NDC GFE Guide PMAC Lending Services, Inc. , February , 2014

CORP. NMLS#167441

1For business and professional use only. Not for Consumer Distribution.

NDC GFE GuidePMAC Lending Services, Inc.,

February, 2014

Disclaimer:This guide provides basic information about RESPA requirements. It is not a substitute for the RESPA guidelines published and regulated by the CFPB, nor is it intended to be an interpretation of the RESPA guidelines. In the event of discrepancies, the official guidance should be followed. The final regulation and additional resources can be found at: http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=9cab7962ab7aa3e468e911638c817e0b&rgn=div5&view=text&node=12:8.0.2.14.17&idno=12

http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=9cab7962ab7aa3e468e911638c817e0b&rgn=div5&view=text&node=12:8.0.2.14.17&idno=12



CORP. NMLS#167441


Purpose

Understand GFE requirements

Recognize GFE errors

Understand Changed Circumstance

Understand when re-disclosure is and is not required

CORP. NMLS#167441


Delivery of the GFE

The initial GFE prepared by the Broker in a transaction is the binding GFE

The GFE must be prepared within 3 business days of the loan application

The GFE must include the names of all the borrowers

RESPA defines an application as receiving the following minimum items required to issue a GFE:

Borrower’s Name

Borrower’s Social Security Number

Borrower’s Monthly Income

Property Address

Property Value

Loan Amount

CORP. NMLS#167441


Important Date – Floating Rate

• Line 1: Must be the date of the GFE or after

• Line 2: Must be at least 10 business days from the date of the GFE,

• Excluding Sunday and Holidays

• Line 3: Cannot be empty – 0, N/A or a number are acceptable

• Line 4: Cannot be empty – Must be 1 or greater

CORP. NMLS#167441


Important Date - Locked Rate

• Line 1: Must be lock expiration date

• Line 2: Must be at least 10 business days from the date of the GFE,

• Excluding Sundays and Holidays

• Line 3: Must be the number of days of the lock term

• Line 4: Must be 0 or N/A - Cannot be empty

CORP. NMLS#167441


Summary of Your Loan

• The Summary of Your Loan section must match current terms shown on the 1003 and TIL.

• Loan amount (must be NOTE LOAN amount on Government loans with financed MIP or Funding fees)

• Loan term

• Interest rate

• Initial monthly

payment

• Questions pertaining to an

ARM loan, Negative Amortization loan, Balloon loan or

Prepayment Penalty must be completed

CORP. NMLS#167441


Summary of Your Loan (cont.)

Escrow Account Information

• The monthly payment must match the payment in the summary of your loan section.

• The appropriate impound box must be marked

CORP. NMLS#167441


GFE – Block 1

Origination Charge

Block 1

The fees disclosed in Block 1 will include fees paid to you, the non-delegated correspondent, and PMAC.

Some examples:

• Processing

• Administrative fee

• Origination

• Underwriting

• Application fee

• Block 1– Cannot increase unless the loan amount increases and the origination or mortgage Broker fee is disclosed as a percentage of the loan amount on the original

Fee Worksheet or Itemization of Amount Financed

• PMAC will net fund our fees from the origination fees

CORP. NMLS#167441


GFE – Block 2

Your credit or charge (points) for the specific interest rate chosen

Block 2

One of the 3 options must be selected:

• Box 1: Used for Par Pricing Scenario

• Box 2: Used for Lender credits to cover third party closing costs

• Box 3: Used in the event the loan has discount points

CORP. NMLS#167441


GFE – Block 3

Required Services

These are charges for services the Lender requires to complete the transaction

Block 3

Examples:

• Appraisal

• Credit Report

• Tax Service

• Flood Certification

• Up-front Mortgage Insurance Premiums (UFMIP) (must be disclosed, even if it is being financed)

• VA Funding Fee (must be disclosed, even if it is being financed)

• Condo certification

CORP. NMLS#167441


GFE – Block 4

Title Services and Lender’s Title Insurance

Block 4

Examples:

• All Charges associated with the title services and settlement (closing agent services)

• Subordination (if prepared by closing agent or title company)

• Miscellaneous Fees are not allowed: fees must be specific

CORP. NMLS#167441


GFE – Block 5

Owner’s Title Insurance

Block 5

• Disclosure required on all purchase transactions even if it is going to be paid by the seller

• 0 or N/A is acceptable on refinance transactions

CORP. NMLS#167441


GFE – Block 6

Required Services the Borrower Can Shop for

Block 6

• Examples of Services that Borrowers CAN shop for:

• Pest Inspections, Survey, Re-Key Fee, Transaction Coordinator, Natural Hazard Disclosure Report

• Examples of services that Borrower CANNOT shop for:

• Notary Fee

• Only the Lender required services must be disclosed

CORP. NMLS#167441


GFE – Block 7

Government Recording Charges

Block 7

• This block must have a fee disclosed.

• Fees in this box cannot change without a valid change of circumstance due to loan amount change

CORP. NMLS#167441


GFE – Block 8

Transfer Taxes

Block 8

• The amount cannot increase but may decrease

• Increases have zero tolerance unless loan amount increases

• City/County/State tax stamps

• Can be called recordation tax, intangible tax, excise tax, doc stamps, deed stamps, mortgage stamps etc.

• Not just on purchases. Some areas have a transfer tax on refinance transactions.

CORP. NMLS#167441


GFE – Block 9

Initial Deposit for your escrow account

Block 9

• The dollar amount must be complete when the loan has escrows

CORP. NMLS#167441


GFE – Block 10

Daily Interest Charges

Block 10

• Daily interest amount

• Number of days

• Anticipated settlement date with a total interest charge

CORP. NMLS#167441


GFE – Block 11

Homeowner’s Insurance

Block 11

• Hazard

• Flood

• Hurricane

• Earthquake

• Purchase Transactions

• Premium due is required to be disclosed on all purchase transactions

• Refinance Transactions

• Existing policy premium due does not need to be disclosed

• New policy premiums must be disclosed

CORP. NMLS#167441


Service Providers

• A Service Provider List (SPL) is required on all transactions, even if the borrower is not allowed to shop for any services. It must be loan

specific and include verbiage that states the borrower is not required to use the service provider listed.

• Different formats are acceptable provided they meet minimum requirements.

• If you are allowing the borrower to shop for services, the list should include local service providers.

• An address and phone number for the service provider must be included

CORP. NMLS#167441


GFE Common Errors

Common GFE errors to avoid

• All three (3) pages of the GFE are required and must be legible

• GFE must match the original Fee Worksheet or Itemization of Amount Financed

• Date of GFE must be within 3 business days of the initial 1003’s interviewer date

• Date in line 2 of Important Dates Section cannot be less than 10 business days (excluding Sundays and Holidays)

• Corrections to typed GFE’s are not acceptable

• Amounts in A + B do not balance on page 2

• Owners title fee missing on a purchase transaction

• White out on the GFE is not acceptable

• Resubmission is not allowed as a means to increase origination

CORP. NMLS#167441


Change of Circumstance

Change of Circumstance is …

• Changed situation or inaccurate information provided by the borrower after issuance of the GFE

• The revised GFE must be issued within 3 business days of discovering the change or being notified of the change

• Any revised GFE must be documented on the Changed Circumstance Form and must included the following

• Date of Change

• Date of Re-Disclosure

• Detail of Change

• Indicated fees changes is associated with the changed circumstance

• Changes of circumstance that occur prior to submission are required to be submitted upfront.

CORP. NMLS#167441


GFE Guide

Brought to you by

PMAC Lending Services Inc.

Documents

NDC GFE Guide PMAC Lending Services, Inc. , February , 2014