jr.’s Birthday,

the 3rd Monday in January;

• Washington’s Birthday, the 3rd

Monday in February;

• Memorial Day, the last Monday in

May;

• Independence Day, July 4;

• Labor Day, the 1st Monday in

September;

• Columbus Day, the 2nd Monday in

October;

• Veteran’s Day, November 11;

• Thanksgiving Day, the 4th Thursday

in November; and

• Christmas Day, December 25

•

•

•

•

•

•

•

•


Applying “Business Day”

General Definition

• The general definition applies to

delivering or placing in the mail the:

• Loan Estimate,

• Special Information Booklet, and

• Any revised Loan Estimate; and

• The time period in which the consumer

must respond with an intent to proceed

before closing costs expire

Specific Definition (aka “Precise Rule”)

• The specific definition applies to the:• Seven-business-day waiting period from delivery or

mailing of early disclosure (Loan Estimate) to consummation;

• Early disclosure (Loan Estimate) considered received three business days after delivery or mailing;

• Restriction on imposition of fees (other than credit report) within three business days of receipt of early disclosure (Loan Estimate);

• Receipt of revised early disclosure (Loan Estimate) prior to consummation;

• Provision of final disclosure (Closing Disclosure) three business days prior to consummation; and

• Final disclosure (Closing Disclosure) considered received three business days after delivery or mailing

4-37


Key Definition: Purpose

• Consumer’s intended use for the credit

• Purchase

• Refinance

• Construction

• Home Equity Loan

• If the purpose is not known, the

creditor may rely on the consumer’s

stated purpose

“Investment” is notan option for loan

Purpose field

4-68


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Loan

Pu

rpo

se W

ater

fall

Met

ho

do

logy


Key Definition: Product

• Comprised of (2) features• Loan Features

• Interest Rate Features

• As applicable, Product description must be preceded by:

• Duration of any introductory rate or payment period

• and

• First adjustment period

• Except for Seasonal payment and Fixed rate

4-69


Product

• Loan features• Description of loan features that

may change the periodic payment

1. Negative amortization

2. Interest only

3. Step payment

4. Balloon payment

5. Seasonal payment

• Interest Rate features• Description of the interest rate

1. Adjustable rate

2. Stepped rate

3. Fixed rate

For example, if loan has both

interest only and balloon features,

select Interest only because it

appears first in the list

Comprised of (2) featuresDisclose only the first applicable feature in each category regardless of how many features your

loan product may have from the following feature orders (Waterfall Methodology)


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Loan Features• Negative amortization

• If principal balance may increase due to addition of accrued interest to principal balance

• Interest only• If one or more regular periodic payments may be applied only to

interest accrued and not to the loan principal

• Step payment• If scheduled variations in regular periodic payment amount occur

that are not caused by changes to interest rate during term of the loan

• Balloon payment• If payment is not a regular payment and is more than 2 times any

one regular periodic payment during the term of the loan

• NOTE: compare to all payments, not most recent payment

• Example: if contract provides for $300 payment during years 1-3, then $700 for years 4-15, a final payment of $1,000 would be considered a balloon as it is more than 2 times the amount of the $300 payment

• Seasonal payment• If terms of legal obligation expressly provide that regular periodic

payments are not scheduled between specific unit-periods on a regular basis

Pro

du

ct D

efin

itio

ns

Interest Rate Features• Adjustable rate

• Interest rate may increase after consummation, but rate that will apply or periods for which they will apply are not known at consummation

• Step rate

• If interest rate will change after consummation, and rates that will apply and periods for which they apply are known.

• Fixed rate

• If interest rate will not change after consummation


Product Examples

• 5/3 Adjustable rate • No loan feature and only interest rate feature with introductory

period

• 0/3 Adjustable rate • No loan feature and no introductory period

• Fixed rate• No loan feature

• 5 Year Interest Only, Fixed Rate • With loan feature

• Year 7 Balloon Payment, 3/1 Step Rate• Loan feature and interest rate feature

• 11 mo. Interest Only, Fixed Rate• Loan feature and rate feature

• Special note when term is less than 24 months, use• Decimals up to 2 points

• 30 months = 2.5/1 Adjustable Rate

• 31 months = 2.58/1 Adjustable Rate

• Interest only • 12-month term, fixed rate loan =

• 11 mo. Interest Only, Fixed Rate

• 11 months because last month is all principal plus the interest

• 2 year term, fixed rate loan = • 23 mo. Interest Only, Fixed Rate

• 23 months because last month is all principal plus the interest


Clic

k to

ed

it M

aste

r ti

tle

styl

e


IBA

Lo

an P

rod

uct

Gu

ide

–TR

ID

IBA Handout


Key Definition: Changed Circumstance

• For purposes of a revised LE, a changed circumstance is:• An extraordinary event beyond the control of any interested party or other

unexpected event specific to the consumer or transaction (i.e. war or natural disaster);

• Information specific to the consumer or transaction that the creditor relied upon when providing the Loan Estimate and that was inaccurate or changed after the disclosures were provided; or

• New information specific to the consumer or transaction that the creditor did not rely on when providing the Loan Estimate

4-49


Changed Circumstances: Revised Disclosures

• Six events that justify revised LE/CD:• Changed circumstances that cause an increase to settlement charges

• Changed circumstances that affect the consumer’s eligibility for the loan or affect the value of the property securing the loan

• A change request by the consumer

• Locking of the interest rate (if not locked at application)• Includes re-locks, modifications, extensions

• Expiration of the original Loan Estimate

• Construction loan settlement delays

4-47


Changed Circumstance

• Must document• Original estimate

• Reason for revision

• How affected costs

• Only increased to extent of change

• Timing requirements met • Within 3 business days become aware of

change/triggering event

• No model form

• Not subject to eSIGN


Key Definition: Good Faith

• “Good Faith”

• Good faith estimate of costs of credit and transaction terms consistent with the best

information reasonably available to the creditor at the time disclosed

• To determine good faith:

• Look at difference between estimated charges originally provided in LE (or last valid LE or CD) and actual

charges paid by or imposed on the consumer

• Generally, if the charge paid by or imposed on consumer exceeds amount originally disclosed on LE (or last

valid LE or CD), not in good faith

• True regardless of whether creditor later discovers technical error, miscalculation, or underestimation of a

charge

• Except if falls within Tolerances

• All amounts must still be made based on best information available at time LE issued

• More on Tolerances and Changed Circumstance later

4-44


Key Term: Tolerance

• General Rule • (no specific definition to the word “tolerance”)

• If amounts paid by consumer at closing exceed amounts disclosed on LE beyond applicable tolerance threshold

• What is disclosed on the LE is the ‘baseline tolerance’• For example, Appraisal fee estimated on LE = $450; actual fee = $500; the $50 difference exceeds the baseline tolerance

• Baseline tolerance may be re-set if permissible changed circumstance

• Cures• If tolerance cure required, creditor must:

• Refund excess no later than 60 days after consummation, and

• Deliver or place in the mail a corrected CD that reflects such refund

• Generally, must be refunded to consumer if post closing• If the product does not permit “cash back” or the amount of a cure exceeds any “cash back” limit, cure with a principal curtailment

(reduction) and list as “POC”

• Else, refund must be provided to the consumer

4-47


Tolerance Baseline

• The tolerance baseline is established by what is disclosed on the Loan Estimate• Baselines may only be re-set if expressly permitted or a valid changed circumstance

• General Rule

• Bound by Loan Estimate and

• May not issue revisions because later discover technical errors, miscalculations, or underestimations of charges

• But not a commitment to lend

• Permitted only in certain specific circumstances

• Changed circumstances occurs:

• After LE provided and event causes settlement charges to increase more than permitted

• After LE provided affects consumer’s eligibility for terms applied for (creditworthiness) or value of collateral

• Consumer requests revisions

• Interest rate not locked when LE provided, and locking rate causes points or lender credits disclosed to change

• Consumer indicates intent to proceed more than 10 general business days after LE originally provided

• New construction loan and settlement is delayed

• Subject to having provided “special construction statement” on original LE


Zero Tolerance Threshold

• Creditor may never charge more than estimated amount

unless “changed circumstance” (or other triggering event)

• Fees paid to creditor, mortgage broker, or an affiliate of either

• Fees paid to an unaffiliated third party if creditor did not permit

consumer to shop

• Transfer taxes

• Fee not considered “paid to” if

• Person does not retain the fee; or

• Person retains the fee as reimbursement for amount already paid to

another part

4-44


10% Tolerance Threshold

• Some charges subject to a 10% cumulative tolerance• Recording fees

• Charges for third-party services where• Charge is not paid to creditor or creditor’s affiliate

• Consumer is permitted by creditor to shop but selects a third-party service provider on creditor’s written list of service providers

• Must meet “Tipping Point” to re-set the tolerance baseline

4-45


Variations Permitted

• Certain charges may exceed amount disclosed on LE or CD by any amount• Prepaid interest; property insurance premiums; amounts placed into an escrow, impound,

reserve or similar account;

• Services required by creditor if creditor permits consumer to shop and consumer selects 3rd party service provider not on creditor’s written list of service providers; and

• Charges paid to 3rd party service providers for services not required by creditor (may be paid to affiliates of creditor)

• However . . .• Creditors may only charge more than amount disclosed when original estimate, or lack

thereof, was based on best information reasonably available at the time of disclosure• Good faith

• Due diligence

4-46


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Tole

ran

ce B

uck

ets Provided

that disclosed based on

best information reasonably available to

creditor


TRID Tolerances, Good Faith & Due Diligence


Tolerance Buckets & Due Diligence

• 0%• 10%• None

• “I didn’t ask for the P&S”

• “They didn’t have a copy of the P&S with them”

• “They refused to give me a copy of the P&S”

• “I didn’t think we would need a survey on this one”

• “My bad, I forgot to include it”

• “It’s a new subdivision. How would I know what the estimated taxes would be?”

• “It’s a new house in the middle of nowhere. • How would I know what the insurance premiums would be or the

property taxes?

• How was I supposed to know that the appraisal needed to be ‘rural’ and not single family?”


Don’t forget …

(iii) Variations permitted for certain charges. An estimate of any of the charges specified in this

paragraph (e)(3)(iii) is in good faith if it is consistent with the best information reasonably available to the creditor at the time it is disclosed,

regardless of whether the amount paid by the consumer exceeds the amount disclosed under paragraph (e)(1)(i) of this section. For purposes of paragraph (e)(1)(i) of this section, good faith is determined under this paragraph (e)(3)(iii) even if such charges are paid to the creditor or affiliates of the creditor, so long as the charges are bona fide:

(A) Prepaid interest;

(B) Property insurance premiums;

(C) Amounts placed into an escrow, impound, reserve, or similar account;

(D) Charges paid to third-party service providers selected by the consumer consistent with paragraph (e)(1)(vi)(A) of this section that are not on the list provided under paragraph (e)(1)(vi)(C) of this section; and

(E) Property taxes and other charges paid for third-party services not required by the creditor.


Challenge

• Your system probably will not know whether you estimated in good faith• It should catch 0% and 10%

• May have a user-defined field or other field to check-off to tell system not in good faith

• Be sure you test to ensure functionality and accuracy

• You may have a manual process in place to review amounts disclosed in the “None” bucket• You do not want an auditor or examiner telling you Whoops!


➢ Safe Harbor

➢ Formatting

The TRID Disclosures


Dodd-Frank Protection

• Dodd-Frank Section 1032(d)• (d) SAFE HARBOR.—Any

covered person that uses a model form included with a rule issued under this section shall be deemed to be in compliance with the disclosure requirements of this section with respect to such model form.


Formatting

• Standard forms

required

• Loan Estimate baseline

Model Form H-24

• Closing Disclosure

baseline Model Form H-

25

• May not include any

other information

unless expressly

permitted

4-64


Formatting

• Clear and conspicuous (legible and in a readily understandable form); • in writing; and

• grouped together, • segregated from everything else, and

• provided on (physically) separate pages that are not commingled with any other documents or disclosures,

• including any other disclosures required by State or other laws

• State law disclosures must be physically separate from LE/CD

• May not include is same pdf file


Clic

k to

ed

it M

aste

r ti

tle

styl

e


• Must use designated order and grouping

• May omit certain non-applicable sections• May not omit all, even if not applicable

• So . . . Check twice before you do!

• Some items are to be left blank if not applicable

• Some require enter zero “0” if not applicable

• Rounding rules

• Dollar amounts must be rounded to the nearest whole dollar where noted in the rule• If an amount is required to be rounded but is composed of other amounts that are not required or

permitted to be rounded, use the unrounded amounts in calculating the total and then round the final sum

• Conversely, if an amount is required to be rounded and is composed of rounded amounts, use the rounded amounts in calculating the total

• Decimal point rules• Percentage amounts are disclosed by rounding to three decimals and then dropping any trailing zeros

that occur to the right of the decimal place, except where otherwise noted in the rule

• Page Options

• More on that later when we get to the actual formsForm

atti

ng


Formatting: Preliminary Estimates/Worksheets

• Preliminary worksheets or estimates• May provide preliminary worksheet or estimate

• Must avoid worksheets that could create confusion and cause the consumer to think it is the Loan Estimate form

• Expressly prohibited to use model Loan Estimate form headings, content and format substantially similar

• Must include mandatory disclosure - H-26• Clear and legible text and uses the required formatting, including bold font

• Must be on the top of the page

• May not be smaller than 12-point font

• Changes that are not expressly permitted may cause loss of protection from civil liability under TILA

Model Form H-26:

Your actual rate, payment, and costs could be higher. Get an

official Loan Estimate before choosing a loan.

4-38


Formatting: Addenda

• Addenda• Very limited circumstances where an

addendum is permitted

• Must have format similar to LE/CD

• Must use same terminology as in applicable section

• If an addendum is used, include a reference to the addendum, such as “See attached page for additional information,” in the applicable section of the LE or CD (as applicable)


Pre-disclosure Activity


Pre-Disclosure Activity

• Fee restriction• May not charge or

otherwise impose a fee, other than a reasonable credit report fee, before applicant has• Received Loan Estimate (or

GFE, if applicable)• and

• Provided intent to proceed

• May not collect post-dated checks or credit card information for such other fees

• May not collect (pre)application fee

• Written estimates• If provide applicant with

written estimate of fees, must include statement

• Model Form H-26• Top of the first page• Clear and conspicuous• Minimum 12-point font

• Not required for lists of fees, typical closing costs or rates

• Estimate headings, content, and format may not be substantially similar to Loan Estimate

• Verification of information• May not require, as a

condition of providing Loan Estimate, provision of verification documents

• Applicant may submit documents contemporaneous with application provided not required to do so

• Once have (6) items constituting an application under TRID, providing LE is triggered

4-37


• Loan Estimate

• Closing Disclosure

• Written List of Providers

Let’s take a look at the forms


Loan Estimate


Loan Estimate

• Baseline Model Form H-24 = Standard Form• Must contain accurate good faith estimate of the transaction terms and costs

• Good faith estimate of costs of credit and transaction terms consistent with the best information reasonably available to the creditor at the time disclosed

• Must be in writing and separate from any other disclosures

• Not required to be signed by consumer, however, if signed, LE must contain disclosure:

• If mortgage broker receives initial application, either creditor or mortgage broker may provide• Creditor is responsible for ensuring LE complies with the content and delivery requirements

• You may not contract away your obligations

“By signing, you are only confirming you have received this form. You do not

have to accept this loan because you have signed or received this form.”

4-64


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Loan

Est

imat

e -

Page

1Heading information

Loan Terms

Projected Payments

Costs at closing

CFPB website reference

4-65

- 83 -© 2021 Professional Bank Services, Inc. - 83 -

LE P

age

1 -

Loan

Te

rms

PREPAYMENT PENALTY

ADJUSTABLE RATE

BALLOON PAYMENT

Examples


Clic

k to

ed

it M

aste

r ti

tle

styl

e


LE P

age

1 -

Pro

ject

ed P

aym

ents

INTEREST ONLY WITH ADJUSTABLE

RATE WITHOUT ESCROW

FIXED RATE WITH PMI WITH ESCROW

FIXED RATE WITH BALLOON PAYMENT

Examples


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Loan

Est

imat

e –

Page

2Loan Costs

A. Origination Charges

B. Services You Cannot Shop For

C. Services You Can Shop For

D. Total Loan Costs

Other CostsE. Taxes and Other

Government FeesF. PrepaidsG. Initial Escrow

Payment at ClosingH. OtherI. Total Other

Adjustable Payment (AP) Table Adjustable Interest

Rate (AIR) Table

Calculating Cash to Close

••

•

•

4-89


Clic

k to

ed

it M

aste

r ti

tle

styl

e


LE P

age

2:

Loan

Co

sts

With points and origination fee

With points and no origination fee

Examples


Clic

k to

ed

it M

aste

r ti

tle

styl

e


LE P

age

2:

Oth

er C

ost

s


Clic

k to

ed

it M

aste

r ti

tle

styl

e


LE P

age

2: O

ther

Co

sts

Exam

ple

s

1

3

24

5

6

PURCHASE WITH NO MIP OR ESCROW

Must include Owner’s title on PurchasePURCHASE WITH NO ESCROW

3

REFINANCE WITH MIP, ESCROW

No Owner’s title required on Refi

Examples


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Adjustable Payments (AP) table

• Principal and interest payment may change after consummation but not based on an adjustment to the interest rate, or

• Transaction is a seasonal payment product

• Example

• 25 year fixed rate with first 5 years interest only

• Construction to perm loan with interest only first 12 months, fixed rate for entire term

• Construction loan with 50% advanced at closing, fixed rate for 12 month term

AP

vs.

AIR

Tab

les

Adjustable Interest Rate (AIR) table

• Only if the interest rate may increase after consummation,

either based on changes to an index or scheduled changes to

the interest rate

• Example

5/3 ARM

10/1 ARM

• NOT: Construction to perm loan at 6% during construction

phase, 4.5% perm phase (no because rate decreased)

4-103


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Loan

Est

imat

e –

Page

3Lender/Broker Information

5 Year Comparisons

Additional Disclosures

Confirmation of Receipt

4-106


Clic

k to

ed

it M

aste

r ti

tle

styl

e


• ExamplePa

ge 3

: Lo

an E

stim

ate

REFINANCE: LOAN ACCEPTANCE, LIABILITY AFTER FORECLOSURE

Construction Loans

You may receive a revised Loan Estimate at any time prior to 60 days before

consummation.


Closing Disclosure

4-112


Closing Disclosure (CD)

• Baseline Model Form H-25 = Standard Form• Reflect actual costs and terms of credit

• Certain changes are permitted when necessary to describe the actual terms of the loan (e.g. payment periods or additional line items for costs)

• May not be modified to state N/A even if you never offer a particular product

• Either creditor or mortgage broker may provide• Creditor is responsible for ensuring CD complies with the content and delivery requirements

• You may contract with settlement agent to provide CD• But lender still responsible for accuracy

• Settlement agent must provide CD to the Seller

• May provide revised CD only in certain circumstances• May not provide revised LE once CD is provided

• Cures – more on that later

4-113


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Page

1: C

losi

ng

Dis

clo

sure

Heading information

Loan Terms

Projected Payments

Costs at closing

4-113


Clic

k to

ed

it M

aste

r ti

tle

styl

e


• ExampleC

D P

age

1:

Hea

din

g In

form

atio

n

PURCHASE, FIXED RATE

•

Example


Clic

k to

ed

it M

aste

r ti

tle

styl

e


• Could be same as LE; must reflect final terms

CD

Pag

e 1

:Lo

an T

erm

sFIXED RATE, PREPAYMENT PENALTY

REFINANCE

Examples


Clic

k to

ed

it M

aste

r ti

tle

styl

e


CD

Pag

e 2

: C

losi

ng

Co

st

Det

ails

Borrower/Seller Paid At/Before ClosingPaid by Others

Total Closing CostsLender Credits

Loan CostsA. Origination

ChargesB. Services You

Cannot Shop ForC. Services You Can

Shop ForD. Total Loan Costs

Other CostsE. Taxes and Other

Government FeesF. PrepaidsG. Initial Escrow

Payment at ClosingH. OtherI. Total Other

4-117


Clic

k to

ed

it M

aste

r ti

tle

styl

e


• Alternate Loan Costs • Single page

Option

CD

Pag

e 2

a: C

losi

ng

Co

st D

etai

ls


Clic

k to

ed

it M

aste

r ti

tle

styl

e


• Alternate Other Costs• Single

page

CD

Pag

e 2

b: C

losi

ng

Co

st D

etai

ls


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Clo

sin

g D

iscl

osu

re:

Page

3

Totals for Cash to Close

Calculating Cash to Close• LE/CD Comparison/Changes

Summary of Transaction• Borrower• Seller

4-125


Clic

k to

ed

it M

aste

r ti

tle

styl

e


CD

Pag

e 3

:C

alcu

lati

ng

Cas

h t

o C

lose

LIST AT TOP OF PAGE WHEN USING SUMMARIES OF TRANSACTIONS

REFINANCE

Examples


Clic

k to

ed

it M

aste

r ti

tle

styl

e


CD

Pag

e 3

:C

alcu

lati

ng

Cas

h t

o C

lose

REFINANCE WITH OUT OF TOLERANCE


Clic

k to

ed

it M

aste

r ti

tle

styl

e


CD

Pag

e 3

: Alt

ern

ate

No

Sel

ler

Payo

ffs

and

Pay

men

tsREFINANCE TRANSACTION WITH ALTERNATE PAYMENTS AND PAYOFFS TABLE – NO SELLER


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Clo

sin

g D

iscl

osu

re –

Page

4More Loan Disclosures

Adjustable Payment (AP) Table

Adjustable Interest Rate (AIR) Table

Escrow Table• Property Costs

for Year 1 (whether or notescrow account)

Future costs may rise statement

4-151


Clic

k to

ed

it M

aste

r ti

tle

styl

e


CD

Pag

e 4

: Esc

row

Acc

ou

ntESCROW REQUIRED

ESCROW NOT REQUIRED AND DECLINED

x x

$3,275

$200

Examples

Escrow waiver fee goes in Block A –Origination charge if Lender charges it

4-153


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Clo

sin

g D

iscl

osu

re –

Page

5Loan Calculations Table• Like the TIL Fed

Box

More Disclosures• Appraisal• Contract Reference• Liability after

Foreclosure• Ability to Refinance• Tax deductibility

Who to contact for questions

Contact Info

Confirmation of Receipt

4-157


Written List of Providers (WLP)

4-441



• May use Model Form H-27 to comply

• May make changes in format or content

provided that changes do not affect substance,

clarity, or meaningful sequence of the form

• Permitted changes

• Delete column for estimated fee amounts

• May include statement on WLP that listing of a

settlement service provider does not constitute an

endorsement of that service provide

• Failure to provide WLP results in

settlement service automatically

subject to 10% tolerance

The listing of a settlement service provider does not constitute an endorsement of that service by <Institution>

4-441



• Loan Estimate Services Can Shop For

• Must identify at least one provider for each settlement

service required by the institution for which a

consumer can shop

• Applies even if can only shop from a limited list of providers

• May omit “Estimate” column

• Do not have to include amounts if leave column in

• Must be a provider available to consumer

• Must include a statement that consumer may choose a

different provider if they wish (hard coded on form)

• Must be a separate document

• Must be provided separate from Loan Estimate but at

same time as LE


Clic

k to

ed

it M

aste

r ti

tle

styl

e


•

Exam

ple

: Wri

tten

Lis

t o

f Pr

ovi

der

s C

anSh

op

for

•

•



• Permitted changes• May identify on WLP services for which

the consumer is not permitted to shop, provided that the creditor clearly and conspicuously distinguishes those services from the services for which the consumer is permitted to shop

• May be accomplished by placing such services under different headings

• WHY???? • Would not recommend doing this as it

would cause greater consumer confusion

• Opportunity for errors

You CANNOT Shop For


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Rem

embe

r …

Loan Estimate - Block CWritten List of Providers

If it is on the LE (or added to a CD)

in Block C (Can Shop),MUST have a WLP


Fee Placement

IBAHandout


Loan Estimate Common Fees

IBAHandout


Clic

k to

ed

it M

aste

r ti

tle

styl

e


LE F

ee P

lace

men

t:

Blo

ck A

: Pay

able

to

Len

der

or

Bro

ker Fee/Service Payable to:

If Lender selected

provider, place fee in

section & table:

Administrative fees (related to origination) Lender A - Loan Costs

Application fee Lender or Broker A - Loan Costs

Appraisal or Property Evaluation fee Lender A - Loan Costs

Appraisal Review Fee Lender A - Loan Costs

Appraisal Waiver fee Lender A - Loan Costs

Assumption fee Lender A - Loan Costs

Closing Fee Lender A - Loan Costs

Commitment fee Lender A - Loan Costs

Doc Prep fee Lender A - Loan Costs

DU Underwriting fee Lender or Broker A - Loan Costs

Escrow Waiver Fee Lender A - Loan Costs

Flood determination Lender A - Loan Costs

Inspection fee Lender A - Loan Costs

Loan handling fee Lender or Broker A - Loan Costs

Loan level price adjustments (charge/not in

rate)

Lender A - Loan Costs

Mortgage broker fee (paid directly by Broker A - Loan Costs

Origination fee Lender or Broker A - Loan Costs

Points - to reduce interest rate Lender A - Loan Costs

Processing fee Lender or Broker A - Loan Costs

Property Inspection Waiver (PIW fee) Lender A - Loan Costs

Title - Lien Search Lender A - Loan Costs

Title - Settlement fee Lender A - Loan Costs

Underwriting fee Lender or Broker A - Loan Costs

Rate Lock Extension Lender or Broker A- Loan Costs

Title - Closing fee Lender A- Loan Costs


Clic

k to

ed

it M

aste

r ti

tle

styl

e


LE F

ee P

lace

men

t:

Blo

ck B

: Pay

able

to

3rd

Part

y an

d

Bo

rro

wer

Can

no

t Sh

op

Fee/Service Payable to:

If Lender selected


section & table:

Administrative fees (related to origination) 3rd party B - Loan Costs

Appraisal Management Fee 3rd party B - Loan Costs

Appraisal or Property Evaluation fee 3rd party B - Loan Costs

Appraisal Review Fee 3rd party B - Loan Costs

Credit report 3rd party B - Loan Costs

Doc Prep fee 3rd Party B - Loan Costs

FHA Mortgage Insurance Premium paid at FHA B - Loan Costs

Flood determination 3rd party B - Loan Costs

Inspection fee 3rd party B - Loan Costs

Life of Loan flood monitoring fee 3rd party B - Loan Costs

MERs Registration fee 3rd party B - Loan Costs

RD guaranty fee RD B - Loan Costs

Subordination Fee 3rd party B - Loan Costs

Survey (Required by Lender) 3rd party B - Loan Costs

Tax Service fee 3rd party B - Loan Costs

Tax Transcript fee (4506T fee) 3rd party B - Loan Costs

Termite Inspection (required by lender) 3rd party B - Loan Costs

Title - Abstracting 3rd party B - Loan Costs

Title - Administration fees 3rd party B - Loan Costs

Title - Attorney Fees 3rd party B - Loan Costs

Title - Closing Fee 3rd Party B - Loan Costs

Title - IFA Title Guaranty IFA B - Loan Costs

Title - Lenders Title Insurance 3rd party B - Loan Costs

Title - Lien Search 3rd party B - Loan Costs

Title - Notary fees (related to clearing title) 3rd party B - Loan Costs

Title - Owner's Title Insurance 3rd party B - Loan Costs

Title - Settlement fee 3rd party B - Loan Costs

Title - Title Opinion fee 3rd party B - Loan Costs

USDA guaranty fee USDA B - Loan Costs

VA funding fee VA B - Loan Costs

Verification of Deposit fee 3rd party B - Loan Costs

Verification of Employment fee Applicant's Employer B - Loan Costs


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Fee/Service Payable to:If Borrower can shop2,

place fee in section &

table:

Survey (Required by Lender) 3rd party C - Loan Costs

Termite Inspection (required by lender) 3rd party C - Loan Costs

Title - Abstracting 3rd party C - Loan Costs

Title - Administration fees 3rd party C - Loan Costs

Title - Attorney Fees 3rd party C - Loan Costs

Title - Closing Fee 3rd Party C - Loan Costs

Title - Lenders Title Insurance 3rd party C - Loan Costs

Title - Lien Search 3rd party C - Loan Costs

Title - Notary fees (related to clearing title) 3rd party C - Loan Costs

Title - Settlement fee 3rd party C - Loan Costs

Title - Title Opinion fee 3rd party C - Loan Costs

LE F

ee P

lace

men

t:

Blo

ck C

: Pa

yab

le t

o 3

rdPa

rty

and

B

orr

ow

er C

an S

ho

p


Clic

k to

ed

it M

aste

r ti

tle

styl

e


LE F

ee P

lace

men

t:

Oth

er C

ost

s B

lock

s E,

F, G

, H

Fee/Service Payable to:If Borrower can shop2,

place fee in section &

table:

Deed Stamps (Transfer taxes) Govt. Entity E - Other Costs

Recording fees Govt. Entity E - Other Costs

Recording Subordination Agreement Govt. Entity E - Other Costs

Revenue Stamps (required by Iowa law to be paid by seller) Govt. Entity E - Other Costs

Flood insurance FEMA or insurance F - Other Costs

Earthquake insurance 3rd party F - Other Costs

Homeowner's insurance 3rd party F - Other Costs

Escrow aggregate adjustment Lender G - Other Costs

Escrow deposit of flood insurance Lender G - Other Costs

Escrow deposit of hazard insurance Lender G - Other Costs

Escrow deposit of Private Mortgage Insurance premiums Lender G - Other Costs

Escrow deposit of taxes Lender G - Other Costs

Total Escrow deposit Lender G - Other Costs

Title - Owner's Title Insurance 3rd party H - Other Costs

Administrative or Transaction Fee Realtor H - Other Costs

Condominium certificate and questionnaire 3rd Party H - Other Costs

Credit Life & Disability Insurance Insurance company H - Other Costs

Survey (Borrower's option/not Lender required) 3rd party H - Other Costs

Transaction fee (realtor fee per purchase agreement) 3rd party H - Other Costs

Home buyers inspection (not required by lender) 3rd party H- Other Costs

Homeowner's Association Certification 3rd party H- Other Costs

Mortgage Credit Certificate Fee Govt. Entity H- Other Costs

Block E: Taxes and Other Government Fees

Block G: Escrows Amounts

Block H: Other Costs

Block F: Prepaids


Closing Disclosure Common Fees

IBAHandout


Clic

k to

ed

it M

aste

r ti

tle

styl

e


CD

Fee

Pla

cem

ent:

B

lock

A: P

ayab

le t

o L

end

er o

r B

roke

r

Fee/Service Payable to: If Lender-

required

provider, place

fee in section &

table:

Administrative fees (related to loan

origination)

3rd party B - Loan Costs



Appraisal Review Fee 3rd Party B - Loan Costs

Credit report 3rd Party B - Loan Costs

Doc Prep fee Third party B - Loan Costs

FHA Mortgage Insurance Premium

paid at closing

FHA B - Loan Costs










Termite Inspection (required by

lender)

3rd party B - Loan Costs




Title - IFA Title Guaranty fee IFA B - Loan Costs



Title - Notary fees 3rd party B - Loan Costs



Title - Title Opinion fee Attorney B - Loan Costs




Verification of Employment fee Applicant's

Employer

B - Loan Costs


Clic

k to

ed

it M

aste

r ti

tle

styl

e


CD

Fee

Pla

cem

ent:

B

lock

B: P

ayab

le t

o 3

rdPa

rty

and

B

orr

ow

er C

ann

ot

Sho

p


If Lender selected


section & table:

Administrative fees (related to origination) 3rd party B - Loan Costs



Appraisal Review Fee 3rd party B - Loan Costs

Credit report 3rd party B - Loan Costs

Doc Prep fee 3rd Party B - Loan Costs

FHA Mortgage Insurance Premium paid at FHA B - Loan Costs










Termite Inspection (required by lender) 3rd party B - Loan Costs



Title - Attorney Fees 3rd party B - Loan Costs


Title - IFA Title Guaranty IFA B - Loan Costs



Title - Notary fees (related to clearing title) 3rd party B - Loan Costs



Title - Title Opinion fee 3rd party B - Loan Costs




Verification of Employment fee Applicant's Employer B - Loan Costs

• Did NOT Shop• Could not shop• Shopped but picked from WLP• Failed to provide WLP when could have shopped, regardless of

whether or not actually shopped


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Fee/Service Payable to: Borrower

shopped and did

not pick from

WLP

Survey (Required by Lender) 3rd party C - Loan Costs

Doc Prep fee Third party C - Loan Costs

Termite Inspection (required by

lender)

3rd party C - Loan Costs

Title - Abstracting 3rd party C - Loan Costs

Title - Administration fees 3rd party C - Loan Costs

Title - Lenders Title Insurance 3rd party C - Loan Costs

Title - Lien Search 3rd party C - Loan Costs

Title - Notary fees 3rd party C - Loan Costs

Title - Settlement fee 3rd party C - Loan Costs

CD

Fee

Pla

cem

ent:

B

lock

C:

Paya

ble

to

3rd

Part

y an

d

Bo

rro

wer

Did

Sh

op

• DID Shop• Did not pick from WLP


Clic

k to

ed

it M

aste

r ti

tle

styl

e


Did

th

ey r

eally

sh

op

?


Clic

k to

ed

it M

aste

r ti

tle

styl

e


CD

Fee

Pla

cem

ent:

O

ther

Co

sts

Blo

cks

E, F

, G, H


Deed Stamps (Transfer taxes) Govt. Entity E - Other Costs

Recording fees Govt. Entity E - Other Costs

Revenue Stamps (Iowa law requires

seller to pay)

Govt. Entity E - Other Costs

Daily Interest charges Lender F - Other Costs

Flood insurance premium FEMA or insurance F - Other Costs

Private Mortgage Insurance Premium

(MIP) (Paid at closing)

3rd party F - Prepaids

Escrow aggregate adjustment Lender G - Other Costs

Escrow deposit of flood insurance Lender G - Other Costs

Escrow deposit of hazard insurance Lender G - Other Costs

Escrow deposit of Private Mortgage

Insurance premiums

Lender G - Other Costs

Escrow deposit of taxes Lender G - Other Costs

Total Escrow deposit Lender G - Other Costs

Homeowner's Association

Certification

3rd party H - Other

Title - Owner's Title Insurance 3rd party H - Other

Block E: Taxes and Other Government Fees

Block F: Prepaids

Block G: Escrows

Block H: Other


Len

de

r C

red

its


Yield Spread Premiums - used as credit

to reduce costs

Borrower J - Other Costs

(Lender Credits)

Lender Credits for closing costs or

tolerance cures

Borrower J - Total Closing

Costs - Lender

Credit


Cu

res


Questions?

Documents

Building for the Future 2021 Lending Compliance School