DIRT

&TILA RESPA

Integrated Disclosures

Presented by:Lacy Smith WallaceKAAR Affiliate MemberRegions Bank

Slide 2

SPECIAL INFORMATION BOOKLET

LEARNING OBJECTIVES

CLOSING DISCLOSURE

SUMMARY

LOAN ESTIMATE

INTRODUCTION AGENDA

Slide 3

SPECIAL INFORMATION BOOKLET

CLOSING DISCLOSURE

LOAN ESTIMATE

AGENDA

introduction

SUMMARYINTRODUCTION

introduction

4

GFE TIL

BACKGROUND

HUD-1

introduction

5

BACKGROUND

2010: RESPA changes

2011: TILA changes

DODD FRANK ACT 2013:

Final Regs published

Oct 3, 2015: New Requirements

CFPB

introduction

6

WHICH LOANS ARE AFFECTED?

Applies to:– Residential Mortgages– HELOANS

Does not apply to:– Home equity lines of credit (HELOCs)– Certain no-interest housing assistance programs– Reverse mortgages– Loans for personal property not attached to real estate

(e.g., houseboat or manufactured home)

introduction

7

NEW DOCUMENTS

GFE Initial TILLoan

Estimate+ =

introduction

8

NEW DOCUMENTS

Final TILClosing

DisclosureHUD-1 + =

introduction

9

SPECIAL INFORMATION BOOKLET

Old New=

Slide 10

SPECIAL INFORMATION BOOKLET

CLOSING DISCLOSURE

AGENDAINTRODUCTION SUMMARY

LOAN ESTIMATE

loan estimate

loan estimate

11

PURPOSE

Discloses key features, costs, and risks

Combines GFE and initial TIL

Is based on best information available

loan estimate

12

WHAT IS AN “APPLICATION”?

Includes six data elements:– Name– Income– Social Security number– Property address– Estimate of property value– Loan amount

Standardizes definition for all Lenders

loan estimate

13

TIMING REQUIREMENTS

No change in timing requirements– “Business day” still includes Saturdays

Send by third business day after app received(Unless app denied or withdrawn within 3 days)

Deliver at least seven business days before closing

loan estimate

14

FEE & DOCUMENT COLLECTION

Mirrors current policy

Borrower must receive Loan Estimate before:– Payment collected– Requiring documentation (e.g. Sales Contract)

Note: Borrowers can still offer docs voluntarily

Lender must document borrower’s intent to proceed

loan estimate

15

FEE TOLERANCES

Same three tolerance categories:– Fees that cannot change– Fees that can increase by a limited amount (i.e., 10%)– Fees that can change

Certain fees have changed categories:– Fees paid to third parties if consumer not permitted to shop

• Appraisal• Credit Report• Flood Certificate• Tax Certificate• Some transaction specific fees (e.g., CP inspections)

loan estimate

16

LENDER CREDITS

Cannot decrease (Loan Estimate vs. Closing Disclosure)

Exception: When rate is locked/re-locked after initial Loan Estimate provided

loan estimate

17

REVISED LOAN ESTIMATE

Permitted when a “changed circumstance” occurs– Required within three business days

Permitted when the interest rate is locked

Must be received at least four business days prior to closing

Slide 18

CLOSING DISCLOSURE

AGENDAINTRODUCTION

LOAN ESTIMATE

SUMMARY

SPECIAL INFORMATION BOOKLET

special info booklet

special info booklet

19

PURPOSE

Provides basic information about the mortgage process

Required for all purchase money transactions– Including 1st position HELOCs– Alternative booklets available for

HELOCs

special info booklet

20

TIMING REQUIREMENTS

No change in timing requirement– Provided with initial Loan Estimate

Not required if:– If application denied or withdrawn within the three-day period

Slide 21

AGENDAINTRODUCTION

LOAN ESTIMATE

SUMMARY

SPECIAL INFORMATION BOOKLET

CLOSING

DISCLOSURE

closing disclosure

closing disclosure

22

PURPOSE

Replaces HUD-1 and “final” TIL

Provides information helpful in understanding loan costs

Provided by the creditor

closing disclosure

23

TIMING REQUIREMENTS

Must be received three business days prior to closing– Saturdays included– Receipt date dependent on delivery method

Exceptions:– Seller’s copy– Personal financial emergency

closing disclosure

24

Thurs. Fri. Sat. Sun. Mon. Tues. Wed. Thurs.REC’D

CLOSESENT

X

32103210

TIMING REQUIREMENTS: EXAMPLE 1Sent (No “Early Receipt” date)

closing disclosure

25

Thurs. Fri. Sat. Sun. Mon. Tues. Wed. Thurs.REC’D

SENT

X

10

CLOSE

3210

TIMING REQUIREMENTS: EXAMPLE 2Emailed (With “Early Receipt” date)

closing disclosure

26

REVISIONS BEFORE CLOSING

New three day wait period required when:– APR outside of standard tolerances– Loan product changes (Fixed to ARM)– Prepayment penalty is added

New three day wait period NOT required when:– Changes made outside of 3 listed above

(Must be available for inspection 1 day before closing)

closing disclosure

27

MISCELLANEOUS REQUIREMENTS

Upcharges not allowed

Fee cannot be charged for preparing Closing Disclosure

Slide 28

AGENDAINTRODUCTION

LOAN ESTIMATE

SPECIAL INFORMATION BOOKLET

CLOSING DISCLOSURE

SUMMARY

summary

summary

29

WHAT ARE THE MAJOR CHANGES?

New disclosures:– Loan Estimate– Closing Disclosure

Revisions to Special Information Booklet

Reclassified categories of certain fees

New waiting period for Closing Disclosures

summary

30

HOW CAN YOU HELP?

Consult lender when establishing Contract closing date

Provide Closing Agent Name at time of Contract

Encourage customer to obtain Insurance quickly

Assist in setting appropriate expectations with customer– Understand required waiting periods– Understand impact changes can have on closing

Encourage customer to use eConsent to receive Disclosures via email