GFE & TIL Disclosures how to get them right… © 2012 American Financial Network. All Rights Reserved.Updated 01/11/2012

GFE & TIL Disclosures

how to get them right…

© 2012 American Financial Network. All Rights Reserved. Updated 01/11/2012

RESPA/Completing the GFE


RESPA: 3 Business Days for GFE IssuanceRESPA: 3 Business Days for GFE Issuance

• Borrower’s Name• Borrower’s Monthly Income• Borrower’s SSN• Property Address• Estimated Property Value• Loan Amount

Effective for all loans originated on or after 01/01/2010, the Good Faith Estimate (GFE) must be issued within three business days of the loan originator’s receipt of an application or information sufficient to complete an application.

Sufficient information includes:

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RESPA: GFE-related DisclosuresRESPA: GFE-related Disclosures

• Notice of Intent to Proceed, signed by borrower(s)

• Good Faith Estimate (GFE)• Initial Fees Worksheet (Point

form)/Itemized Fee Worksheet (Encompass form)

• Settlement Service Provider List

GFE-related disclosures include:

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These four forms are to be uploaded to the paperless system as a group under the form defini-tion “GFE (Initial).”

RESPA: GFE Preparation and Issuance RulesRESPA: GFE Preparation and Issuance Rules

GFE preparation and issuance rules include:

• Prior to issuing a GFE, the loan originator/lender may only collect a bona fide fee for the cost of the credit report.

• Additional fees, such as the appraisal fee, cannot be collected until the borrower has received a copy of the GFE and TIL. AFN requires that a signed Notice of Intent to Proceed, signed TIL, and full set of signed initial disclosures are returned prior to collecting any additional money.

• Fees may not be listed as POC (paid outside of closing) on the GFE.

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RESPA: GFE “Changed Circumstances” RulesRESPA: GFE “Changed Circumstances” Rules

The loan terms or charges can only be changed in the event there are “changed circumstances” as outlined below:

• Acts of God, war, disaster, or an emergency situation has arisen.

• Information particular to the borrower or transaction, which was relied upon when providing the GFE, has since been found to be inaccurate or has changed; such information may include the borrower’s credit to qualify, the loan amount, the estimated property value or any other information that was used to provide the GFE.

• New information particular to the borrower or transaction, which was not relied upon when providing the GFE, has been discovered.

• Other circumstances particular to the borrower or transaction, such as boundary disputes, the need for flood insurance, or environmental problems have arisen.

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RESPA: GFE “Changed Circumstances” Rules RESPA: GFE “Changed Circumstances” Rules (Cont’d)(Cont’d)

"Changed Circumstances" must be disclosed within three business days of receiving the changed information and only those fees affected by the changed circumstance may be amended.

Common Examples of "changed circumstances" (this is not an all-inclusive list; all must be disclosed within three business days of the change):

• Underwriter determines a desk review is required• Borrower requests a change in the loan amount or terms• Loan is locked and points change based on the locked price

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RESPA: GFE Disclosure TolerancesRESPA: GFE Disclosure Tolerances

RESPA contains 3 tolerance levels for costs disclosed on the GFE. These levels dictate which disclosed fees can change at settlement and by how much (if at all).

Those with Zero Tolerance cannot change at closing.

Those with a 10% Tolerance can increase up to 10% at closing.

Those with Unlimited Toler-ance can increase by any percentage or amount at closing.

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RESPA: GFE Re-disclosure RequirementsRESPA: GFE Re-disclosure Requirements

Each time the GFE is amended, the following forms are required with this re-disclosure:

• Changed Circumstance Form, identifying the change(s) that are being made

• Revised GFE with new disclosure date and charges; list each fee that is changing per the changed circumstance form, making sure to show the old amounts and the new amounts of the fees

• Re-disclosed Initial Fees Worksheet (Point form)/Re-disclosed Itemized Fee Worksheet (Encompass form)

These three forms are to be uploaded to the paperless system as a group under the form definition “GFE (Re-disclosure) #1” (#2, #3, etc.).

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RESPA: Right to Cure and Tolerance ViolationsRESPA: Right to Cure and Tolerance Violations

If any charges at settlement are greater than those listed on the GFE by more than the permitted tolerance, the branch may “cure” the tolerance violation by issuing a lender credit to reimburse the borrower.

The reimbursement must equal the amount by which the tolerance was exceeded.

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Notice of Intent to ProceedNotice of Intent to Proceed

• The initial disclosure

date in this example is

01/04/2011.

• This form has two fields

in which a date must

appear; the 1st is the

date this form is issued,

and the 2nd is the date

of the GFE (they will

typically match).

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01/04

01/04

GFE Page 1: Originator, Borrower & PropertyGFE Page 1: Originator, Borrower & Property

Page 1 of the GFE contains basic loan information, including the loan originator, borrower(s) and loan terms. You must also provide the loan originator’s name, address, phone number and email address and his/her business name. Use AFN phone number or cell phone numbers, and AFN or personal e-mail accounts.

Names of all applicants are also required, as well as the subject property address.

The GFE must also be dated with the completion date.

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GFE Page 1: Important Dates – Floating LoansGFE Page 1: Important Dates – Floating Loans

“Important Dates” for floating loans are to be completed as follows:

Line 1. The date (and time, if applicable) until which the stated interest rate is available (typically the initial disclosure date; N/A is not acceptable)

Line 2. The date until which the estimate for all other settlement charges is available; it must be at least 10 business days from the date of the GFE (N/A is not acceptable). Count starting the first business day after the GFE is disclosed; the GFE expires at midnight on the 10th business day. Saturdays, Sundays and legal holidays do not count as business days.

Line 3. The rate lock period, in calendar days (if not applicable, enter “N/A”)

Line 4. The minimum number of days before settlement the rate must be locked (AFN policy is 7 days)

NOTE: Complete either Line 3 or Line 4 for locked loans. If the rate is floating, enter N/A on Line 3 and complete Line 4. If the rate is locked, complete Line 3 and enter N/A on Line 4.

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GFE Page 1: Important Dates – Locked LoansGFE Page 1: Important Dates – Locked Loans

“Important Dates” for locked loans are to be completed as follows:

Line 1. The date (and time, if applicable) the rate lock will expire

Line 2. This should remain at 10 business days from the date of the initial GFE (N/A is not acceptable; date does not change with re-disclosure)

Line 3. The rate lock period, in calendar days

Line 4. Enter N/A if the loan is locked

NOTE: Complete either Line 3 or Line 4 for locked loans. If the rate is floating, enter N/A on Line 3 and complete Line 4. If the rate is locked, complete Line 3 and enter N/A on Line 4.

You must re-disclose when the loan locks and issue a new GFE (within 3 days), changing information on Page 1.

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GFE Page 1: Summary of Your LoanGFE Page 1: Summary of Your Loan

Your initial loan amount is – The total loan amount

Your loan term is – The term of the loan, expressed in years

Your initial interest rate is – The note rate, or initial rate if an ARM

Your initial monthly amount owed for principal, interest, and any mortgage insurance is – This amount should reflect principal, interest, and any mortgage insurance payments.

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GFE Page 1: Summary of Your Loan (Continued)GFE Page 1: Summary of Your Loan (Continued)

Check No or Yes to indicate whether the interest rate could rise. If yes, indicate the maximum rate to which it can rise over the life of the loan and the first rate change date (if date unknown, enter “unknown”).

Check No or Yes to indicate whether the loan balance can rise, even if the borrower makes payments as agreed and on time. A loan with a negative amortization is an example of a “Yes.” If yes, indicate the maximum amount to which the balance can rise during the life of the loan.

NOTE: If the loan balance will increase only because escrow items are being paid through the loan balance, you do not have to check Yes.

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GFE Page 1: Summary of Your Loan (Continued)GFE Page 1: Summary of Your Loan (Continued)

Check No or Yes to indicate whether the monthly amount of principal, interest, and mortgage insurance can rise, even if payments are made as agreed and on time. If yes, state: the # of years (or months) until the monthly amount can first change; the maximum monthly amount at the first change; and the most the monthly payment amount could ever be over the life of the loan.

Check No or Yes to indicate whether a prepayment penalty applies. If yes, indicate the maximum amount it could be.

Check No or Yes to indicate whether there is a balloon payment. If yes, state the amount of the payment and the number of years until it’s due.

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GFE Page 1: Escrow Account InformationGFE Page 1: Escrow Account Information

This box is used to inform the borrower(s) whether or not the loan includes an escrow account for property taxes and other of their financial obligations.

The “monthly amount owed of…” should match the amount you entered as the initial monthly payment amount in the “Summary of your loan” section. It includes principal, interest, and mortgage insurance only (and does not include the amount of the estimated escrow payment).

Check No or Yes to indicate whether or not there is an escrow account. If yes, you are required to provide further details on page two.

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GFE Page 1: Summary of Settlement ChargesGFE Page 1: Summary of Settlement Charges

Block A – This is the amount carried forward (actually, backward) from origination charges/fees calculated on page 2.

Block B – This is the amount carried forward (actually, backward) from all other charges/fees for settlement services calculated on page 2.

Block A + B – This is the total sum of the amounts shown in the two blocks above.

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GFE Page 2: Estimated Settlement Charges – GFE Page 2: Estimated Settlement Charges – Origination ChargeOrigination Charge

Block 1 – The total of all charges that all originators (lenders, mortgage brokers) involved in the transaction will receive. This includes all fees associated with getting the loan, such as: the broker’s YSP; origination points; application, processing, underwriting, administration, document preparation, wire, lender inspection, and other miscellaneous fees (does not include discount points used to buy down the rate). An originator cannot separately charge additional fees.

EXAMPLE:

If there is a 1% origination fee on a $250,000 loan, plus a $250 underwriting fee, and a $100 wire fee, the amount listed here would be $2,850 (1% of $250,000 = $2,500 + $250 + $100 = $2,850).

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GFE Page 2: Estimated Settlement Charges – GFE Page 2: Estimated Settlement Charges – Origination Charge (Continued)Origination Charge (Continued)

Block 2 – Check only one of the three checkboxes, insert the interest rate, and insert the dollar amount (or zero if none) in the box on the right. How this box is completed depends on whether or not the transaction involves a mortgage broker.

No Mortgage Broker Involved – You may choose not to disclose any credit or charge for the interest rate separately from the origination charge by checking the 1st box and inserting a zero in the box on the right. AFN requires that lender credits are disclosed here, as well as any points charged to the borrower.

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GFE Page 2: Estimated Settlement Charges – GFE Page 2: Estimated Settlement Charges – Origination Charge with Broker InvolvementOrigination Charge with Broker Involvement

Remember, how this box is completed depends on whether or not the transaction involves a mortgage broker.

Mortgage Broker Involved – Check the 2nd or 3rd box to disclose whether there are discount points that reduce the rate (a charge) or a YSP (a credit) for the specific interest rate. This amount is the net payment from the lender to the mortgage broker. Calculate the sum of all payments from the lender to the broker, including payments based on the loan amount, a flat rate, or any other computation.

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GFE Page 2: Estimated Settlement Charges – GFE Page 2: Estimated Settlement Charges – Origination with Broker Involved YSPOrigination with Broker Involved YSP

YSP Example – If the net payment from the lender to the mortgage broker is positive (i.e. a YSP is paid to the broker), check the 2nd box to reflect a credit to the borrower. State the amount of the YSP in the box provided and insert this as a negative amount (a credit) in the box on the right. This negative amount offsets the amount of YSP paid to the broker as compensation, which was included in Block 1 under “Our origination charge.”

NOTE: Check only one box in Block 2; there cannot be both a credit for a YSP and a charge for discount points in the same transaction.

X 500.00 5.00 -500.00

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GFE Page 2: Estimated Settlement Charges – GFE Page 2: Estimated Settlement Charges – Origination with Broker Involved PointsOrigination with Broker Involved Points

Points Example – If the net payment from the lender to the mortgage broker is negative (i.e. the borrower paid discount points to buy down the rate), check the 3rd box to reflect a charge to the borrower. State the dollar amount of the charge and insert it as a positive amount (a charge) in the box to the right.

If there is no net payment (the sum calculated equals zero), either the 2nd or 3rd box may be checked. A zero must be entered in the box to the right.

NOTE: Check only one box in Block 2; there cannot be both a credit for a YSP and a charge for discount points in the same transaction.

X 500.00 5.00 500.00

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GFE Page 2: Estimated Settlement Charges – GFE Page 2: Estimated Settlement Charges – Total Origination ChargesTotal Origination Charges

Block A – This is the total of the amounts shown in Block 1 and Block 2. Transfer this amount to Block A on Page 1 of the GFE.

NOTE: A negative sum is possible in some transactions.

Where a “no cost” loan encompasses the loan origination fee and other third-party fees, list a negative amount (a credit) in Block 2 to offset all of the fees in the “no cost” loan. This will result in a negative number in Block A to cover the intended third-party fees listed in Blocks 3-11.

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GFE Page 2: Charges for Settlement Services – GFE Page 2: Charges for Settlement Services – Lender-selected Required ServicesLender-selected Required Services

Block 3 – List third-party service providers that are required and selected by the originator (other than title services), including the specific service provided and estimated charge for each. Enter the sum of these charges in the box to the right.

Third-party settlement providers are providers of services other than the loan originator itself. Examples include credit vendors, appraisers, flood and tax-related service providers, and mortgage insurance companies.

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GFE Page 2: Charges for Settlement Services – GFE Page 2: Charges for Settlement Services – Title Services, Lender’s and Owner’s Title InsTitle Services, Lender’s and Owner’s Title Ins

Block 4 – Enter the estimated total charge for these third-party settlement services in the box to the right, regardless of who selects of pays for them. This may include fees for title searches, examinations and endorsements, delivery, lender’s title insurance premiums, notary and settlement fees.

Block 5 – For purchase transactions, enter an estimate of the charge for owner’s title insurance and endorsements in the box to the right, regardless of who selects and pays for them.

For non-purchase (i.e. refinance or home equity loan) transactions, enter “Not Applicable” or “N/A” in the box to the right.

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GFE Page 2: Charges for Settlement Services – GFE Page 2: Charges for Settlement Services – Required Services Required Services for whichfor which Borrowers Can Shop Borrowers Can Shop

Block 6 – List each required third-party service for which the borrowers are permitted to shop/select the settlement service provider (other than title services). Describe the service and insert a fee estimate in the charge column.

Enter the sum total of these fees in the box to the right.

NOTE: If the borrowers are permitted to shop for third-party settlement services, they must be given a separate “Written List of Settlement Service Providers” at the time of the GFE.

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GFE Page 2: Charges for Settlement Services – GFE Page 2: Charges for Settlement Services – Government Recording Charges, Transfer FeesGovernment Recording Charges, Transfer Fees

Block 7 – Enter an estimate of the state and local government recording fees for loan and title documents in the box to the right.

Block 8 – Enter an estimate of all state and local government fees attached to mortgage loans and home sales that are likely to be charged at settlement (based on the proposed loan amount or sales price and the property address) in the box to the right.

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GFE Page 2: Charges for Settlement Services – GFE Page 2: Charges for Settlement Services – Initial Escrow Account DepositInitial Escrow Account Deposit

Block 9

In the gray shaded box:

Check the appropriate box(es) to indicate whether the account will cover future payments for all property taxes, all insurance as they come due.

In the box to the right:

Enter an estimate of the amount the borrower will be required to place into a reserve/escrow account at closing for recurring charges. These may include: property taxes, hazard insurance, flood insurance, mortgage insurance, other periodic charges.

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GFE Page 2: Charges for Settlement Services – GFE Page 2: Charges for Settlement Services – Daily Interest ChargesDaily Interest Charges

Block 10

In the gray shaded box:

Calculate the amount of a single day’s interest, and enter this figure in the money field in the gray shaded box.

Next, enter the number of odd days (from the date of settlement until the first day of the first period covered by scheduled mortgage payments).

Indicate the projected closing date.

In the box to the right:

Multiply the daily interest by the number of odd days and enter the product here.

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GFE Page 2: Charges for Settlement Services – GFE Page 2: Charges for Settlement Services – Homeowner’s InsuranceHomeowner’s Insurance

Block 11

List the hazard and other similar insurance types (i.e. fire, flood, etc.) the borrower is required to purchase at or before closing, along with an estimated charge for each.

Enter the sum total of these fees in the box to the right.

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GFE Page 2: Charges for Settlement Services – GFE Page 2: Charges for Settlement Services – Total Settlement ChargesTotal Settlement Charges

Block B – Enter the sum total of all amounts listed in Blocks 3-11.

Block A + B – Enter the sum total of the amount in Block A plus the amount in Block B.

Remember to also transfer these amounts to the corresponding Blocks on Page 1.

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GFE Page 3: Charges that Can Change at GFE Page 3: Charges that Can Change at SettlementSettlement

This section offers information to the borrower regarding disclosed estimates of fees on the GFE that cannot increase, fees that can increase up to 10%, and other charges that can change at settlement.

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GFE Page 3: Using the Tradeoff TableGFE Page 3: Using the Tradeoff Table

Completion of this section is optional. If you choose to complete it, enter data from the current GFE in the first column, and the options as captioned in the headers of the other two columns.

The alternative loans must use the same loan amount and be identical to the loan on the GFE except for the differences expressed in the column headings.

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GFE Page 3: Using the Shopping CartGFE Page 3: Using the Shopping Cart

This is a tool provided for the borrower to record and compare loan offers. It is to be left blank by the originator and the borrower may complete it if he or she wishes.

Below the table is a statement to the borrower that the loan, its fees and settlement charges will not change if the lender sells the loan.

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Itemized Fee Worksheet (Initial)Itemized Fee Worksheet (Initial)

• The date prepared must match the date prepared on the initial GFE

• The total origination charges must match the total origination charges on page 1 of the GFE

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01/04

Settlement Services List of ProvidersSettlement Services List of Providers

37

• The list of providers must contain settlement providers whose fees were disclosed on the loan.

• Be sure the settlement providers’ names are listed on the form.

• If the borrower chooses another settlement provider at closing, the tolerance is unlimited.

Re-disclosing the GFE


Changed Circumstances Form (Re-disclosing)Changed Circumstances Form (Re-disclosing)

39

• The re-disclosure date in this example is 01/14/2011.

• Always enter the GFE Revision #.

• Indicate the change for which the GFE is being re-disclosed.

• Indicate if any charges are being revised as a result of the change.

01/14

Good Faith Estimate (Re-disclosing) – Pg 1Good Faith Estimate (Re-disclosing) – Pg 1

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• The re-disclosure date in this example is 01/14/2011.

• Box 1: If re-disclosing due to a rate lock, enter the lock expiration date here.

• Box 2: IMPORTANT! Box 2 under “Important Dates” should have the same date the initial GFE had in its Box 2 (10 business days from the initial disclosure date).

• Box 3: If re-disclosing due to a rate lock, enter the number of days locked here.

• Box 4: If re-disclosing due to a rate lock, enter N/A.

01/14

Same as Initial G

FE

Lock Exp.

Good Faith Estimate (Re-disclosing) – Pg 2Good Faith Estimate (Re-disclosing) – Pg 2

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• Origination charges cannot change from the initial GFE unless from an allowable changed circumstance.

• The origination fee cannot change when the loan is locked.

• Discount points may be changed/added if the loan is locked at a cost to the borrower.

Itemized Fee Worksheet (Re-disclosing)Itemized Fee Worksheet (Re-disclosing)

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• The date prepared must match the date prepared on the re-disclosed GFE.

• The origination charges must match origination charges on page 1 of the re-disclosed GFE.

01/14

TILA/MDIA Compliance


MDIA: SummaryMDIA: Summary

MDIA requires, among other things, that a creditor provide the early disclosures even when the loan is not for the purpose of financing the purchase or initial construction of the consumer’s principal dwelling. The early disclosures must also be provided for non-purchase closed-end loans secured by the consumer’s principal dwelling (such as a refinance loan). MDIA also requires these disclosures to be given before the consumer pays any fee, other than a bona fide and reasonable fee for obtaining the consumer’s credit history.

The creditor must also supply the upfront disclosures, including the Truth in Lending (TIL) and any revisions prior to closing if fees change above tolerance.

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MDIA: RESPA RequirementsMDIA: RESPA Requirements

The final rule applies to all RESPA covered loans secured by the dwelling of a consumer. This includes the following:

• Purchase, refinance and home equity loans on principle residences

• Purchase, refinance and home equity loans on secondary residences

• Investment/Rental properties (could be considered exempt, but AFN will treat these in the same manner as it does owner-occupied loans)

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MDIA: Initial DisclosuresMDIA: Initial Disclosures

Preparation of Initial Disclosures

Loan originators or loan processors are required to prepare the initial disclosures. Refer to the AFN Disclosure Checklist for an up-to-date list of disclosures required for each loan type. Refer to the list of APR versus Non-APR fees for accurate preparation of disclosures.

Timing of Initial Disclosures

Initial disclosures must be sent out within three business days of receipt of the initial loan application. This rule does not apply to FHA/VA specific forms, which must still be signed and dated the same day the borrower signs/dates the loan application.

No fees, except a bona fide and reasonable credit fee, may be charged until the borrower receives the initial TIL disclosure. AFN considers the disclosures received by the borrower when they are signed by the borrower(s).

Any additional fees, including the appraisal fee, cannot be collected until the borrower has received and signed initial disclosures. Additional fees can be charged the same day the disclosures are returned signed by the borrower(s).

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MDIA: Application DefinedMDIA: Application Defined

For purposes of MDIA, AFN will use the definition of application provided under Regulation Z as revised by HUD. Application means the submission of a borrower’s financial information in anticipation of a credit decision relating to a federally related mortgage loan. It shall include the following:

• Borrower’s Name• Borrower’s Income• Borrower’s SSN to obtain credit• Property Address• Estimated Property Value• Loan Amount• Any additional information deemed necessary

An application may either be in writing or electronically submitted, including a written record or an oral application. Disclosures are required when all items are received.

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MDIA: Verbiage RequirementsMDIA: Verbiage Requirements

The following verbiage must be added to the disclosures:

“You are not required to complete this agreement merely because you have received these disclosures or signed a loan application.”

The following rules also apply:

• AFN Corporate uses the latest Point and Encompass versions, which include the new verbiage on the disclosures. Branches must ensure their software/disclosures are current and have the updated verbiage.

• The required verbiage must be noticeably added.• All numeric disclosures are still marked “E” for estimate.• This verbiage must also be included in any subsequent disclosures.

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MDIA: Waiting Periods/When to Re-discloseMDIA: Waiting Periods/When to Re-disclose

Seven-day Waiting Period After Disclosure

Once the initial estimated disclosures are provided, there is a seven business day waiting period before borrowers sign loan documents.

The initial seven business day waiting period begins when the borrower receives the initial disclosures. AFN will consider the disclosures received when they are signed by the borrower(s).

The business day definition for the purpose of the waiting periods is similar to the definition used for rescission: Monday – Saturday excluding legal federal holidays. The only difference is: with rescission, when you’re counting days, you may fund the day after the last day in the count; with MDIA, when you’re counting days, you may draw docs on the last day of the count.

When to Re-disclose

If the APR, as defined by RESPA, increases by more than 1/8th of 1% (0.125) from the previously disclosed APR, you must re-disclose.

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MDIA: Waiting Periods/When to Re-disclose MDIA: Waiting Periods/When to Re-disclose (Cont’d)(Cont’d)

Three-day Waiting Period After Re-Disclosure

Any re-disclosure requires an additional three business day waiting period prior to consummation (date the borrowers sign loan documents).

The business day definition for the purpose of the waiting periods is similar to the definition used for rescission: Monday – Saturday excluding legal federal holidays. The only difference is: with rescission, when you’re counting days, you may fund the day after the last day in the count; with MDIA, when you’re counting days, you may draw docs on the last day of the count.

If revised disclosures are mailed, the three business day waiting period will begin after allowing three business days for mail to be delivered, thus loan documents cannot be prepared or signed until six business days have passed.

If revised disclosures are delivered in person, faxed or e-mailed and returned signed and dated by all borrowers, the three business day waiting period may begin based on the date the revised forms are signed/dated.

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MDIA: Initial Disclosure – Day Counting ChartMDIA: Initial Disclosure – Day Counting Chart

* Date borrowers sign/date initial disclosures

*** Applies to scenarios where Saturday is counted as a business day, and there is no legal holiday from the date the initial disclosure was received.

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MDIA: Re-disclosure – Day Counting ChartMDIA: Re-disclosure – Day Counting Chart

* Applies to scenarios where Saturday is counted as a business day, and there is no legal holiday from the date the initial disclosure was received.

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MDIA: Avoid Unnecessary Delays with Loan DocsMDIA: Avoid Unnecessary Delays with Loan Docs

Following are things you can do to help avoid unnecessary delays with the issuance of loan documents:

• Obtain accurate fees for escrow and title before issuing initial disclosures• Do not over- or underestimate fees (including daily interest) on initial

disclosures• Record APR and Non-APR fees correctly when issuing initial disclosures

(see chart)• Do not collect appraisal fees until signed initial disclosures are received• Obtain an updated estimated closing statement from escrow at the time of

loan approval; if a re-disclosure is required, prepare it at that time• Review the APR when the loan is locked or when you know the rate will

change; if re-disclosure is required, prepare it at that time• Use the correct upfront MI Premium or monthly MI Premium (see chart)• Complete Point/Encompass correctly to calculate the monthly MI (see

example)

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MDIA: Calculating the Monthly MIMDIA: Calculating the Monthly MIYou must go beyond the primary MI fields to properly calculate MI pay-ments. In this Encompass example, click the pencil icon next to the MI fields to reveal another box in which you must enter data.

On the 2nd screen, enter “Cancel at 78%” (LTV) and also check the box for “Calculate based on remaining balance.”

MI will not be correct if it is calculated as base loan amount multiplied by the MI factor and divided by 12.

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Completing the TIL


TIL Disclosure Statement – Top of the FormTIL Disclosure Statement – Top of the Form

The top of the TIL lists:

• Applicant Name(s)

• Property Address

• Application Number

• Preparer

• Date prepared

• APR

• Finance Charge

• Amount Financed

• Total of Payments

• Payment Schedule

The last five items are calculations completed by Point or Encompass based on loan data entered.

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TIL Disclosure Statement – Middle of the FormTIL Disclosure Statement – Middle of the Form

This section of the form identifies the lender’s insurance requirements. Under the INSURANCE section, always indicate that Hazard insurance is required, and add Flood Insurance if it is required.

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TIL Disclosure Statement – Bottom of the FormTIL Disclosure Statement – Bottom of the Form

Completion of this section will vary, depending on whether the loan:• Is a purchase or refinance• Is FHA, VA or Conventional• Has a Prepayment Penalty

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TIL Disclosure Statement – Bottom (Continued)TIL Disclosure Statement – Bottom (Continued)Under the SECURITY section, mark “The goods or property being purchased” for a purchase loan, or “Real property you already own” for a refinance.

Under FILING FEES, this amount should match the recording fees shown on the GFE/GFE Itemization.

1

2

Under LATE CHARGE, enter “15” for the number of days late, and “4%” for the penalty percentage if it is a FHA or VA loan, and “5%” if it is a conventional loan.

Under PREPAYMENT, regardless of loan type (Conv, FHA, VA) mark “will not have to pay a penalty;” Conv, VA “will not be entitled to a refund of part of the finance charge;” and FHA “may be entitled to a refund of part of the finance charge.”

Under ASSUMPTION, mark “may, subject to conditions” for FHA/VA loans, and mark “may not” for conventional loans.

For all loan types, mark the “E means an estimate” and “all dates and numerical disclosures except the late payment disclosure are estimates” boxes.

3

4

5

6

12345

6

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TIL – Itemization of Amount FinancedTIL – Itemization of Amount Financed

60

• The date prepared must match the date prepared on the initial TIL.

• The origination charges must match origination charges on page 1 of the GFE.

• Both the TIL and the Itemiz-ation of Amount Financed are to be uploaded to the paperless system as a group under the form definition “TIL (Initial).”

TIL Disclosure Statement (Re-disclosing)TIL Disclosure Statement (Re-disclosing)

61

• Re-disclosure is required if the APR increases by more than .125%.

• You only need to re-disclose the TIL when you re-disclose the GFE if the APR increases by more than .125%.

• The date prepared is the date you re-disclose.

• There is a waiting period before docs can be drawn of 6 days if the re-disclosed TIL is not signed and 3 days if it is signed.

Itemization of Amount Financed (Re-disclosing)Itemization of Amount Financed (Re-disclosing)

62

• The date prepared must match the date prepared on the re-disclosed TIL.

• Both the re-disclosed TIL and the re-disclosed Itemiz-ation of Amount Financed are to be uploaded to the paperless system as a group under the form definition “TIL (Re-disclosed) #1” (#2, or #3).

TIL Disclosure Statement – New FormatTIL Disclosure Statement – New Format

63

• For all applications taken 01/30/2011 and after, the newly revised TIL Disclosure Statement is required.

• The new version of the TIL displays an “Interest Rate and Payment Summary” where the former form had a payment schedule table.

• Be sure you have updated your Encompass or Point version to include this revised TIL Disclosure.

Disclosures


Disclosure Tips Disclosure Tips

65

• Disclosure checklists are available on WebTrac.

• Use print groups prepared by the corporate office for accuracy.

• Use of incorrect information will delay file progress.

Equal Credit Opportunity Act (ECOA) NoticeEqual Credit Opportunity Act (ECOA) Notice

66

The ECOA Notice must have the address of the FTC in the middle section:

Federal Trade CommissionEqual Credit Opportunity600 Pennsylvania AvenueWashington, DC 20580

- OR -

Federal Trade CommissionCRC-240Washington, DC 20580

Servicing Disclosure StatementServicing Disclosure Statement

67

• The initial disclosure date in this example is 01/04/2011.

• Under Servicing Transfer Information, the checkbox for “We do not service mortgage loans of the type for which you applied. We intend to assign, sell, or transfer the servicing of your mortgage loan before the first payment is due” must be marked.

01/04

CA Fair Lending NoticeCA Fair Lending Notice

68

• The initial disclosure date in this example is 01/04/2011.

• The addresses and phone numbers for the Dept of Real Estate (DRE) and the Dept of Corporations (DOC) must appear in the space above the Acknowledgement. Department of Real Estate320 W. 4th St., Ste 350Los Angeles, CA 90013-1105(213) 620-2072

Department of Corporations320 W. 4th St., Ste 750Los Angeles, CA 90013-2344(866) 275-2677

01/04

FHA Identity of Interest CertificationFHA Identity of Interest Certification

69

• One of the options must be checked.

• If the borrower has a relationship with the seller, the LTV will be limited.

CA Domestic Partnership AddendumCA Domestic Partnership Addendum

70

• If the top 2 boxes are both marked, there is no action to be taken based on this form.

• If box 3 or 4 is marked, it will be treated as community property; we must require a grant deed from the domes-tic partner before we close the transaction.

• If box 1 is marked and box 2 is not marked, get clarifica-tion before proceeding to docs (this may also require a grant deed from a domestic partner).

Thank you for attending.

Any questions?


Documents

GFE & TIL Disclosures how to get them right… © 2012 American Financial Network. All Rights Reserved.Updated 01/11/2012