TRID: July 2017 Final Rule Updates IBA Conference · 2017-11-13 · This publication contains the author’s opinion on the subject ... A lender is prohibited from charging any fee

Turning Regulations into PLAIN ENGLISH!

TRID: July 2017 Final Rule Updates

IBA Conference November 2017

Table of Contents

* Words in Italics are taken directly from the applicable regulations.

TRID ....................................................................................................................................

I. Pre Disclosure Restrictions ..................................................................................... 1

II. “Good Faith” Tolerance .......................................................................................... 2

III. Shopping ................................................................................................................. 5

IV. Loan Estimate ......................................................................................................... 7

V. Revising the Loan Estimate .................................................................................. 21

VI. Closing Disclosure ................................................................................................ 22

VII. Construction, Multiple Advance and Two-Phase Loans ...................................... 61

VIII. Revising the Closing Disclosure ........................................................................... 70

IX. “Good Faith Analysis” Tolerance Cures ............................................................... 73

X. Seller’s Version ..................................................................................................... 75

XI. Integrated Mortgage Disclosure Tools & Resources ............................................ 78

A

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. The information contained within this manual pertains to federal regulations. Banker's Compliance Consulting makes every attempt to understand applicable state laws as well; however, this information may not be represented in this manual. If you are aware of state laws that conflict with information presented in this manual, please contact Banker's Compliance Consulting. This publication contains the author’s opinion on the subject. All rights reserved. This manual may not be reproduced in whole or in part in any form whatsoever without permission from the publisher. The publisher hereby specifically disclaims any personal liability for loss or risk incurred as a consequence of the advice or information presented in this book.

Copyright © 1997 – 2017 All rights reserved. Printed in the United States of America

Banker’s Compliance Consulting PO Box 87

Central City, Nebraska 68826 [email protected]

800-847-1653Fax: 308-946-2147

B

Banker’s Compliance Consulting 1 1-800-847-1653

TRID Regulation Z – 12 CFR 1026

Regulation X – 12 CFR 1024

I. Pre Disclosure Restrictions:Prior to receipt of a covered TRID application: [Commentary to §1026.1(d)(5) #1(ii)]

A. Fees:

A lender is prohibited from charging any fee other than a fee to obtain a credit report before the applicant hasreceived a Loan Estimate and indicated an intent to proceed. [§1026.19(e)(2)(i)]

B. Verifications:

A lender is prohibited from requiring verification documents before providing a Loan Estimate.[§1026.19(e)(2)(iii)]

C. Disclaimer Requirement (Pre-Disclosure Estimates):

A lender may provide consumers with written estimates prior to receiving a completed application. However, inorder to prevent confusion with the Loan Estimate, any written estimate provided prior to the Loan Estimatemust include the following disclaimer. The disclaimer must be a minimum 12-point font at the top of the frontof the first page of the Loan Estimate. The written estimate of terms or costs may not be made with headings,content, and format substantially similar to the Loan Estimate or Closing Disclosure. [§1026.19(e)(2)(ii)].

Exceptions to the disclaimer requirement include: [Commentary to §1026.19(e)(2)(ii) #1]

1. Generic Closing Costs List:

A preprinted list of typical closing costs for the consumer’s area.

2. Product Rate Sheet:

A list of available rates for different loan products.

3. Advertising:

The disclaimer is not required for advertisements.

Banker’s Compliance Consulting 61"800"847"1653*

2. Exemptions:

888


TRID

II. “Good Faith” Tolerances:The Loan Estimate …must be provided in good faith. …if any information necessary for an accurate disclosure isunknown to the creditor, the creditor shall make the disclosure based on the best information reasonably availableto the creditor at the time the disclosure is provided to the consumer. The “reasonably available” standard requiresthat the creditor, acting in good faith, exercise due diligence in obtaining information. [Commentary to§1026.19(e)(1)(i) #1]

Generally, an estimated closing cost will be considered to be “in good faith” if the actual final amount paid (unrounded) by the consumer on final Closing Disclosure does not exceed the amount (unrounded) indicated on the final (i.e., due to changed circumstances) Loan Estimate Disclosure (i.e., zero tolerance). [§1026.19(e)(3) and Commentary to §1026.19(e)(3)]

A. Zero Tolerance:

Unless otherwise specified the following fees (not necessarily all inclusive) cannot increase:

1. Lender or Broker Fees

2. Lender or Broker Credits

3. Investor Fees

4. Affiliate (Lender or Broker) Fees:

Any fee paid to another who is owned, controlled or can be voted upon in a capacity meeting or exceeding25% (also includes a controlling interest in the election of directors).

5. Transfer Taxes

6. Third Party Service Provider Fees (Lender or Broker Required)

Where the consumer is not allowed to shop for a provider. For example (illustrative only):

a. Credit Report

b. Flood Determination

c. Appraisal

d. Title Services


TRID

B. 10% Tolerance: [§1026.19(e)(3)(ii)]

The cumulative total of fees for applicable third-party services required by the bank and government recording fees cannot exceed the corresponding Loan Estimate Disclosure cumulative total by more than 10%. Included are:

1. Unaffiliated Third Party Service Provider Fees (Lender or Broker Required):

Where the consumer was allowed to shop for the service provider. This is regardless of whether or not the lender complied with the shopping list requirements. [Commentary to §1026.19(e)(3)(iii) #2]

2. Government Recording Fees

C. Unlimited Tolerance: [§1026.19(e)(3)(iii)]

Some charges may exceed the amounts disclosed (even if paid to an affiliate) on the Loan Estimate if the estimate was based upon the best information available to the creditor at the time it was disclosed. Those charges include:

1. Prepaid (Odd Days) Interest

2. Property Insurance Premiums:

All property insurance premiums (i.e., hazard, flood, etc.), required or not, are subject to an unlimited tolerance. However, the lender does not comply with the “good faith” requirement if property insurance is required but not disclosed.

The rule provides that property insurance premiums are included in the category of settlement charges not subject to a tolerance, whether or not the insurance provider is a lender affiliate. [Federal Register 12/31/13 page 79829]

3. Escrow Deposit

4. Third-Party Service Provider Fees (Lender or Broker Required):

If the consumer was allowed to shop and selected a provider not included on the shopping list.


TRID

5. Voluntary Third-Party Services:

Charges for third-party services not required by the lender. However, it’s not absolute. For example, if the consumer informs the creditor that the consumer will obtain a type of inspection not required by the creditor, the creditor must include the charge for that item in the disclosures provided… but the actual amount of the inspection fee need not be compared to the original estimate for the inspection fee to perform the good faith analysis… [Commentary to §1026.19(e)(3)(iii) #3]

But,…if the subject property is located in a jurisdiction where consumers are customarily represented at closing by their own attorney, even though it is not a requirement, and the creditor fails to include a fee for the consumer’s attorney, or includes an unreasonably low estimate for such fee, on the original estimates provided… then the creditor’s failure to disclose, or unreasonably low estimation, does not comply… [Commentary to §1026.19(e)(3)(iii) #3]

6. Property Taxes:

Additionally, …if the creditor fails to include a charge for property taxes, or includes an unreasonably low estimate for that charge, on the original estimates provided…then the creditor’s failure to disclose, or unreasonably low estimation, does not comply… [Commentary to §1026.19(e)(3)(iii) #3]


TRID

III. Shopping: If a consumer is allowed to shop for a required settlement service: [§1026.19(e)(1)(vi)]

A. Written List:

The lender must identify the service(s), identify at least one provider available where the consumer or property is located and include a statement indicating that the consumer may choose a provider not included on the list.

B. Settlement Service Provider Information: [Commentary to §1026.19(e)(1)(vi) #4]

1. Name

2. Address

3. Telephone Number

C. Delivery and Timing:

The list must be provided separately from the Loan Estimate within three business days after application.

D. Disclosure of an Affiliate:

A lender may identify an affiliated business on the shopping list. The Affiliated Business Arrangement Disclosure must be provided at the same time the list is provided to the borrower or at the time of referral, whichever is earlier. [Commentary to §1026.19(e)(1)(vi) #7]

E. Reasonable Requirements:

Creditors may impose reasonable service provider requirements, such as requiring any provider to be appropriately licensed. [Commentary to §1026.19(e)(1)(vi) #1]

F. Model Form:

Creditors using form H-27 in appendix H properly are deemed to be in compliance… Creditors may make changes in the format or content of form H-27 in appendix H and be deemed to be in compliance… so long as the changes do not affect the substance, clarity, or meaningful sequence of the form. An acceptable change… includes, for example, deleting the column for estimated fee amounts. [Commentary to §1026.19(e)(1)(vi) #3]

G. Limited List ≠ Shopping:

A consumer is not allowed to shop if the creditor requires them to choose a provider from a list supplied by the creditor (i.e., a limited list). [Commentary to §1026.19(e)(1)(vi) #1]


TRID

Service Provider List

LOAN ID # 1234567891330172608APPLICANTS: Michael Jones and Mary Stone DATE ISSUED: 2/15/2013

Service Estimate Provider We Identified Contact Information

Pest Inspection Fee $135 Pest Co. Jane Polk123 Avenue AAnytown, ST [email protected]

Survey Fee $65 Surveyor LLC Bill Barnes456 Avenue BAnytown, ST [email protected]

Title – Insurance Binder $700 Gamma Title Co. Joanna Campbell789 Avenue CAnytown, ST [email protected]

Title – Lender’s Title Policy $535

Title – Settlement Agent Fee $502

Title – Title Search $1,261

Title – Lender’s Title Insurance $1,100 Delta Title Inc. Frank Fields321 Avenue DAnytown, ST [email protected]

Title – Other Title Services $1,000

Title – Settlement Agent Fee $350

Additional Details for Services You Can Shop For

To get you started with shopping, this list identifies some providers for the services you can shop for (see Section C on page 2 of your Loan Estimate).

You can select these providers or shop for your own providers.


TRID

IV. Loan Estimate: [§1026.19(e)]

A. Content and Format: [§1026.37]

1. General Information: [§1026.37(a)]

a. Estimated Property Value

For transactions that do not involve a seller, the estimated value of the property… labeled “Prop. Value”. [§1026.37(a)(7)] The creditor may use the estimate provided by the consumer… unless it has performed its own estimate…in which case it must use its own estimate (evaluation or appraisal). The estimated value …may include, at the creditor’s option, the estimated value of the improvements to be made on the property in transactions involving construction. [Commentary to §1026.37(a)(7) #1]

Loan Terms Can this amount increase after closing?

Loan Amount $150,000 NO

Interest Rate 4.25% NO

Monthly Principal & InterestSee Projected Payments below for your Estimated Total Monthly Payment

$737.91

NO

Does the loan have these features?

Prepayment Penalty NOBalloon Payment NO

DATE ISSUED 2/15/2013APPLICANTS Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST 12345 PROPERTY 123 Anywhere Street Anytown, ST 12345EST. PROP. VALUE $180,000

LOAN TERM 30 yearsPURPOSE Refinance cePRODUCT Fixed RateLOAN TYPE x Conventional FHA VA _____________LOAN ID # 1234567891330172608RATE LOCK NO x YES, until 4/16/2013 at 5:00 p.m. EDT

FICUS BANK4321 Random Boulevard • Somecity, ST 12340

Loan Estimate

Projected Payments

Payment Calculation Years 1-4 Years 5-30

Principal & Interest

Mortgage Insurance

Estimated EscrowAmount can increase over time

$737.91

+ 82

+ 206

$737.91

+ —

+ 206

Estimated Total Monthly Payment $1,026 $944

Estimated Taxes, Insurance & AssessmentsAmount can increase over time

$206a month

Before closing, your interest rate, points, and lender credits can change unless you lock the interest rate. All other estimated closing costs expire on 3/4/2013 at 5:00 p.m. EDT

Save this Loan Estimate to compare with your Closing Disclosure.

PAGE 1 OF 3 • LOAN ID # 123456789LOAN ESTIMATE

Visit www.consumerfinance.gov/mortgage-estimate for general information and tools.

See Section G on page 2 for escrowed property costs. You must pay for other property costs separately.

This estimate includes In escrow?x Property Taxes YESx Homeowner’s Insurance YES

Other:

Estimated Closing Costs $5,099 Includes $3,521 in Loan Costs + $2,078 in Other Costs – $500 in Lender Credits. See page 2 for details.

Estimated Cash to Close $24,901 Includes Closing Costs. See Calculating Cash to Close on page 2 for details.

Costs at Closing

From x To Borrower


TRID

b. Rate Lock:

A statement of whether the interest rate… is locked for a specific period of time… [§1026.37(a)(13)] …the interest rate is locked for a specific period of time if the creditor has agreed to extend credit to the consumer at a given rate, subject to contingencies that are described in any rate lock agreement between the creditor and consumer. [Commentary to §1026.37(a)(13) #1]

…where a creditor has a policy to honor the quoted rate, but does not lock the rate pursuant to a written agreement with the consumer, the creditor would disclose “no”… The Bureau believes this disclosure is appropriate to aid the consumer's understanding of the transaction, because the creditor would not be bound by an agreement to provide the interest rate to the consumer at consummation. [Federal Register 12/31/13 page 79919]

i. Expiration:

For transactions in which the interest rate is locked for a specific period of time, the creditor must provide the date and time (including the applicable time zone) when that period ends. [§1026.37(a)(13)(i)] For example, if the creditor is located in Nebraska and determines that the Loan Estimate will expire at 5:00 p.m. while standard time is in effect, the disclosure must include a reference to the Central time zone (i.e., 5:00 p.m. CST).

ii. Statement:

The “Rate Lock”… shall be accompanied by a statement that the interest rate, any points, and any lender credits may change unless the interest rate has been locked, and the date and time (including the applicable time zone) at which estimated closing costs expire (at least 10 “general” business days). [§1026.37(a)(13)(ii)] The …creditor may extend the period of availability to expire beyond the time disclosed (orally or in writing)… [Commentary to §1026.37(a)(13) #4]





$761.78

NO


Prepayment Penalty YES • As high as $3,240 if you pay off the loan during the first 2 years

Balloon Payment NO

DATE ISSUED 2/15/2013APPLICANTS Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST 12345 PROPERTY 456 Somewhere Avenue Anytown, ST 12345SALE PRICE $180,000

LOAN TERM 30 yearsPURPOSE Purchase cePRODUCT Fixed RateLOAN TYPE x Conventional FHA VA _____________LOAN ID # 1234567891330172608RATE LOCK NO x YES, until 4/16/2013 at 5:00 p.m. EDT


Loan Estimate

Projected Payments



Mortgage Insurance


$761.78

+ 82

+ 206

$761.78

+ —

+ 206



$206 a month







Other:

Costs at Closing




TRID

2. Projected Payments – Estimated Taxes, Insurance and Assessments:

The total monthly payment of estimated property taxes (including improvements to be made after consummation), homeowner’s insurance (initial year after the transaction) and assessments must be disclosed even if there is no escrow account. Mark the applicable box to indicate inclusion within the estimate and state “Yes”, “No” or “Some” to indicate escrow status. [§1026.37(c)(4) and Commentary to §1026.37(c)(4)(iv) #2] Any “other” amounts must include a description. If “other” includes more than one item …the creditor may disclose a descriptive statement of one such amount along with an indication that additional amounts are also included, such as by using the phrase “and additional costs”. [Commentary to §1026.37(c)(4)(iv) #1]





$761.78

NO



Balloon Payment NO

DATE ISSUED 2/15/2013APPLICANTS Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST 12345 PROPERTY 456 Somewhere Avenue Anytown, ST 12345SALE PRICE $180,000

LOAN TERM 30 yearsPURPOSE Purchase cePRODUCT Fixed RateLOAN TYPE x Conventional FHA VA _____________LOAN ID # 1234567891330172608RATE LOCK NO x YES, until 4/16/2013 at 5:00 p.m. EDT


Loan Estimate

Projected Payments



Mortgage Insurance


$761.78

+ 82

+ 206

$761.78

+ —

+ 206



$206 a month







Other:

Costs at Closing




TRID

3. Closing Cost Details:

…all loan costs associated with the transaction. [§1026.37(f)] Generally, round all dollar amounts to the nearest whole dollar. For example, $164.50 is $165 and $164.49 is $164. [§1026.37(o)(4)(i)(A)]

Loan Costs Other Costs

A. Origination Charges $1,802.25 % of Loan Amount (Points) $405Application Fee $300 Underwriting Fee $1,097

B. Services You Cannot Shop For $672Appraisal Fee $405Credit Report Fee $30Flood Determination Fee $20Flood Monitoring Fee $32Tax Monitoring Fee $75Tax Status Research Fee $110

C. Services You Can Shop For $3,198Pest Inspection Fee $135Survey Fee $65Title – Insurance Binder $700Title – Lender’s Title Policy $535Title – Settlement Agent Fee $502Title – Title Search $1,261

D. TOTAL LOAN COSTS (A + B + C) $5,672

E. Taxes and Other Government Fees $85Recording Fees and Other Taxes $85Transfer Taxes

F. Prepaids $867 Homeowner’s Insurance Premium ( 6 months) $605Mortgage Insurance Premium ( months) Prepaid Interest ( $17.44 per day for 15 days @ 3.875%) $262Property Taxes ( months)

G. Initial Escrow Payment at Closing $413Homeowner’s Insurance $100.83 per month for 23mo. $202Mortgage Insurance per month for 0 mo. Property Taxes $105.30 per month for 2 mo. $211

H. Other $1,017Title – Owner’s Title Policy (optional) $1,017

I. TOTAL OTHER COSTS (E + F + G + H) $2,382

J. TOTAL CLOSING COSTS $8,054D + I $8,054Lender Credits

Total Closing Costs (J) $8,054Closing Costs Financed (Paid from your Loan Amount) $0 Down Payment/Funds from Borrower $18,000 Deposit – $10,000Funds for Borrower $0Seller Credits $0 Adjustments and Other Credits $0

Estimated Cash to Close $16,054

Calculating Cash to Close


Closing Cost Details


TRID

a. Lender Credits:

i. General Credits:

A credit from the lender that does not offset any specific fee(s) disclosed within the Loan Estimate. [Commentary to §1026.37(g)(6)(ii) #1]

ii. Specific Credits or Rebates:

A credit or rebate from the lender designed to offset some or all of the closing costs disclosed within the Loan Estimate. [Commentary to §1026.37(g)(6)(ii) #1 and #2]


A. Origination Charges $1,950.5 % of Loan Amount (Points) $750Application Fee $250 Origination Fee $450Underwriting Fee $500


C. Services You Can Shop For $936Pest Inspection Fee $85Title – Insurance Binder $50Title – Lender’s Title Policy $251Title – Settlement Agent Fee $350Title – Title Search $200



F. Prepaids $1,585 Homeowner’s Insurance Premium ( 6 months) $605Mortgage Insurance Premium ( 1 months) $82Prepaid Interest ( $17.71 per day for 15 days @ 4.25%) $266Property Taxes ( 6 months) $632

G. Initial Escrow Payment at Closing $413Homeowner’s Insurance $100.83 per month for 23mo. $202Mortgage Insurance per month for 23mo. Property Taxes $105.30 per month for 2 mo. $211

H. Other $0


J. TOTAL CLOSING COSTS $5,099D + I $5,599Lender Credits – $500

Loan Amount $150,000Total Closing Costs (J) – $5,099Estimated Total Payoffs and Payments – $120,000

Estimated Cash to Close From x To Borrower $24,901

Estimated Closing Costs Financed (Paid from your Loan Amount) $5,099





TRID

b. Calculating Cash To Close: [§1026.37(h)(1)]

For all transactions… the total amount of cash or other funds that must be provided by the consumer at consummation, with an itemization of that amount into the following component amounts… as applicable:

i. With A Seller:

A.) Total Closing Costs:

This is from Section J of the Loan Estimate. [§1026.37(h)(1)(i)]

B.) Closing Costs Financed:

1.) General Rule:

Note Amount

− 3rd Party Payments (purchase price, construction costs, debt payoffs, etc., do not include loan closing costs)

= Positive Number, Disclose as a Negative Number (not to exceed Total Closing Costs under section J)

or

= $0 or Negative, Disclose $0

[§1026.37(h)(1)(ii), Commentary to §1026.37(h)(1)(ii)]

2.) Simultaneous Subordinate Financing:

Do not include the sales price within the total amount of payments to third parties. The estimated total amount of payments to third parties only includes payments occurring in the simultaneous subordinate financing transaction other than payments toward the sale price. [Commentary to §1026.37(h)(1) #2]


















TRID

C.) Down Payment / Funds From Borrower:

1.) Purchase Transactions:

Purchase Price

− Loan Amount

= Positive Number or $0, Disclose

or

= Negative Number, Disclose $0

(i.e. purchase plus construction and purchase plus improvements loans, etc.)

[§1026.37(h)(1)(iii), Commentary to §1026.37(h)(1)(iii) #1 and §1026.37(h)(1)(v)(B)]

2.) Non-Purchase and Simultaneous Subordinate Financing Transactions:

See the Funds for Borrower section calculation; disclose $0 within the Down Payment/Funds from Borrower section. [Commentary to §1026.37(h)(1) #2]

D.) Deposit:

Earnest money or any other amount paid to the seller or held in trust via the purchase agreement disclosed as a negative number or $0. [§1026.37(h)(1)(iv)(A) & Commentary to §1026.37(h)(1)(iv)]


















TRID

E.) Funds for Borrower:

Total Debt Payoffs*

−Loan Amount (less closing costs financed)

= Positive Number:

Disclose the positive in the Down Payment/Funds From Borrower section and $0 in this section.

or

= Negative Number:

Disclose the negative number in this section and $0 in the Down Payment/Funds From Borrower section.

or

= $0, Disclose $0 in both this section and the Down Payment/Funds from Borrower section.

[§1026.37(h)(1)(v)]

*On the Simultaneous Subordinate Financing Loan Estimate – Do not include the sales price within the total debt payoffs. The estimated total amount of payments to third parties only includes payments occurring in the simultaneous subordinate financing transaction other than payments toward the sale price. [Commentary to §1026.37(h)(1) #2]


















TRID

F.) Seller Credits:

The total amount that the seller will pay for total loan costs… and total other costs… to the extent known (via verbal or written contract), disclosed as a negative number… [§1026.37(h)(1)(vi)]

1.) Non-Specific Seller Credits:

…general payments from the seller to the consumer that do not pay for a particular fee on the disclosures… known to the creditor at the time of delivery of the Loan Estimate, are disclosed… in this section. For example, a creditor may learn the amount of seller credits that will be paid in the transaction from information obtained from the consumer, from a review of the purchase and sale contract, or from information obtained from a real estate agent in the transaction. [Commentary to §1026.37(h)(1)(vi) #1]

2.) Specific Seller Credits:

To the extent known by the creditor at the time of delivery of the Loan Estimate, specific seller credits (i.e. for loan costs or other costs)… may be either disclosed… as a seller credit …or reflected in the amounts disclosed for those specific items… within the Loan Costs or Other Costs sections.

a.) Partial Seller Credit:

For example, if the creditor knows at the time of the delivery of the Loan Estimate that the seller has agreed to pay half of a $100 required pest inspection fee, the creditor may either disclose the required pest inspection fee as $100… within the Loan Costs section and …with a $50 seller credit disclosed… as a seller credit or …disclose the required pest inspection fee as $50… within the Loan Costs section …reflecting the specific seller credit in the amount disclosed for the pest inspection fee.

b.) Full Seller Credit:

If the creditor knows at the time of the delivery of the Loan Estimate that the seller has agreed to pay the entire $100 pest inspection fee, the creditor may either disclose the required pest inspection fee as $100… within the Loan Costs section …with a $100 seller credit disclosed…or disclose nothing… within the Loan Costs section …reflecting that the specific seller credit will cover the entire pest inspection fee. [Commentary to §1026.37(h)(1)(vi) #2]


















TRID

G.) Adjustments and Other Credits:

If known (via verbal, written contract, the consumer, realtor, etc.) …the amount of all loan costs… and other costs… that are paid by persons other than the loan originator, creditor, consumer, or seller, together with any other amounts not otherwise disclosed… that are required to be paid by the consumer at closing in a transaction… or pursuant to a purchase and sale contract, labeled “Adjustments and Other Credits”… [§1026.37(h)(1)(vii)] Disclose the sum as a positive or negative number, as applicable. [Commentary to §1026.37(h)(1)(vii) #6]

1.) Gifts (Credit):

Include funds provided to the consumer by a family member, developer or builder organization, etc. Do not include amounts provided in advance of closing. [Commentary to §1026.37(h)(1)(vii) #1 and #2]

2.) Subordinate Financing or Other Sources (Credit):

Funds that are provided to the consumer from the proceeds of subordinate financing, local or State housing assistance grants, or other similar sources are included in the amount disclosed… on the first-lien transaction Loan Estimate. [Commentary to §1026.37(h)(1)(vii) #5]

3.) Adjustments:

Adjustments that require additional funds from the consumer in a transaction… or pursuant to the real estate purchase and sale contract, such as for additional personal property that will be disclosed on the Closing Disclosure… or adjustments that will be disclosed on the Closing Disclosure… are only included in the amount disclosed… if such amounts are not included… as debt being satisfied in the transaction. Other examples of adjustments for additional funds from the consumer include payoffs of secured or unsecured debt in a purchase transaction… or prorations for property taxes and homeowner’s association dues. The total amount disclosed… is a sum of adjustments requiring additional funds from the consumer, calculated as positive amounts, and other credits… calculated as negative amounts. [Commentary to §1026.37(h)(1)(vii) #6]


















TRID

H.) Estimated Cash to Close:

The sum of the amounts… of this section. [§1026.37(h)(1)(viii)] A positive number indicates the amount that the consumer will pay at consummation. A negative number indicates the amount that the consumer will receive at consummation. A result of zero indicates that the consumer will neither pay nor receive any amount at consummation. [Commentary to §1026.37(h)(1)(viii) #1]


















TRID

ii. Without A Seller:

This table is an optional method of disclosing cash to close in a transaction that does not involve a seller or a simultaneous subordinate loan that does not involve the seller (i.e. the first lien loan records all of the seller’s transaction). If this table is disclosed, it must correspond to the applicable “Costs At Closing” disclosure table (i.e., From / To Borrower). [§1026.37(h)(2) and Commentary to §1026.37(h)(2) #1]

A.) Loan Amount [§1026.37(h)(2)(i)]

B.) Total Closing Costs:

This is from Section J of the Loan Estimate, disclosed as a negative number (if section J is positive) or as a positive number (if section J is negative). [§1026.37(h)(2)(ii)]

C.) Estimated Total Payoffs and Payments:

The total amount of payoffs and payments to be made to third parties not otherwise disclosed… within the Closing Costs Details section of the Loan Estimate, disclosed as a negative or positive (if paid with outside funds of the consumer or a third party) number. [§1026.37(h)(2)(iii) & Commentary to §1026.37(h)(2)(iii) #1 and #2(ii)] Examples include but are not limited to:

1.) Existing Liens

2.) Other Loans

3.) Credit Cards

4.) Other Debts

5.) Construction Costs

6.) Other Credits or Amounts Paid by Third Parties









H. Other $0










TRID


a.) On the First Lien Loan Estimate:

On the Loan Estimate for a first-lien transaction… such as a refinance transaction that also has simultaneous subordinate financing, the proceeds of the simultaneous subordinate financing are included, as a positive number… The total amount disclosed… is a negative number unless the proceeds from the subordinate financing and any amounts entered as credits… equal or exceed the total amount of other payoffs and payments that are included… If the proceeds from the subordinate financing and any amounts entered as credits… equal or exceed the total amount of other payoffs and payments that are included… the total amount… is disclosed as $0 or a positive number. [Commentary to §1026.37(h)(2)(iii) #2(i)]

b.) On the Subordinate Lien Loan Estimate:

…the proceeds of the subordinate financing that will be applied to the first-lien transaction may be included in the payoffs and payments disclosure (as a negative number)… [Commentary to §1026.37(h)(2)(iii) #2(ii)]

D.) Estimated Cash To or From Borrower:

The amount of cash or other funds due from or to the consumer and a statement of whether the disclosed estimated amount is due from or to the consumer, calculated by the sum of the amounts disclosed under… “Loan Amount”, “Total Closing Costs” and “Estimated Total Payoffs and Payments”. …labeled “Cash to Close”… [§1026.37(h)(2)(iv)]

E.) Estimated Closing Costs Financed:

The sum of the amounts disclosed under… “Loan Amount” and “Estimated Total Payoffs and Payments” …but only to the extent that the sum is greater than zero and less than or equal to the sum disclosed under… “Total Closing Costs” (Loan Estimate section J) …labeled, “Closing Costs Financed (Paid from your Loan Amount)”. [§1026.37(h)(2)(v)]









H. Other $0










TRID

4. Additional Information About This Loan - Total Interest Percentage (TIP):

The total amount of interest (including prepaid interest) that the consumer will pay over the life of the loan, expressed as a percentage of the amount of credit extended, using the term “Total Interest Percentage”, the abbreviation “TIP”, and the statement, “The total amount of interest that you will pay over the loan term as a percentage of your loan amount”. [§1026.37(l)(3) and Commentary to §1026.37(l)(3) #1] Disclose by rounding exact amounts to three decimal places. Drop any trailing zeros to the right of the decimal point. For example, 7.250% is disclosed as 7.25%, 7.2557% is disclosed as 7.256% and 7.000% is disclosed as 7%. [§1026.37(o)(4)(ii)]

LENDER Ficus Bank NMLS/__ LICENSE ID

LOAN OFFICER Joe Smith NMLS/__ LICENSE ID 12345EMAIL [email protected] 123-456-7890

Comparisons Use these measures to compare this loan with other loans.

In 5 Years $56,582 Total you will have paid in principal, interest, mortgage insurance, and loan costs.

$15,773 Principal you will have paid off.

Annual Percentage Rate (APR) 4.274% Your costs over the loan term expressed as a rate. This is not your interest rate.

Total Interest Percentage (TIP) 69.45% The total amount of interest that you will pay over the loan term as a percentage of your loan amount.

We may order an appraisal to determine the property’s value and charge you for this appraisal. We will promptly give you a copy of any appraisal, even if your loan does not close. You can pay for an additional appraisal for your own use at your own cost.

If you sell or transfer this property to another person, we will allow, under certain conditions, this person to assume this loan on the original terms. x will not allow assumption of this loan on the original terms.

This loan requires homeowner’s insurance on the property, which you may obtain from a company of your choice that we find acceptable.

If your payment is more than 15 days late, we will charge a late fee of 5% of the monthly principal and interest payment.

Refinancing this loan will depend on your future financial situation, the property value, and market conditions. You may not be able to refinance this loan.

We intend to service your loan. If so, you will make your payments to us.x to transfer servicing of your loan.

Appraisal

Assumption

Homeowner’s Insurance

Late Payment

Refinance

Servicing

Other Considerations

Additional Information About This Loan

MORTGAGE BROKER NMLS/__ LICENSE ID LOAN OFFICER NMLS/__ LICENSE ID EMAIL PHONE

PAGE 3 OF 3 • LOAN ID #123456789LOAN ESTIMATE

Confirm ReceiptBy signing, you are only confirming that you have received this form. You do not have to accept this loan because you have signed or received this form.

Applicant Signature Date Co-Applicant Signature Date


TRID

V. Revising the Loan Estimate:

A. Tolerance Reset Loan Estimate Re-Disclosure:

A revised Loan Estimate (for comparison/tolerance purposes) may only be provided in connection with a valid changed circumstance. [§1026.19(e)(3)(iv) and Commentary to §1026.19(e)(3)(iv)]

B. Information Only Loan Estimate Re-disclosure:

A lender may issue a revised Loan Estimate Disclosure …for informational purposes, e.g., to keep the consumer apprised of updated information, even if the revised disclosures may not be used for purposes of determining good faith… For example a lender could issue …revised disclosures even though the sum of all costs subject to the 10 percent tolerance category has not increased by more than 10 percent. However, the revised disclosure cannot be used to determine either the 0% or 10% tolerances. [Commentary to §1026.19(e)(3)(iv) #4]

C. Revised Loan Estimates and the “Good Faith” Requirement:

Any revised disclosure (to reset tolerances and/or for informational purposes) issued …must be based on the best information reasonably available to the creditor at the time they are provided to the consumer… For example, if the creditor issues revised disclosures reflecting a new rate lock extension fee… other charges unrelated to the rate lock extension must be reflected on the revised disclosures based on the best information reasonably available to the creditor at the time the revised disclosures are provided. Nonetheless, any increases in those other charges unrelated to the rate lock extension (the legitimate changed circumstance) may not be used… to determine either the 0% or 10% tolerances. [Commentary to §1026.19(e)(3)(iv) #5]

D. Intent to Proceed Date:

Once the consumer indicates an intent to proceed within the time specified by the creditor… the date and time at which estimated closing costs expire are left blank on any subsequent revised disclosures. [Commentary to §1026.37(a)(13) #4]


TRID

VI. Closing Disclosure: [§1026.19(f)]

A. Requirements:

1. General Information: [§1026.38(a)]

a. Closing Information:

i. Disbursement Date:

The date funds (some or all) are to be disbursed. [§1026.38(a)(3)(iii) and Commentary to §1026.38(a)(3)(iii) #1]

Projected Payments





$761.78

NO



Balloon Payment NO

Costs at Closing

CLOSING DISCLOSURE PAGE 1 OF 5 • LOAN ID # 123456789



Mortgage Insurance


$761.78

+ 82.35

+ 206.13

$761.78

+ —

+ 206.13

Estimated Total Monthly Payment $1,050.26 $967.91

Estimated Taxes, Insurance & AssessmentsAmount can increase over timeSee page 4 for details

$356.13a month

See Escrow Account on page 4 for details. You must pay for other property costs separately.

This estimate includes In escrow?x Property Taxes YESx Homeowner’s Insurance YESx Other: Homeowner’s Association Dues NO

Closing Costs $9,712.10 Includes $4,694.05 in Loan Costs + $5,018.05 in Other Costs – $0 in Lender Credits. See page 2 for details.

Cash to Close $14,147.26 Includes Closing Costs. See Calculating Cash to Close on page 3 for details.

Transaction InformationBorrower Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST 12345Seller Steve Cole and Amy Doe 321 Somewhere Drive Anytown, ST 12345 Lender Ficus Bank

Loan InformationLoan Term 30 yearsPurpose PurchaseProduct Fixed Rate Loan Type x Conventional FHA

VA _____________Loan ID # 123456789MIC # 000654321

Closing InformationDate Issued 4/15/2013Closing Date 4/15/2013Disbursement Date 4/15/2013Settlement Agent Epsilon Title Co.File # 12-3456Property 456 Somewhere Ave Anytown, ST 12345 Sale Price $180,000

This form is a statement of final loan terms and closing costs. Compare this document with your Loan Estimate.Closing Disclosure

Projected Payments





$761.78

NO



Balloon Payment NO

Costs at Closing




Mortgage Insurance


$761.78

+ 82.35

+ 206.13

$761.78

+ —

+ 206.13


Estimated Taxes, Insurance & AssessmentsAmount can increase over timeSee page 4 for details

$356.13a month

See Escrow Account on page 4 for details. You must pay for other property costs separately.

This estimate includes In escrow?x Property Taxes YESx Homeowner’s Insurance YESx Other: Homeowner’s Association Dues NO



Transaction InformationBorrower Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST 12345Seller Steve Cole and Amy Doe 321 Somewhere Drive Anytown, ST 12345 Lender Ficus Bank

Loan InformationLoan Term 30 yearsPurpose PurchaseProduct Fixed Rate Loan Type x Conventional FHA

VA _____________Loan ID # 123456789MIC # 000654321

Closing InformationDate Issued 4/15/2013Closing Date 4/15/2013Disbursement Date 4/15/2013Settlement Agent Epsilon Title Co.File # 12-3456Property 456 Somewhere Ave Anytown, ST 12345 Sale Price $180,000



TRID

ii. Appraised or Estimated Property Value (No Seller):

The price or value relied upon and directly related to the property(s) that will secure the loan.

A.) Appraised Property Value:

If an appraisal was relied upon, disclose the “Appraised Prop. Value”. [§1026.38(a)(3)(vii)(B)]

B.) Estimated Property Value:

If no appraisal, disclose the “Estimated Prop. Value”. The creditor may use the estimate provided by the consumer at application but, if it has performed its own estimate of the property value for purposes of approving the credit transaction by the time the disclosure is provided to the consumer, the creditor must disclose the estimate it used for purposes of approving the credit transaction. [Commentary to §1026.38(a)(3)(vii) #1]

C.) Construction / Improvement (No Seller):

For transactions involving construction where there is no seller, the creditor must disclose the value of the property that is used to determine the approval of the credit transaction, including improvements to be made on the property if those improvements are used in determining the approval of the credit transaction. [Commentary to §1026.38(a)(3)(viii) #1]

Projected Payments





$737.91

NO


Prepayment Penalty NO

Balloon Payment NO

Costs at Closing






Mortgage Insurance


$737.91

+ 82.35

+ 206.13

$737.91

+ —

+ 206.13


Estimated Taxes, Insurance & AssessmentsAmount can increase over timeSee details on page 4

$356.13a month

See page 4 for escrowed property costs. You must pay for other property costs separately.

This estimate includes In escrow?x Property Taxes YESx Homeowner’s Insurance YESx Other: HOA Dues NO

From x To Borrower

Transaction InformationBorrower Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST 12345Lender Ficus Bank

Loan InformationLoan Term 30 yearsPurpose RefinanceProduct Fixed Rate Loan Type x Conventional FHA

VA _____________Loan ID # 123456789MIC # 009874513

Closing InformationDate Issued 4/15/2013Closing Date 4/15/2013Disbursement Date 4/15/2013Settlement Agent Zeta TitleFile # 12-3456Property 123 Anywhere Street Anytown, ST 12345 Appraised Prop. Value $180,000



TRID

2. Closing Cost Details:

…columns stating whether the charge was borrower-paid at or before closing, seller-paid at or before closing, or paid by others… [§1026.38(f)]

Borrower-Paid Seller-Paid Paid by OthersAt Closing Before Closing At Closing Before Closing

A. Origination Charges $1,802.0001 0.25 % of Loan Amount (Points) $405.0002 Application Fee $300.0003 Underwriting Fee $1,097.0004 05 06 07 08 B. Services Borrower Did Not Shop For $236.5501 Appraisal Fee to John Smith Appraisers Inc. $405.0002 Credit Report Fee to Information Inc. $29.8003 Flood Determination Fee to Info Co. $20.0004 Flood Monitoring Fee to Info Co. $31.7505 Tax Monitoring Fee to Info Co. $75.0006 Tax Status Research Fee to Info Co. $80.0007 08 09 10 C. Services Borrower Did Shop For $2,655.5001 Pest Inspection Fee to Pests Co. $120.5002 Survey Fee to Surveys Co. $85.0003 Title – Insurance Binder to Epsilon Title Co. $650.0004 Title – Lender’s Title Insurance to Epsilon Title Co. $500.0005 Title – Settlement Agent Fee to Epsilon Title Co. $500.0006 Title – Title Search to Epsilon Title Co. $800.0007 08 D. TOTAL LOAN COSTS (Borrower-Paid) $4,694.05Loan Costs Subtotals (A + B + C) $4,664.25 $29.80

Loan Costs


J. TOTAL CLOSING COSTS (Borrower-Paid) $9,712.10Closing Costs Subtotals (D + I) $9,682.30 $29.80 $12,800.00 $750.00 $405.00Lender Credits


Other CostsE. Taxes and Other Government Fees $85.0001 Recording Fees Deed: $40.00 Mortgage: $45.00 $85.0002 Transfer Tax to Any State $950.00F. Prepaids $2,120.8001 Homeowner’s Insurance Premium ( 12 mo.) to Insurance Co. $1,209.9602 Mortgage Insurance Premium ( mo.)03 Prepaid Interest ( $17.44 per day from 4/15/13 to 5/1/13 ) $279.0404 Property Taxes ( 6 mo.) to Any County USA $631.8005 G. Initial Escrow Payment at Closing $412.2501 Homeowner’s Insurance $100.83 per month for 2 mo. $201.6602 Mortgage Insurance per month for mo.03 Property Taxes $105.30 per month for 2 mo. $210.6004 05 06 07 08 Aggregate Adjustment – 0.01H. Other $2,400.0001 HOA Capital Contribution to HOA Acre Inc. $500.0002 HOA Processing Fee to HOA Acre Inc. $150.0003 Home Inspection Fee to Engineers Inc. $750.00 $750.0004 Home Warranty Fee to XYZ Warranty Inc. $450.0005 Real Estate Commission to Alpha Real Estate Broker $5,700.0006 Real Estate Commission to Omega Real Estate Broker $5,700.0007 Title – Owner’s Title Insurance (optional) to Epsilon Title Co. $1,000.0008 I. TOTAL OTHER COSTS (Borrower-Paid) $5,018.05Other Costs Subtotals (E + F + G + H) $5,018.05


TRID

a. Other Costs:

Within the applicable columns itemize and subtotal (Borrower-Paid) the amounts to be paid by the borrower, seller or others at or before closing. [§1026.38(g)] The seller information may be omitted in transactions that do not involve a seller or for simultaneous subordinate financing when the first-lien Disclosure records the seller’s entire transaction. [§1026.38(t)(5)(vii)(A)]

i. Taxes and Other Government Fees:

Within the applicable columns itemize the amounts to be paid to State and local governments for taxes and other government fees. Subtotal… amounts that are designated borrower-paid at or before closing... [§1026.38(g)(1)]

A.) Recording Fees:

1.) Total:

Disclose total fees paid to State and local governments …on the first line …and in the applicable column… The total amount disclosed… also includes recording fees expected to be paid to State and local governments for recording any other instrument or document to preserve marketable title or to perfect the creditor’s security interest in the property. [Commentary to §1026.38(g)(1) #3 ii]

The list of separate documents that could be required to be recorded depending on State law requirements can include, but is not limited to, certificates of satisfaction or partial satisfaction, contracts, deeds transferring ownership of various types, leases, modification agreements, mortgages or deeds of trust, easements, assumption agreements, covenants, declarations, liens, judgments, and powers of attorney. …the creditor is permitted to provide a further listing (separate page) of recording fees, at its discretion, as information used locally in real estate settlements… [8/11/17 – Federal Register Page 37728]

2.) Itemization:

Separately itemize the recording fees for the deed and/or mortgage outside the borrower and seller-paid columns. [to §1026.38(g)(1)(i)(A)]

A.) Taxes and Other Government FeesPage 137

154



Loan Costs







Loan Costs






TRID

B.) Recording Fee vs. Transfer Tax:

Unlike transfer taxes, recording fees are not based on the sale price of the property or loan amount. For example, a fee for recording a subordination agreement that is $20, plus $3 for each page over three pages, is a recording fee, but a fee of $1,250 based on 0.5 percent of the loan amount is a transfer tax, and not a recording fee. [Commentary to §1026.37(g)(1) #1]

C.) Transfer Taxes:

The creditor may itemize the transfer taxes paid on as many lines as necessary… in order to disclose all of the transfer taxes paid as part of the transaction. The taxes should be allocated in the applicable columns as borrower-paid at or before closing, seller-paid at or before closing, or paid by others, as provided by State or local law, the terms of the legal obligation, or the real estate purchase contract. [Commentary to §1026.38(g)(1) #2] Include …the name of the government entity assessing the transfer tax. [§1026.38(g)(1)(ii)]

A.) Taxes and Other Government FeesPage 137

154



Loan Costs







Loan Costs






TRID

ii. Prepaids – Odd Days Interest:

On the third line, the amount of prepaid interest to be paid per day, the number of days for which prepaid interest will be collected, the interest rate, and the total dollar amount to be paid by the consumer at consummation for such interest, labeled “Prepaid Interest (___ per day for __ days @__ %)”. [§1026.37(g)(2)(iii)]

The prepaid interest amount is disclosed as a negative number if the calculation of prepaid interest results in a negative number. [Commentary to §1026.38(g)(2) #2] If interest is not collected for any period between closing and the date from which interest will be collected with the first monthly payment, then $0.00 is disclosed… [Commentary to §1026.38(g)(2) #3] Do not round the dollar amounts. [§1026.37(o)(4)(i)(A) and §1026.38(t)(4)]

B.) Prepaids

155

Application 1st Payment Due Date

Anything Due WithinThis Timeframe

Page 138-139



Loan Costs







Loan Costs






TRID

3. Calculating Cash to Close: [§1026.38(i)]

The amounts disclosed in the “Loan Estimate” column… are the amounts disclosed on the most recent Loan Estimate provided to the consumer... [Commentary to §1026.38(i) #5]

Any amount included within the “Final” column must be shown to two decimal places (excluding “$0”). The “Loan Estimate” column must match the amount from the Loan Estimate (rounded to the nearest whole dollar). [Commentary to §1026.38(i) #2] An increase or decrease when comparing the Loan Estimate amount to the Final amount is only recognized when it’s outside of the Loan Estimate rounding requirements (to the nearest whole dollar). For example, assume the following:

Loan Estimate = $12,500 Total Closing Costs

Closing Disclosure = $12500.35 Total Closing Costs

…even though the table would appear to show a $0.35 increase in total closing costs”, no statement of such increase is given… because …each statement of a change is based on the actual, non-rounded estimate that would have been disclosed on the Loan Estimate…if it had been shown to two decimal places [Commentary to §1026.38(i) #2]

a. With a Seller:


BORROWER’S TRANSACTION

K. Due from Borrower at Closing $189,762.3001 Sale Price of Property $180,000.0002 Sale Price of Any Personal Property Included in Sale03 Closing Costs Paid at Closing (J) $9,682.3004 Adjustments05 0607Adjustments for Items Paid by Seller in Advance08 City/Town Taxes to 09 County Taxes to10 Assessments to11 HOA Dues 4/15/13 to 4/30/13 $80.0012 131415

L. Paid Already by or on Behalf of Borrower at Closing $175,615.0401 Deposit $10,000.0002 Loan Amount $162,000.0003 Existing Loan(s) Assumed or Taken Subject to04 05 Seller Credit $2,500.00Other Credits06 Rebate from Epsilon Title Co. $750.0007 Adjustments0809 10 11 Adjustments for Items Unpaid by Seller12 City/Town Taxes 1/1/13 to 4/14/13 $365.0413 County Taxes to 14 Assessments to15 1617

CALCULATION

Total Due from Borrower at Closing (K) $189,762.30Total Paid Already by or on Behalf of Borrower at Closing (L) – $175,615.04

Cash to Close x From To Borrower $14,147.26

SELLER’S TRANSACTION

M. Due to Seller at Closing $180,080.0001 Sale Price of Property $180,000.0002 Sale Price of Any Personal Property Included in Sale03 04 05 06 07 08Adjustments for Items Paid by Seller in Advance09 City/Town Taxes to 10 County Taxes to11 Assessments to12 HOA Dues 4/15/13 to 4/30/13 $80.0013141516

N. Due from Seller at Closing $115,665.0401 Excess Deposit 02 Closing Costs Paid at Closing (J) $12,800.0003 Existing Loan(s) Assumed or Taken Subject to04 Payoff of First Mortgage Loan $100,000.0005 Payoff of Second Mortgage Loan06 07 08 Seller Credit $2,500.0009 10111213Adjustments for Items Unpaid by Seller14 City/Town Taxes 1/1/13 to 4/14/13 $365.0415 County Taxes to 16 Assessments to17 1819

CALCULATION

Total Due to Seller at Closing (M) $180,080.00Total Due from Seller at Closing (N) – $115,665.04

Cash From x To Seller $64,414.96

Summaries of Transactions


Loan Estimate Final Did this change?

Total Closing Costs (J) $8,054.00 $9,712.10 YES • See Total Loan Costs (D) and Total Other Costs (I)

Closing Costs Paid Before Closing $0 – $29.80 YES • You paid these Closing Costs before closing

Closing Costs Financed (Paid from your Loan Amount) $0 $0 NO

Down Payment/Funds from Borrower $18,000.00 $18,000.00 NO

Deposit – $10,000.00 – $10,000.00 NO

Funds for Borrower $0 $0 NO

Seller Credits $0 – $2,500.00 YES • See Seller Credits in Section L

Adjustments and Other Credits $0 – $1,035.04 YES • See details in Sections K and L

Cash to Close $16,054.00 $14,147.26

Use this table to see a summary of your transaction.

Use this table to see what has changed from your Loan Estimate.


TRID

i. Total Closing Costs:

A.) Loan Estimate Section J [§1026.38(i)(1)(i)]

B.) Final (Closing Disclosure Section J) [§1026.38(i)(1)(ii)]

C.) Did this change?

“YES” or “NO” disclosed more prominently than the Loan Estimate or Final information within this section. Do not indicate, “YES” for a change solely attributed to rounding. If “YES” include the following statements as applicable (with applicable prominence): [§1026.38(i)(1)(iii)]

1.) ANY Increase or Decrease (either/or as applicable):

“See Total Loan Costs (D) and Total Other Costs (I).”

2.) Increase (outside tolerance) + Credit:

a.) Section J Cure:

“Increase exceeds legal limits by $___. See Lender Credits on page 2 for credit of excess amount.” This statement is required in addition to the previous statement.

b.) Section K Cure (Principal Reduction):

“Increase exceeds legal limits by $___. See Principal Reduction in Section K”. This statement is required in addition to the previous statement. [§1026.38(i)(1)(iii)(A)(3) and Commentary to §1026.38(i)(1)(iii)(A) #3]





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

ii. Closing Costs Paid Before Closing:

Disclosed as a negative number (or $0).

A.) Loan Estimate

…is always shown as “$0”, because an estimate of such amount is not disclosed on the Loan Estimate. [Commentary to §1026.38(i)(2)(i) #1]

B.) Final (Closing Disclosure):

The Borrower Paid Loan Costs Subtotal amount from the Before Closing column as disclosed on Closing Disclosure Closing Costs Subtotals (D+I) (Section J). [§1026.38(i)(2)(ii)] Disclose as a negative number. [§1026.38(i)(2)(i)]


“YES” or “NO” disclosed more prominently than the Loan Estimate or Final information within this section. Do not indicate, “YES” for a change solely attributed to rounding. If “YES” include the following statement (with applicable prominence): [§1026.38(i)(2)(iii)]

“You paid these Closing Costs before closing.”





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

iii. Closing Costs Financed:


A.) Loan Estimate [§1026.38(i)(3)(i)]


…the actual amount of the closing costs that are to be paid out of loan proceeds… stated as a negative number. [§1026.38(i)(3)(ii)]

1.) General Rule:

Note Amount

− 3rd Party Payments (purchase price, construction costs, debt payoffs, etc., do not include loan closing costs)

= Positive Number, Disclose as a Negative Number (not to exceed Total Closing Costs under section J)

or

= $0 or Negative, Disclose $0

[§1026.37(i)(3)(ii), and Commentary to §1026.38(i)(3)]


Do not include the sales price within the total amount of payments to third parties. The total amount of payments to third parties only includes payments occurring in the simultaneous subordinate financing transaction other than payments toward the sale price. [Commentary to §1026.38(i)(3) #1.ii]



“You included the closing costs in the loan amount, which increased the loan amount.”





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

iv. Down Payment / Funds from Borrower:

Disclosed as a positive number (or $0).



1.) Purchase Transactions:

Purchase Price

− Loan Amount

= Positive Number or $0, Disclose

or

= Negative Number, Disclose $0

(i.e. purchase plus construction and purchase plus improvements loans, etc.)

[§1026.38(i)(4)(ii)(A)(1), Commentary to §1026.38(i)(4)(ii)(A) #1 and §1026.37(h)(1)(v)(B)]

2.) Non-Purchase and Simultaneous Subordinate Financing Transactions:

See the Funds for Borrower section calculation; disclose $0 within the Down Payment/Funds from Borrower section. [§1026.38(i)(4)(ii)(A)(2) §1026.38(i)(4)(ii)(B), Commentary to §1026.38(i)(4)(ii)(A) #2]



“You [increased or decreased] this payment. See details in Section K or Section L.”





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

v. Deposit (Earnest Money):




Earnest money or any other amount paid to the seller or held in trust via the purchase agreement disclosed as a negative number or $0 (Closing Disclosure Section L). [§1026.38(j)(2)(ii)]



“You [increased or decreased] this payment. See Deposit in Section L.”

D.) Additional Instructions:

Disclose “$0” in a transaction where no deposit is paid or in the case of a non-purchase transaction. [Commentary to §1026.38(i)(5) #1]





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

vi. Funds for Borrower:

…the amount to be disbursed to the consumer or a designee of the consumer at consummation, if any. [Commentary to §1026.38(i)(6)(ii) #1] Disclosed as a negative number (or $0).

A.) Loan Estimate [§1026.38(i)(6)]


Total Debt Payoffs (Summaries of Transactions section)*

−Loan Amount (less closing costs financed)

= Positive Number:

Disclose the positive in the Down Payment/Funds From Borrower section and $0 in this section.

or

= Negative Number:

Disclose the negative number in this section and $0 in the Down Payment/Funds From Borrower section.

or

= $0, Disclose $0 in both this section and the Down Payment/Funds from Borrower section.

[§1026.38(i)(6)(iv)]

*On the Simultaneous Subordinate Financing Loan Estimate – Do not include the sales price within the total debt payoffs. The total amount of payments to third parties only includes payments occurring in the simultaneous subordinate financing transaction other than payments toward the sale price. [Commentary to §1026.38(i)(3) #1.ii]


“YES” or “NO” disclosed more prominently than the Loan Estimate or Final information within this section. Do not indicate “YES” for a change solely attributed to rounding. If “YES” include the following statement (with applicable prominence): [§1026.38(i)(6)(iii)]

“This amount [increased or decreased].”





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

vii. Seller Credits:


A.) Loan Estimate [§1026.38(i)(7)]


The total amount of money that the seller will provide at the real estate closing as a lump sum… (Closing Disclosure Section L). Do not include specific lender credits as they are to be itemized within the Loan Costs or Other Costs sections of the Closing Disclosure. [§1026.38(j)(2)(v)]


“YES” or “NO” disclosed more prominently than the Loan Estimate or Final information within this section. Do not indicate, “YES” for a change solely attributed to rounding. If “YES” include one of the following statements, as applicable (with applicable prominence): [§1026.38(i)(7)(iii) and Commentary to §1026.38(i)(7)(iii)(A) #1]

1.) “See Seller Credits in Section L.”

2.) “See Seller-Paid column on page 2.”

3.) “See Seller-Paid column on page 2 and Seller Credits in Section L.”





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

viii. Adjustments and Other Credits:

Includes, gifts, proration of taxes, homeowner’s association dues, etc. Disclosed as a positive or negative number (or $0).



Personal Property – See §1026.38(i)(8)(ii) for specific details.

+ Adjustments (Closing Disclosure Section K)

+ Adjustments for Items Paid by the Seller in Advance (Closing Disclosure Section K)

– Other Credits (Closing Disclosure Section L) – Adjustments (Closing Disclosure Section L) – Adjustments for Items Unpaid by Seller (Closing Disclosure Section L) = Adjustments and Other Credits (Calculating Cash To Close) [§1026.38(i)(8)(ii)]



“See details in Sections K and L.”





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

ix. Cash to Close:

Disclosed as a positive or negative number. The totals and descriptions within this line must be disclosed more prominently than the other disclosures within the Calculating Cash to Close section.



The total sum of the Final amounts disclosed within this section. [§1026.38(i)(9)(ii)]





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

b. Without a Seller:

This table is an optional method of disclosing cash to close in a transaction that does not involve a seller or a simultaneous subordinate loan that does not involve the seller (i.e. the first lien loan records all of the seller’s transaction). If this table is disclosed it must correspond to the applicable Costs At Closing disclosure table (i.e. From / To Borrower). [Commentary to §1026.38(e) #1] The amounts disclosed… under… “Loan Estimate”… are the amounts disclosed on the most recent Loan Estimate provided to the consumer... [Commentary to §1026.38(e) #6]

i. Loan Amount:

A.) Loan Estimate [§1026.38(e)(1)(i)]


The final Loan Amount as disclosed on the Closing Disclosure. [§1026.38(e)(1)(ii)]


“YES” or “NO” disclosed more prominently than the Loan Estimate or Final information within this section. Do not indicate, “YES” for a change solely attributed to rounding. If “YES” include the following statement (with applicable prominence): [§1026.38(e)(1)(iii)]

“This amount [increased or decreased].”


TO AMOUNT

01 Rho Servicing to pay off existing loan $115,000.00

02

03

04

05

06

07

08

09

10

11

12

13

14

15

K. TOTAL PAYOFFS AND PAYMENTS $115,000.00

Payoffs and Payments Use this table to see a summary of your payoffs and payments to others from your loan amount.



Loan Amount $150,000.00 $150,000.00 NO

Total Closing Costs (J) – $5,099.00 – $5,757.57 YES • See Total Loan Costs (D) and Total Other Costs (I)

Closing Costs Paid Before Closing $0 $435.00 YES • You paid these Closing Costs before closing

Total Payoffs and Payments (K) – $120,000.00 – $115,000.00 YES • See Payoffs and Payments (K)

Cash to Close $24,901.00

From To Borrower

$29,677.43

From To Borrower Closing Costs Financed (Paid from your Loan Amount) $5,322.57


x x


TRID

ii. Total Closing Costs:

A.) Loan Estimate: Section J [§1026.38(e)(2)(i)]

B.) Final (Closing Disclosure Section J):

The Total Closing Costs disclosed on the Closing Disclosure (Section J). [§1026.38(e)(2)(ii)] Disclose as a negative number if section J is positive; disclose as a positive number if section J is negative. [§1026.38(e)(2)(ii)]


“YES” or “NO” disclosed more prominently than the Loan Estimate or Final information within this section. Do not indicate, “YES” for a change solely attributed to rounding. If “YES” include the following statements as applicable (with applicable prominence): [§1026.38(e)(2)(iii)]

1.) ANY Increase or Decrease (either/or as applicable):

“See Total Loan Costs (D) and Total Other Costs (I).”

2.) Increase (outside tolerance) + Credit:

a.) Section J Cure:

“Increase exceeds legal limits by $___. See Lender Credits on page 2 for credit of excess amount.” This statement is required in addition to the previous statement.

b.) Payoffs and Payments Cure (Principal Reduction):

“Increase exceeds legal limits by $___. See Deposit in Payoffs and Payments.” This statement is required in addition to the increase/decrease statement. [§1026.38(e)(2)(iii)(A)(3) and Commentary to §1026.38(e)(2)(iii)(A) #3]


TO AMOUNT


02

03

04

05

06

07

08

09

10

11

12

13

14

15





Loan Amount $150,000.00 $150,000.00 NO





From To Borrower

$29,677.43



x x


TRID

iii. Closing Costs Paid Before Closing:

A.) Loan Estimate:

Disclosed as “$0”, because an estimate of this amount is not disclosed on the Loan Estimate. [§1026.38(e)(3)(i)]


The “Borrower-Paid” Loan Costs Subtotal amount from the Before Closing” column as disclosed on the Closing Disclosure, Total Loan Costs” (Section D). Disclose as a positive number. [§1026.38(e)(3)(ii)]


1.) Yes/No:

“YES” or “NO” disclosed more prominently than the Loan Estimate or Final information within this section. Do not indicate, “YES” for a change solely attributed to rounding. If “YES” include the following statement (with applicable prominence): [§1026.38(e)(3)(iii)]

“You paid these Closing Costs before closing.”

2.) Equal Statement:

…the creditor gives a statement that the “Final” amount disclosed… is equal to the “Loan Estimate” amount disclosed… only if the “Final” amount is $0, because the “Loan Estimate” amount is always disclosed as $0… [Commentary to §1026.38(e)(3)(iii)(B) #1]


TO AMOUNT


02

03

04

05

06

07

08

09

10

11

12

13

14

15





Loan Amount $150,000.00 $150,000.00 NO





From To Borrower

$29,677.43



x x


TRID

iv. Total Payoffs and Payments:

A.) Examples include but are not limited to:

1.) Existing Liens

2.) Other Loans

3.) Credit Cards

B.) Loan Estimate [§1026.38(e)(4)(i)]

C.) Final (Closing Disclosure):

…the total amount of payoffs and payments made to third parties (see Payoffs and Payments Section)… to the extent known, disclosed as a negative number if …a positive number and disclosed as a positive number if…negative…. [§1026.38(e)(4)(ii)]

D.) Did this change?

“YES” or “NO” disclosed more prominently than the Loan Estimate or Final information within this section. Do not indicate “YES” for a change solely attributed to rounding. If “YES” include the following statement (with applicable prominence): [§1026.38(e)(4)(iii)]

“See Payoffs and Payments (K)”


TO AMOUNT


02

03

04

05

06

07

08

09

10

11

12

13

14

15





Loan Amount $150,000.00 $150,000.00 NO





From To Borrower

$29,677.43



x x


TRID

v. Cash to Close From/To Borrower:

A.) Loan Estimate [§1026.38(e)(5)(i)]]


…the amount due from or to the consumer, calculated by the sum of the loan amount, total closing costs, closing costs paid before closing, and total payoffs and payments [§1026.38(e)(5)(ii)]

C.) Closing Costs Financed:

…the sum of the amounts disclosed under…the Loan Amount and Total Payoffs and Payments …but only to the extent that the sum is greater than zero and less than or equal to the sum disclosed under… Total Closing Costs (Closing Disclosure section J) after subtracting out any amounts designated borrower-paid before closing. [§1026.38(e)(6)]


TO AMOUNT


02

03

04

05

06

07

08

09

10

11

12

13

14

15





Loan Amount $150,000.00 $150,000.00 NO





From To Borrower

$29,677.43



x x


TRID

4. Summaries of Transactions (Involving a Buyer and Seller):

The itemization of the borrower’s and seller’s transaction. [§1026.38(j) and §1026.38(k)] The “Payoffs and Payments” table (next section) may be utilized in lieu of the “Summaries of Transactions” table for transactions not involving a seller and for simultaneous subordinate financing when the seller’s entire transaction is recorded on the first-lien disclosure. [§1026.38(t)(5)(vii)(C)]

a. General Requirements:

i. Paid Outside Closing:

Any cost required to be disclosed within this section but “paid outside of closing” must be labeled “Paid Outside of Closing” or “P.O.C.” and indicate the name of the party making payment. [§1026.38(j)(4) and §1026.38(k)(4)] P.O.C. charges should not be included when calculating totals within this section. [Commentary to §1026.38(j)(4)(i) #2 & §1026.38(k)(4) #1]

ii. Addendum:

Additional pages may be attached to the Closing Disclosure to add lines, as necessary, to accommodate the complete listing of all items required to be shown on the Closing Disclosure… within this section… and for the purpose of including customary recitals and information used locally in real estate closings (for example, breakdown of payoff figures, a breakdown of the consumer’s total monthly mortgage payments, an accounting of debits received and check disbursements, a statement stating receipt of funds, applicable special stipulations between consumer and seller, and the date funds are transferred). A reference such as “See attached page for additional information” should be placed in the applicable section of the Closing Disclosure. [Commentary to §1026.38(j) #2]


TRID

iii. Principal Reduction – Closing Disclosure:

A.) General:

A principal reduction that occurs immediately or very soon after closing must be disclosed in the summaries of transactions table (Section K) on the standard Closing Disclosure… or in the payoffs and payments table on the alternative Closing Disclosure… Include the following, as applicable:

1.) Principal Reduction Amount

2.) The Phrase “Principal Reduction” (or something similar)

3.) The Name of the Payee (Payoffs and Payments Section Only)

4.) Paid Outside Closing or P.O.C. and the Name of the Party Making Payment (if applicable)

5.) Tolerance Cure Statement (if applicable):

…a statement that the principal reduction is being provided to offset charges that exceed the legal limits… [Commentary to §1026.38 #4]

Example:

…$500.00 Principal Reduction for exceeding legal limits P.O.C. Lender... [Commentary to §1026.38 #4.i]

B.) Additional Page – Insufficient Space:

If a creditor is required to disclose the name of the party making the payment or that the principal reduction is being provided to offset charges that exceed the legal limits, and there is insufficient space… the creditor may omit these elements from... the applicable sections of the Closing Disclosure. However, if the creditor omits these elements… the creditor must provide a complete principal reduction disclosure under an appropriate heading on an additional page… with a reference to the abbreviated principal reduction disclosure… [Commentary to §1026.38 #4] For example, …a creditor may disclose a statement such as “$500.00 Principal Reduction P.O.C.” …and a statement on an additional page such as “$500.00 Principal Reduction for exceeding legal limits P.O.C. Lender. See Section K on page 3.” [Commentary to §1026.38 #4.i]

C.) Principal Reduction Not Paid with Closing Funds:

A principal reduction is disclosed in the summaries of transactions table… and marked with the phrase “Paid Outside of Closing” or the abbreviation “P.O.C.”… or in the payoffs and payments table… (also P.O.C.) Do not include the amount within the summaries of transactions table, cash to close or payoffs and payments calculations/tables. [Commentary to §1026.38 #4.i)] For example, “$500.00 Principal Reduction for exceeding legal limits P.O.C. Lender”… [Commentary to §1026.38 #4.i]


TRID

D.) Principal Reduction Paid with Closing Funds:

A principal reduction is disclosed in the summaries of transactions table… or in the payoffs and payments table … The amount of a principal reduction that is paid with closing funds is included in the applicable calculations… For example, in a refinance transaction using the alternative tables…a creditor discloses a $1,000 principal reduction to reduce the cash provided to the consumer by providing in the payoffs and payments table… a statement such as “Principal Reduction to Consumer” under… ”TO” and $1,000.00” under… ”AMOUNT” and by including such amount in the total payoffs and payments amount… and in the cash to close… the creditor should not include... ”P.O.C” and the name of the party making the payment… because those…elements are not applicable… [Commentary to §1026.38 #4.ii]


TRID





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

b. Borrower’s Transaction: [§1026.38(j)]

i. Due from Borrower at Closing: [§1026.38(j)(1)]

A.) Sale Price of Property (Contract Price)

On the simultaneous subordinate financing Closing Disclosure, no contract sales price is disclosed… [Commentary to §1026.38(j)(1)(ii) #1] However, the …proceeds of the subordinate financing applied to the first-lien transaction may be included in the summaries of transactions table…under Adjustments in Section K [Commentary to §1026.38(j)(1)(v) #3]

B.) Sale Price of Any Personal Property Included in Sale

C.) Closing Costs Paid at Closing (from Closing Disclosure Section J)

D.) Payoffs to Existing Lien Holders/Other Debt [Commentary to §1026.38(j)(1)(v) #2]

E.) Construction Holdbacks [Commentary to §1026.38(j)(1)(v) #2]

F.) Outstanding or Past Due Taxes [Commentary to §1026.38(j)(1)(v) #2]

G.) Adjustments

H.) Adjustments for Items Paid by Seller in Advance





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

ii. Paid Already by or on Behalf of Borrower at Closing: [§1026.38(j)(2)]

A.) Deposit

B.) Loan Amount

C.) Existing Loan(s) Assumed or Taken Subject To

D.) Other Financing (i.e. subordinate financing):

…the principal amount of the second loan must be disclosed with a brief explanation on the first-lien Closing Disclosure…on the summaries of transactions table…either on line 04 under the subheading “L. Paid Already by or on Behalf of Borrower at Closing,” or under the subheading “Other Credits.” If the net proceeds of the subordinate financing are less than the principal amount of the subordinate financing, the net proceeds must also be listed, and may be listed on the same line as the principal amount of the subordinate financing on the first-lien Closing Disclosure. [Commentary to §1026.38(j)(2)(vi) #2]





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

E.) Seller Credit (General)

F.) Other Credits (General, Escrow Balance Transfer, etc.)

G.) Gift Funds:

A credit must be disclosed only for any money or other payments made at closing by third parties, including family members, not otherwise associated with the transaction, along with a description of the nature of the funds provided… Amounts provided in advance of the real estate closing to consumers by third parties, including family members, not otherwise associated with the transaction, are not required to be disclosed… [Commentary to §1026.38(j)(2)(vi) #5]

H.) Adjustments

I.) Adjustments for Items Unpaid by Seller





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

c. Seller’s Transaction: [§1026.38(k)]

This section does not apply in a transaction without a seller, with a purpose of “construction” or for simultaneous subordinate financing if the first-lien Closing Disclosure records the seller’s entire transaction.

i. Due to Seller at Closing: [§1026.38(k)(1)]

A.) Sale Price of Property (Contract Price)

B.) Sale Price of Any Personal Property Included in Sale

C.) Adjustments for Items Paid by Seller in Advance





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

ii. Due from Seller at Closing: [§1026.38(k)(2)]

A.) Excess Deposit

B.) Closing Costs Paid at Closing (from Closing Disclosure Section J)

C.) Existing Loan(s) Assumed or Taken Subject To

D.) Payoff of First Mortgage Loan

E.) Payoff of Second Mortgage Loan

F.) Seller Credit (General)

G.) Other Seller Obligations (i.e. Tax Lien, Judgment, etc.)

H.) Adjustments for Items Unpaid by Seller

I.) Seller Contributions Toward Simultaneous Subordinate Financing





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

iii. Calculation Totals: [§1026.38(j)(3) and [§1026.38(k)(3)]

Total the Borrower and Seller sections and determine “Cash From” or “Cash To…” for the buyer and seller, as applicable.





CALCULATION






CALCULATION










Deposit – $10,000.00 – $10,000.00 NO




Cash to Close $16,054.00 $14,147.26




TRID

5. Payoffs and Payments (No Seller):

The “Payoffs and Payments” table may be used in lieu of the “Summaries of Transactions” table for transactions not involving a seller or for simultaneous subordinate financing if the first-lien Closing Disclosure records the seller’s entire transaction. The table …itemizes the amounts of payments made at closing to other parties from the credit extended to the consumer or funds provided by the consumer in connection with the transaction, including designees of the consumer; the payees and a description of the purpose of such disbursements… and the total amount of such payments… [§1026.38(t)(5)(vii)(B)]


TO AMOUNT


02

03

04

05

06

07

08

09

10

11

12

13

14

15





Loan Amount $150,000.00 $150,000.00 NO





From To Borrower

$29,677.43



x x


TRID

a. Third Party Payments:

Some examples of amounts paid by third parties that may be disclosed as credits on the payoffs and payments table… include gift funds, grants, proceeds from interest-free, subordinate-lien assistance loans meeting the criteria under §1026.3(h)…and, on the Closing Disclosure for a simultaneous subordinate financing transaction, contributions from a seller for costs associated with the subordinate financing. [Commentary to §1026.38(t)(5)(vii)(B) #1]

b. Simultaneous Subordinate Financing – On the First Lien Closing Disclosure (Alternate Form):

On the Closing Disclosure for a first-lien transaction…, such as a refinance… that also has simultaneous subordinate financing, the proceeds of the subordinate financing are included in the payoffs and payments table… by disclosing, as a credit, the principal amount of the subordinate financing, and, if the net proceeds of the subordinate financing are less than the principal amount of the subordinate financing, the net proceeds. The creditor may list the principal amount and net proceeds of the subordinate financing on the same line. For example, the creditor may disclose the principal amount of the subordinate financing under the subheading “To” with a description of the payment, and the net proceeds of the subordinate financing under the subheading “Amount.” [Commentary to §1026.38(t)(5)(vii)(B) #2.i]

c. Simultaneous Subordinate Financing – On the Subordinate Lien Closing Disclosure:

i. Subordinate Financing Applied to the First Lien Loan:

On the Closing Disclosure for a simultaneous subordinate financing transaction… the proceeds of the subordinate financing applied to the first-lien transaction may be included in the payoffs and payments table… [Commentary to §1026.38(t)(5)(vii)(B) #2.ii]

ii. Seller Contributions Applied to the Subordinate Lien Loan:

The creditor must …disclose as a credit in the payoffs and payments table on the simultaneous subordinate financing Closing Disclosure, any contributions from the seller toward the simultaneous subordinate financing. For example, …the seller contributes $200.00 toward the closing costs of the simultaneous subordinate financing. The subordinate-lien creditor must disclose the $200.00 contribution as a credit on the simultaneous subordinate financing Closing Disclosure in the payoffs and payments table… [Commentary to §1026.38(t)(5)(vii)(B) #2.iii and Commentary to §1026.38(k)(2)(vii) #1]]


TRID

6. Additional Information About This Loan:

a. Escrow Account: [§1026.38(l)(7)]

AssumptionIf you sell or transfer this property to another person, your lender

will allow, under certain conditions, this person to assume this loan on the original terms.

will not allow assumption of this loan on the original terms.

Demand FeatureYour loan

has a demand feature, which permits your lender to require early repayment of the loan. You should review your note for details.

does not have a demand feature.

Late PaymentIf your payment is more than 15 days late, your lender will charge a late fee of 5% of the monthly principal and interest payment.

Negative Amortization (Increase in Loan Amount)Under your loan terms, you

are scheduled to make monthly payments that do not pay all of the interest due that month. As a result, your loan amount will increase (negatively amortize), and your loan amount will likely become larger than your original loan amount. Increases in your loan amount lower the equity you have in this property.

may have monthly payments that do not pay all of the interest due that month. If you do, your loan amount will increase (negatively amortize), and, as a result, your loan amount may become larger than your original loan amount. Increases in your loan amount lower the equity you have in this property.

do not have a negative amortization feature.

Partial PaymentsYour lender

may accept payments that are less than the full amount due (partial payments) and apply them to your loan.

may hold them in a separate account until you pay the rest of the payment, and then apply the full payment to your loan.

does not accept any partial payments.If this loan is sold, your new lender may have a different policy.

Security InterestYou are granting a security interest in 456 Somewhere Ave., Anytown, ST 12345

You may lose this property if you do not make your payments or satisfy other obligations for this loan.


Loan Disclosures

Escrow AccountFor now, your loan

will have an escrow account (also called an “impound” or “trust” account) to pay the property costs listed below. Without an escrow account, you would pay them directly, possibly in one or two large payments a year. Your lender may be liable for penalties and interest for failing to make a payment.

Escrow

Escrowed Property Costs over Year 1

$2,473.56 Estimated total amount over year 1 for your escrowed property costs:Homeowner’s InsuranceProperty Taxes

Non-Escrowed Property Costs over Year 1

$1,800.00 Estimated total amount over year 1 for your non-escrowed property costs:Homeowner’s Association Dues

You may have other property costs.

Initial Escrow Payment

$412.25 A cushion for the escrow account you pay at closing. See Section G on page 2.

Monthly Escrow Payment

$206.13 The amount included in your total monthly payment.

No Escrow

Estimated Property Costs over Year 1

Estimated total amount over year 1. You must pay these costs directly, possibly in one or two large payments a year.

Escrow Waiver Fee

will not have an escrow account because you declined it your lender does not offer one. You must directly pay your property costs, such as taxes and homeowner’s insurance. Contact your lender to ask if your loan can have an escrow account.

In the future, Your property costs may change and, as a result, your escrow pay-ment may change. You may be able to cancel your escrow account, but if you do, you must pay your property costs directly. If you fail to pay your property taxes, your state or local government may (1) impose fines and penalties or (2) place a tax lien on this property. If you fail to pay any of your property costs, your lender may (1) add the amounts to your loan balance, (2) add an escrow account to your loan, or (3) require you to pay for property insurance that the lender buys on your behalf, which likely would cost more and provide fewer benefits than what you could buy on your own.


x

x

x

x

x


TRID

i. With an Escrow Account:

…if an escrow account (as defined under §1024.17) is or will be established, an itemization of the following… calculated under the §1024.17 requirements. [§1026.38(l)(7)(i)(A)]

A.) Escrowed Property Costs Over Year 1 (In Flows):

Disclose the total amount to be paid into the escrow account for property costs (including mortgage insurance) and include a description of each escrow charge. [§1026.38(l)(7)(i)(A)(1)]

The total amount calculation may be based on any of the following:

1.) One Year Following Consummation:

The first year following loan consummation. [§1026.38(l)(7)(i)(A)(1)]

2.) The RESPA Rule:

The escrow account analysis computation year, which is the 12-month period beginning with the borrower’s initial payment date. [§1026.38(l)(7)(i)(A)(5)]

3.) Less than 12 Payments:

…creditors may base such disclosures on less than 12 payments if, based on the payment schedule dictated by the legal obligation, fewer than 12 periodic payments will be made to the escrow account during the first year after consummation… [Commentary to §1026.38(l)(7)(i)(A)(5) #1]



















Loan Disclosures



Escrow










No Escrow



Escrow Waiver Fee




x

x

x

x

x


TRID

4.) Non-Escrowed Property Costs Over Year 1:

The estimated amount the consumer is likely to pay during the first year after consummation for the mortgage-related obligations (taxes, insurance, assessments, etc.)… that are known to the creditor and that will not be paid using escrow account funds… with a descriptive name of each such charge… [§1026.38(l)(7)(i)(A)(2)]

5.) Initial Escrow Payment (Initial Deposit) [§1026.38(l)(7)(i)(A)(3)]

6.) Monthly Escrow Payment (First Year):

The amount the consumer will be required to pay into an escrow account with each periodic payment during the first year after consummation… and the amount the consumer will be required to pay into an escrow account to pay some or all of the mortgage insurance premiums… [Commentary to §1026.38(l)(7)(i)(A)(4) #1]

7.) Additional Page for Descriptions:

Additional pages may be attached to the Closing Disclosure to add lines, as necessary, to accommodate the complete listing of all items required to be shown… A reference such as “See attached page for additional information” must be placed in the applicable section… if an additional page is used to list all items required to be shown. [Commentary to §1026.38(l)(7) #2]



















Loan Disclosures



Escrow










No Escrow



Escrow Waiver Fee




x

x

x

x

x


TRID

ii. Without an Escrow Account:

…if an escrow account will not be established, an itemization of the following: [§1026.38(l)(7)(i)(B)]

A.) Estimated Property Costs Over Year 1:

The estimated total amount the consumer will pay directly for the mortgage-related obligations (taxes, insurance, assessments, etc.)… during the first year after consummation that are known to the creditor… [§1026.38(l)(7)(i)(B)(1)] The total amount may be based …on a 12-month period beginning with the borrower’s initial payment date or on a 12-month period beginning with consummation. [Commentary to §1026.38(l)(7)(i)(B)(1) #2]

B.) Escrow Waiver Fee



















Loan Disclosures



Escrow










No Escrow



Escrow Waiver Fee




x

x

x

x

x


TRID

b. Loan Calculations:

i. Disclosed Calculations:

Each of the following must be disclosed: [§1026.38(o) and §1026.38(q)]

A.) Total of Payments:

B.) Finance Charge

C.) Amount Financed

D.) Annual Percentage Rate (APR)

E.) Total Interest Percentage (TIP)

F.) Questions Box

Contact Information

Confirm Receipt

Other Disclosures

AppraisalIf the property was appraised for your loan, your lender is required to give you a copy at no additional cost at least 3 days before closing. If you have not yet received it, please contact your lender at the information listed below.

Contract DetailsSee your note and security instrument for information about

• what happens if you fail to make your payments, • what is a default on the loan,• situations in which your lender can require early repayment of the

loan, and • the rules for making payments before they are due.

Liability after ForeclosureIf your lender forecloses on this property and the foreclosure does notcover the amount of unpaid balance on this loan,

state law may protect you from liability for the unpaid balance. If you refinance or take on any additional debt on this property, you may lose this protection and have to pay any debt remaining even after foreclosure. You may want to consult a lawyer for more information.

state law does not protect you from liability for the unpaid balance.

RefinanceRefinancing this loan will depend on your future financial situation, the property value, and market conditions. You may not be able to refinance this loan.

Tax DeductionsIf you borrow more than this property is worth, the interest on the loan amount above this property’s fair market value is not deductible from your federal income taxes. You should consult a tax advisor for more information.

By signing, you are only confirming that you have received this form. You do not have to accept this loan because you have signed or received this form.

Applicant Signature Date Co-Applicant Signature Date


Total of Payments. Total you will have paid after you make all payments of principal, interest, mortgage insurance, and loan costs, as scheduled. $285,803.36

Finance Charge. The dollar amount the loan will cost you. $118,830.27

Amount Financed. The loan amount available after paying your upfront finance charge. $162,000.00

Annual Percentage Rate (APR). Your costs over the loan term expressed as a rate. This is not your interest rate. 4.174%

Total Interest Percentage (TIP). The total amount of interest that you will pay over the loan term as a percentage of your loan amount. 69.46%

Loan Calculations

x

Lender Mortgage Broker Real Estate Broker (B)

Real Estate Broker (S)

Settlement Agent

Name Ficus Bank FRIENDLY MORTGAGE BROKER INC.

Omega Real Estate Broker Inc.

Alpha Real Estate Broker Co.

Epsilon Title Co.

Address 4321 Random Blvd.Somecity, ST 12340

1234 Terrapin Dr.Somecity, MD 54321

789 Local LaneSometown, ST 12345 45

987 Suburb Ct.Someplace, ST 12340

123 Commerce Pl.Somecity, ST 12344

NMLS ID 222222

ST License ID Z765416 Z61456 Z61616

Contact Joe Smith JIM TAYLOR Samuel Green Joseph Cain Sarah Arnold

Contact NMLS ID 12345 394784

Contact ST License ID

P16415 P51461 PT1234

Email [email protected]

JTAYLOR@ FRNDLYMTGBRKR.CM

[email protected] [email protected] sarah@ epsilontitle.com

Phone 123-456-7890 333-444-5555 123-555-1717 321-555-7171 987-555-4321

Questions? If you have questions about the loan terms or costs on this form, use the contact information below. To get more information or make a complaint, contact the Consumer Financial Protection Bureau at www.consumerfinance.gov/mortgage-closing?


TRID

ii. Calculating Total Payments:

The total of payments is the total… the consumer will have paid after making all payments of principal, interest, mortgage insurance, and loan costs, as scheduled, through the end of the loan term. [Commentary to §1026.38(o)(1) #1]

A.) Exclude Payments Not Made by the Consumer

A seller or other party, such as the creditor, may agree to offset payments of principal, interest, mortgage insurance, or loan costs, whether in whole or in part, through a specific credit, for example through a specific seller or lender credit. Because these amounts are not paid by the consumer, they are excluded from the total of payments calculation. [Commentary to §1026.38(o)(1) #1]

B.) Do Not Exclude Non-Specific Credits:

Non-specific credits, however, are… payments to the consumer that do not pay for a particular fee and therefore do not offset amounts for purposes of the total of payments calculation... [Commentary to §1026.38(o)(1) #1]

iii. Accuracy:

The disclosed total of payments… disclosed finance charge and other disclosures affected by the disclosed finance charge (including the amount financed and the annual percentage rate)… shall be treated as accurate if the amount disclosed… is understated by no more than $100… or is greater than the amount required to be disclosed. [§1026.38(o)(1) and §1026.38(o)(2)]


TRID

VII. Construction, Multiple Advance and Two-Phase Loans:

A. Construction Loan Applications:

The construction loan requirements below each rely on the TRID definition of an application (6 pieces of information) for disclosure timing purposes.

1. Construction Only – No Permanent Financing:

The construction only Loan Estimate must be provided within three days of receiving the construction only application. [Commentary to §1026.19(e)(1)(iii) #5]

Assume a creditor receives a consumer’s application for construction financing only on Monday, June 1. The creditor must deliver or place in the mail the disclosures… for only the construction financing no later than Thursday, June 4, the third business day after the creditor received the consumer’s application… [Commentary to §1026.19(e)(1)(iii) #5.i]

2. Construction to Permanent – Single Loan:

The combined construction to permanent Loan Estimate must be provided within three days of receiving the combined construction to permanent application. [Commentary to §1026.19(e)(1)(iii) #5]

Assume the creditor receives a consumer’s application for both construction and permanent financing on Monday, June 1. The creditor must deliver or place in the mail the disclosures… for both the construction and permanent financing, disclosed as either one transaction or separate transactions, no later than Thursday, June 4, the third business day after the creditor received the consumer’s application… [Commentary to §1026.19(e)(1)(iii) #5.ii]


TRID

3. Construction to Permanent – Multiple Loans:

…when disclosing a construction-permanent loan as two separate transactions, a creditor must provide a Loan Estimate for a particular phase within 3 business days of receiving an application for that phase (i.e., the creditor must provide the Loan Estimate for the construction phase within 3 business days of receiving the application for the construction phase and the Loan Estimate for the permanent phase within 3 business days of receiving the application for the permanent phase). If a creditor receives a single application for both phases but discloses them separately, it provides a Loan Estimate for the construction phase and a Loan Estimate for permanent phase within 3 business days of receipt of such application. [2017 TILA RESPA Executive Summary]

a. One Application:

The separate construction Loan Estimate and permanent Loan Estimates must be provided within three days of receiving the combined construction and permanent application. [Commentary to §1026.19(e)(1)(iii) #5]

Assume the creditor receives a consumer’s application for both construction and permanent financing on Monday, June 1. The creditor must deliver or place in the mail the disclosures… for both the construction and permanent financing, disclosed as either one transaction or separate transactions, no later than Thursday, June 4, the third business day after the creditor received the consumer’s application... [Commentary to §1026.19(e)(1)(iii) #5 (ii)]

b. Two Separate Applications:

i. Construction Phase:

The separate construction Loan Estimate must be provided within three days of receiving the separate construction-only application. [Commentary to §1026.19(e)(1)(iii) #5.iii]

ii. Permanent Phase:

The separate permanent Loan Estimate must be provided within three days of receiving the separate permanent-only application. [Commentary to §1026.19(e)(1)(iii) #5.iii]

iii. Example:

Assume the creditor receives a consumer’s application for construction financing only on Monday, June 1. Assume further that the creditor receives the consumer’s application for permanent financing on Monday, June 8. The creditor must deliver or place in the mail the disclosures required… for the construction financing no later than Thursday, June 4, the third business day after the creditor received the consumer’s application for the construction financing only, and not later than the seventh business day before consummation of the construction transaction. The creditor must deliver or place in the mail the disclosures required… for the permanent financing no later than Thursday, June 11, the third business day after the creditor received the consumer’s application for the permanent financing… [Commentary to §1026.19(e)(1)(iii) #5.iii]


TRID

B. Two Phase Financing Cost Allocation:

…to disclose credit extensions as multiple transactions, fees and charges must be allocated (to a particular phase) for purposes of calculating disclosures. [Commentary to §1026.17(c)(6) #5]

1. Phase Specific Allocation:

Finance charges and points and fees must be allocated to the phase to which they pertain. For example:

a. Construction to Permanent (Multiple Loans):

In the case of a construction-permanent loan that a creditor chooses to disclose as multiple transactions, the creditor must allocate to the construction transaction finance charges… and points and fees… that would not be imposed but for the construction financing. For example, inspection and handling fees for the staged disbursement of construction loan proceeds must be included in the disclosures for the construction phase and may not be included in the disclosures for the permanent phase.

b. Origination Charges:

If a creditor charges an origination fee for construction financing only but charges a greater origination fee for construction-permanent financing, the difference between the two fees must be allocated to the permanent phase. All other finance charges… and points and fees… must be allocated to the permanent financing.

2. Discretionary Allocation:

Fees that are not finance charges or points and fees may be allocated at the lender’s discretion. For example, a reasonable appraisal fee paid to an independent, third-party appraiser may be allocated in any manner the creditor chooses because it would be excluded from the finance charge… and excluded from points and fees…


TRID

C. Disclosing Multiple Advance Loans:

Creditors may use, at their option, the following methods to estimate and disclose the terms of multiple-advance construction loans… appendix D may also be used in multiple-advance transactions other than construction loans, when the amounts or timing of advances is unknown at consummation. [Commentary to TILA Appendix D #7]

1. For General Calculation Purposes:

a. Interest on Half of the Loan Amount:

Assume that one-half of the commitment amount is outstanding at the contract interest rate for the entire construction period. [TILA Appendix D Part I and Part II (A)(1)]; OR

b. Interest on the Entire Loan Amount:

Assume that the entire commitment amount is outstanding at the contract interest rate for the entire construction period. [TILA Appendix D Part I (B)(1) and Part II (A)(2)]

2. Construction to Permanent – Single Loan:

a. Loan Term:

If the construction and permanent financing are disclosed as a single transaction, the loan term disclosed is the total combined term of the construction period and the permanent period. For example, if the term of the construction financing is 12 months and the term of the permanent financing is 30 years, and the two phases are disclosed as a single transaction, the loan term disclosed is 31 years. [Commentary to TILA Appendix D #7.i]

b. Product – Interest-Only Feature Time Period:

If a single, combined disclosure is provided, the time period of the “Interest Only” feature… is the full term of the interest-only construction financing plus any interest-only period for the permanent financing. For example, the product disclosure for a single disclosure, fixed rate, construction-permanent loan with a 12-month interest-only construction phase where the interest rate is not subject to modification upon conversion to the permanent phase is “1 Year Interest Only, Fixed Rate.” If the first year of the permanent phase in this example also has a 12-month interest-only period, the product disclosure is “2 Year Interest Only, Fixed Rate.” [Commentary to TILA Appendix D #7.ii.B]


TRID

c. Interest Rate:

If the permanent financing has a fixed rate that will not be adjusted when the construction phase converts to the permanent phase, that fixed rate is used for disclosure purposes. If the permanent financing has a rate that may adjust when the construction phase converts to the permanent phase, the permanent financing has an adjustable rate. If the legal obligation for a loan secured by the consumer’s principal dwelling provides that the permanent financing interest rate may adjust when the construction financing converts to permanent financing, and such adjustment to the interest rate results in a corresponding adjustment to the payment, the creditor provides the… (“regular”, not initial) ARM rate change notice …but not… if the interest rate for the permanent phase will be fixed after the conversion. [Commentary to TILA Appendix D #7.iii]

d. Projected Payments Table:

If the creditor elects to disclose the construction and permanent phases as a single transaction, the repayment schedule must be disclosed pursuant to appendix D… Under appendix D… the projected payments table reflects the interest-only payments during the construction phase in a first column. The first column also reflects the amortizing payments, and mortgage insurance and escrow payments, if any, for the permanent phase if the term of the construction phase is not a full year. The following column(s) reflect the payments for the permanent phase. If interest is payable only on the amount actually advanced for the time it is outstanding, the creditor determines the amount of the interest-only payment to be made during the construction phase using the assumption in appendix D… [Commentary to TILA Appendix D #7.v.B]

…when the loan is disclosed as one transaction and only the terms of the legal obligation for the permanent phase require mortgage insurance or escrow, the way the creditor discloses the escrow and mortgage insurance depends on whether the first column of the projected payments table exclusively discloses the construction phase. If the first column of the projected payments table exclusively discloses the construction phase, the creditor discloses “0” in the first column of the projected payments table for mortgage insurance and a hyphen or dash in the first column of the projected payments table for escrow. If the first column discloses both the construction phase and the permanent phase payments, the amount of the mortgage insurance premium or escrow payment (if any) for the permanent phase is disclosed in the first column. [Commentary to TILA Appendix D #7.v.C]


TRID

3. Construction to Permanent – Two Phase Financing:

a. Product (Interest-Only):

If the construction financing is disclosed separately and has payments of interest only, the time period of the “Interest Only” feature… is the period during which interest-only payments are actually made and excludes any final balloon payment of principal and interest. For example, the product disclosure for a fixed rate, interest-only construction loan with a term of 12 months in which there will be 11 monthly interest payments and a final balloon payment of principal and interest is “11 mo. Interest Only, Fixed Rate.” [Commentary to TILA Appendix D #7.ii]

b. Interest Rate

If the permanent financing has an adjustable rate at consummation and separate disclosures are provided, the rate disclosed for the permanent financing is the fully-indexed rate… [Commentary to TILA Appendix D #7.iii]

c. Projected Payments Table:

…the creditor must disclose the periodic payments during the construction phase in a projected payments table… If interest is payable only on the amount actually advanced for the time it is outstanding, the creditor determines the amount of the interest-only payment to be made during the construction phase using the assumptions in appendix D… Also, because the construction phase is being disclosed as a separate transaction and its periodic payments do not repay the principal, the creditor must disclose the construction phase transaction as a product with a balloon payment feature [unless the transaction also has negative amortization, interest-only payments, or a step-payment feature – See §1026.37(a)(10)(iii)]… In addition, the creditor must provide the balloon payment disclosures (Loan Terms Section)… and disclose the balloon payment in the projected payments table. [Commentary to TILA Appendix D #7.v.A]

4. Permanent Phase Interest Rate Unknown:

If the interest rate for the permanent phase is not known at consummation for a construction-permanent loan using a single, combined construction-permanent disclosure or using separate disclosures for the permanent phase… disclose the loan product… as “Adjustable Rate.” If the interest rate may increase under the terms of the legal obligation from the disclosures provided at consummation, the loan product description is “Adjustable Rate” in such cases, even if the interest rate will be fixed for the term of the permanent phase once it is set. [Commentary to TILA Appendix D #7.ii.C]


TRID

5. Loan Term Payments and The Adjustable Payments Table:

a. Loan Term Section:

Disclose “Yes” to “Can this amount (Payments) increase after closing?”. Additionally, a …creditor that discloses “YES” as the answer to “Can this amount increase after closing?” may use months or years… For example, for a 10-month construction loan, the first… bullet may disclose, “Adjusts every mo. starting in mo. 1” and the second… bullet may disclose, “Can go as high as $[insert maximum possible periodic principal and interest payment] in year 1”. The calculation of the maximum possible periodic principal and interest payment disclosed is based on the maximum principal balance that could be outstanding during the construction phase…[Commentary to TILA Appendix D #7.iv.B]

b. Adjustable Payments Table:

The Adjustable Payments Table is required for any multiple advance loan. As part of the “First Change/Amount” disclosure in the “Adjustable Payment (AP) Table”… the creditor may omit and leave blank the amount or range corresponding to the first periodic principal and interest payment that may change. In such cases, the creditor must still disclose the timing of the first change, which is the number of the earliest possible payment (e.g., 1st payment) that may change under the terms of the legal obligation. [Commentary to TILA Appendix D #7.iv.B and C]







Late PaymentIf your payment is more than ___ days late, your lender will charge a late fee of ________________________________________________









Security InterestYou are granting a security interest in



Loan Disclosures



Escrow


Estimated total amount over year 1 for your escrowed property costs:


Estimated total amount over year 1 for your non-escrowed property costs:



A cushion for the escrow account you pay at closing. See Section G on page 2.


The amount included in your total monthly payment.

No Escrow



Escrow Waiver Fee




Adjustable Payment (AP) TableInterest Only Payments? Optional Payments?

Step Payments?

Seasonal Payments?

Monthly Principal and Interest Payments First Change/Amount Subsequent Changes Maximum Payment

Adjustable Interest Rate (AIR) TableIndex + MarginInitial Interest RateMinimum/Maximum Interest RateChange Frequency First Change Subsequent ChangesLimits on Interest Rate Changes First Change Subsequent Changes


TRID

6. Construction Costs (Not Fees/Charges):

Construction costs are the costs of improvements to be made to the property that the consumer contracts for in connection with the financing transaction and that will be paid in whole or in part with loan proceeds. [Commentary to TILA Appendix D #7.vi.A]

a. Loan Estimate:

On the Loan Estimate, a creditor factors construction costs into the funds for borrower calculation… [Commentary to TILA Appendix D #7.vi.B]

b. Closing Disclosure:

i. With a Seller:

Disclose the construction costs within the Summaries of Transactions, section K. [Commentary to TILA Appendix D #7.vi.C]

ii. Without a Seller:

Disclose the construction costs within the Payoffs and Payments table. [Commentary to TILA Appendix D #7.vi.C]

c. Construction Holdbacks (Undisbursed/Held in Reserve):

A creditor in some cases places a portion of a construction loan’s proceeds in a reserve or other account at consummation… The amount of such an account, at the creditor’s option, may be disclosed separately from other construction costs (within the sections noted above)… if space permits, or may be included in the amount disclosed for construction costs… If the creditor chooses to disclose separately the amount of loan proceeds placed in a reserve or other account at consummation, the creditor may disclose the amount as a separate itemized cost, along with an itemized cost for the balance of the construction costs… The amount may be labeled with any accurate term, so long as any label the creditor uses is in accordance with the “clear and conspicuous” standard… If the amount placed in an account is disclosed separately, the balance of construction costs disclosed excludes the amount placed in an account to avoid double counting. [Commentary to TILA Appendix D #7.vi.D]


TRID

7. Construction Loan Inspection and Handling Fees:

a. Collected At or Before Consummation:

If inspection and handling fees are collected at or before consummation, the total of such fees is disclosed in the loan costs table. [Commentary to §1026.37(f) #3]

b. Collected After Consummation:

If inspection and handling fees will be collected after consummation, the total of such fees is disclosed in a separate addendum and the fees are not counted for purposes of the calculating cash to close table. [Commentary to §1026.37(f) #3] The addendum is completed …by disclosing the total of such fees under the heading “Inspection and Handling Fees Collected After Closing”… [Commentary to §1026.37(f)(6) #3]

Construction loan inspection and handling fees are loan costs that must be included in the sum of the “In 5 Years”… and the “Total of Payments” disclosure… even when they are disclosed on an addendum. [Commentary to TILA Appendix D #7.vii]

c. Number of Disbursements Unknown:

If the number of inspections and disbursements is not known at the time the disclosures are provided, the creditor discloses the fees that will be collected based on the best information reasonably available to the creditor at the time the disclosure is provided. [Commentary to §1026.37(f) #3] For example, such information could include amounts the creditor has previously charged in similar construction transactions or the amount of estimated inspection and handling fees used by the creditor for purposes of setting the construction loan’s commitment amount. [Commentary to §1026.37(f)(6) #3]


TRID

VIII. Revising the Closing Disclosure: [§1026.19(f)(2)]

A. Inaccurate Closing Disclosure:

If a Closing Disclosure (already provided) becomes …inaccurate before consummation, the creditor shall (must) provide corrected disclosures reflecting any changed terms to the consumer… [§1026.19(f)(2)(i)]

B. Rate Lock Event – After Closing Disclosure Delivery:

If the interest rate is locked on or after the date on which the creditor provides the Closing Disclosure and the Closing Disclosure is inaccurate as a result, then the creditor must provide the consumer a corrected Closing Disclosure, at or before consummation, reflecting any changed terms… [Commentary to §1026.19(e)(3)(iv)(D) #2]

If the rate lock causes the Closing Disclosure to become inaccurate before consummation… (outside of the 1/4 or 1/8 tolerances, as applicable, or other change requiring a new waiting period) the creditor must ensure that the consumer receives (i.e. mailbox rule) a corrected Closing Disclosure no later than three business days before consummation… [Commentary to §1026.19(e)(3)(iv)(D) #2]

g. Changes After Closing DisclosurePage 96

Last Revised Loan Estimate

Closing Disclosure Revised Closing Disclosure

With Changes

“In Hand”No Later Than 4 Days Before Loan Closing

“In Hand”No Later Than 3 Days Before Loan Closing

“In Hand” At or Before* Loan

Closing

Revised Loan Estimates No Longer Allowed!


TRID

C. Review: [§1026.19(f)(2)(i)]

The borrower must be allowed to review the (revised) Closing Disclosure on the business day (general) before consummation. The Closing Disclosure should be completed based upon those items that are known to the creditor at that time.

D. Receipt: [§1026.19(f)(2)(i)]

If the Closing Disclosure becomes inaccurate prior to consummation a revised Closing Disclosure must be received by the borrower at or before consummation.

E. Three-Day Waiting Period: [§1026.19(f)(2)(ii)]

Any of the following changes will require a revised Closing Disclosure to be received by the borrower not less than three business days (precise) prior to consummation:

1. Loan Product Change (i.e., Fixed Rate vs. Adjustable Rate Product or 3/1 ARM vs. 5/1 ARM) [§1026.38(a)(5)(iii)]

2. Inaccurate APR: [§1026.22 & §1026.38(o)(4)]

a. Regular Transactions – More than 0.125% above or below disclosed APR.

b. Irregular Transactions – More than 0.25% above or below the disclosed APR:

i. Multiple Advance (construction loans).

ii. Irregular Payment Schedules (to accommodate seasonal incomes).

iii. Irregular Payment Amounts.

3. Prepayment Penalty Added [§1026.37(b)(4) & §1026.38(b)]


TRID

F. Post-Consummation Revisions: [§1026.19(f)(2)(iii)]

A revised Closing Disclosure must be provided to the borrower in the event of a change that causes the Closing Disclosure to become inaccurate (amount actually paid by the borrower vs. amount disclosed).

1. Revision Timeframe:

Changes that occur within 30 days after consummation.

2. Revised Disclosure Timing:

…the creditor shall deliver or place in the mail corrected disclosures not later than 30 days after receiving information sufficient to establish that such event has occurred.

G. Non-Numeric Clerical Errors: [§1026.19(f)(2)(iv)]

Non-numeric clerical errors may be corrected by delivering or mailing a revised Closing Disclosure no later than 60 days after consummation. Clerical errors are those that do not affect any numerical disclosure (i.e. amount of any fee) or delivery of the Loan Estimate or Closing Disclosure (i.e., mailing address).

H. Resetting Tolerance (i.e. Valid Changed Circumstance):

Creditors may provide consumers with a revised Closing Disclosure reflecting any charges resulting from a valid changed circumstance and rely on those figures (rather than the amounts disclosed on the Loan Estimate) for purposes of determining “good faith” and the applicable tolerance. [Commentary to §1026.19(e)(4)(ii) #1]

I. Per Diem Interest Changes Post Consummation:

A creditor is not required to provide corrected disclosures… if the only changes that would be required to be disclosed in the corrected disclosure are changes to per-diem interest and any disclosures affected by the change in per-diem interest, even if the amount of per-diem interest actually paid by the consumer differs from the amount disclosed… [Commentary to §1026.19(f)(2)(iii) #2]

Nonetheless, if a creditor is providing a corrected disclosure… for reasons other than changes in per-diem interest and the per-diem interest has changed as well, the creditor must disclose… the correct amount of the per-diem interest and provide corrected disclosures for any disclosures that are affected by the change in per-diem interest. [Commentary to §1026.19(f)(2)(iii) #2]


TRID

IX. “Good Faith Analysis” Tolerance Cures: If any charges at settlement exceed the permitted Loan Estimate/Closing Disclosure tolerances, the refund must be provided and revised disclosures must be delivered or mailed to the customer no later than 60 days after consummation. [§1026.19(f)(2)(v)]

A. Paid by Others Cure:

If identified prior to loan consummation, a tolerance error could be corrected by including the charge or portion of a charge in the Paid by Others column on page two of the Closing Disclosure. [§1026.38(f) and §1026.38(g)] A “legal limit” error statement must be included within the Cash to Close section on page three of the Closing Disclosure. [Commentary to §1026.38(e)(2)(iii)(A) #3]

B. General Lender Credit Tolerance Cure:

A tolerance error can be corrected by issuing a general lender credit in Section J on page two of the Closing Disclosure. A “legal limit” error statement must be included within both Section J on page two and within the Cash to Close section on page three of the Closing Disclosure. If a tolerance error is discovered after consummation, this method must be used and a corrected Closing Disclosure must be provided. [Commentary to §1026.38(h)(3) #2]



Loan Amount $150,000.00 $150,000.00 NO

Total Closing Costs (J)

– $5,099.00 – $5,977.57

YES • See Total Loan Costs (D) and Total Other Costs (I) • Increase exceeds legal limits by $200. See Lender Credits on page 2

for credit of excess amount.




From x To Borrower

$29,677.43

From x To Borrower Closing Costs Financed (Paid from your Loan Amount) $5,322.57


J. TOTAL CLOSING COSTS (Borrower-Paid) $5,977.57Closing Costs Subtotals (D + I) $5,822.57 $655.00Lender Credits (Includes $200 credit for increase in Closing Costs above legal limit) – $500.00


TRID

C. Section K (Principal Reduction) Tolerance Cure:

A tolerance error can be corrected by issuing a lender credit within section K on page three of the Closing Disclosure. [§1026.38(i)(1)(iii)(A)(3)] A “legal limit” error statement must be included within the Cash to Close section on page three of the Closing Disclosure. [Commentary §1026.38(i)(1)(iii)(A) #3]

D. Payoffs and Payments (Principal Reduction) Tolerance Cure:

A tolerance error can be corrected by issuing a lender credit within the Payoffs and Payments section on page three of the Closing Disclosure. [§1026.38(e)(2)(iii)(A)(3)] A “legal limit” error statement must be included within he Cash to Close section on page three of the Closing Disclosure. [Commentary §1026.38(e)(2)(iii)(A) #3]


TRID

X. Seller’s Version:

A. Settlement Agent is Responsible:

B. Lender Must Get A Copy

C. Edited Consumer or Modified Seller’s Version:

…requires the settlement agent to provide the seller with… the Closing Disclosure …reflecting the actual terms of the seller’s transaction. The settlement agent complies with this provision by providing a copy of the Closing Disclosure provided to the consumer… (if it reflects the seller’s transaction or the modified seller’s version). [Commentary to §1026.19(f)(4)(i) #1] Permitted omissions from the seller’s copy regarding the borrower’s information are further detailed in §1026.38(t)(5)(v) and §1026.38(t)(5)(vi)

Leave the applicable disclosure blank concerning the… consumer on the form provided to the… seller …or Provide to the seller, or assist the settlement agent in providing to the seller, a modified version of the form… [Model H-25(I)]. [Commentary to §1026.38(t)(5)(v) #1] Sections M and N …a creditor may provide a separate form to the consumer. A creditor may also provide a separate form to the consumer (with only Sections M and N blank) in any… situation where the creditor in its discretion chooses to do so (or State law), such as based on the seller’s request. [Commentary to §1026.38(t)(5)(v) #2]]

D. Simultaneous Subordinate Financing:

In a purchase transaction with simultaneous subordinate financing, the settlement agent complies… by providing the seller with only the first-lien transaction disclosures… if the first-lien Closing Disclosure records the entirety of the seller’s transaction. If the first-lien Closing Disclosure does not record the entirety of the seller’s transaction, the settlement agent complies… by providing the seller with both the first-lien and simultaneous subordinate financing transaction disclosures… [Commentary to §1026.19(f)(4)(i) #2]


CLOSING DISCLOSURE PAGE 1 OF 2

Transaction InformationBorrower Seller

Closing InformationDate Issued Closing Date Disbursement Date Settlement Agent File # Property Sale Price

Closing Disclosure

SELLER’S TRANSACTIONDue to Seller at Closing 01 Sale Price of Property 02 Sale Price of Any Personal Property Included in Sale03 04 05 06 07 08Adjustments for Items Paid by Seller in Advance09 City/Town Taxes to 10 County Taxes to11 Assessments to12 13141516

Due from Seller at Closing 01 Excess Deposit02 Closing Costs Paid at Closing (J) 03 Existing Loan(s) Assumed or Taken Subject to04 Payoff of First Mortgage Loan 05 Payoff of Second Mortgage Loan06 07 08 Seller Credit 09 10111213Adjustments for Items Unpaid by Seller14 City/Town Taxes to 15 County Taxes to 16 Assessments to17 1819

CALCULATION

Total Due to Seller at Closing Total Due from Seller at Closing

Cash From To Seller

Summaries of Transactions Contact InformationREAL ESTATE BROKER (B)

Name

Address

__ License ID

Contact

Contact __ License ID

Email

Phone

REAL ESTATE BROKER (S)

Name

Address

__ License ID

Contact


Email

Phone

SETTLEMENT AGENT

Name

Address

__ License ID

Contact


Email

Phone

Questions? If you have questions about the loan terms or costs on this form, use the contact information above. To get more information or make a complaint, contact the Consumer Financial Protection Bureau at www.consumerfinance.gov/mortgage-closing?


Loan Costs

CLOSING DISCLOSURE PAGE 2 OF 2

Seller-PaidAt Closing Before Closing

A. Origination Charges 01 % of Loan Amount (Points)02 03 04 05 06 07 08 B. Services Borrower Did Not Shop For 01 02 03 04 05 06 07 08 C. Services Borrower Did Shop For 01 02 03 04 05 06 07 08

J. TOTAL CLOSING COSTS


E. Taxes and Other Government Fees 01 Recording Fees Deed: $120.00 Mortgage: $32.0002 F. Prepaids 01 Homeowner’s Insurance Premium ( 12 mo.) 02 Mortgage Insurance Premium ( mo.)03 Prepaid Interest ( $26.31 per day from 3/23/12 to 3/31/12))04 Property Taxes ( mo.)05 G. Initial Escrow Payment at Closing 01 Homeowner’s Insurance per month for mo.02 Mortgage Insurance per month for mo.03 Property Taxes per month for mo.04 05 06 07 08 Aggregate AdjustmentH. Other01 02 03 04 05 06 07 080910111213

Other Costs


TRID

XI. Integrated Mortgage Disclosure Tools & Resources:

A. Banker's Compliance Consulting:

https://store.bankerscompliance.com/#/product/7beb48b7-6e90-43a5-acf0-5d4304c5335b?keyword=

1. Integrated Disclosures Compliance Timeline

2. Real Estate Matrix

3. Loan Estimate and Closing Disclosure Rounding Cheat Sheet

4. Escrow Analysis Worksheet Draft:

B. Consumer Compliance Outlook Live Webinars (Guidance and Q&A):

http://www.philadelphiafed.org/bank-resources/publications/consumer-compliance-outlook/outlook-live/

C. Consumer Financial Protection Bureau Implementation Tools (Final Rule, Summaries, etc.):

http://www.consumerfinance.gov/regulatory-implementation/tila-respa/

D. American Land Title Association (3-Day Delivery Flowchart):

http://altaonline.typepad.com/.a/6a0192ac343706970d01a511f09ef2970c-pi


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www.bankerscompliance.com

800-847-1653


REAL ESTATE LOAN MATRIX

Phone: 800-847-1653 Effective 10/3/15 Version 10.1 E-mail: [email protected]: www.bankerscompliance.com

Use of Security

Rental HomeBare Land

Primary Residence, Secondary or Rental

X, * or ** = See Back

(For Loan Applications Taken On or After 10/3/15)

APPLICABLE REGULATIONS(1) (2) (3) (4) (5) (6) (7) (8)

HMDAFlood

Insurance

ECOA Appraisal

(1st Lien Only)

CHARACTERISTICS OF LOAN REQUESTType of Security Use of Loan Proceeds

(9) (10)

Written Application

ECOA / Fair Housing

RESPA Counseling

List

Early TILA

Ability To Repay / TILA

Disclosure

R of R / HCM

HPML

XRefinance X X X X* X X X* X

X* X ** X* X XPurchase X X XX X

XX

X XHome Equity (Closed End) X X* X XHome Improvement X X* X X X* X

X* * X XHome Equity Line of Credit (Open End) X ** XX

X XHome Equity - Business Purpose

XPurchase, Refinance or Home Improvement* X X

Business or Agricultural Purpose

X X X *

*

Home Equity - Consumer Purpose

X

X XSecondary or

Other ResidencePurchase, Refinance or Home Improvement X X

Rental House

X XHome Equity X X XX X X X

Bare Land Primary Residence

Construct Home or Mobile Home + Land X X* X**

1-4 Family Residential Dwelling or Mobile Home

Primary Residence

Buy Land Only - Will Not Build With Same Proceeds

X* X*

Consumer Purpose X

XBuy Mobile Home or Construct Home on Land Already Owned

X X* X* X* X* X* X* **

X* X* X* X* ** X

X X

X*Construct Home or Mobile Home ** X X

XXResidence OVER 4 Units Purchase, Refinance or Home Improvement

X* XBusiness or Farm (No House)

Business or Farm (With Building)

Personal Use XXBusiness or Agricultural Purpose

Secondary Residence Purchase, Refinance or Home ImprovementBusiness or Agricultural Purpose

Home Equity

X XRefinance X X * X** X X*

* X** ** X* XX X X

Purchase X X

X* X X XHome Equity * X**

* X** X

* X XX X* * X

Home Improvement

XX** * X

X

X** X X X

TIMETABLEAT APPLICATION 3 BUSINESS DAYS AFTER RECEIVING

APPLICATION BEFORE CLOSING AT LOAN CLOSING4th BUSINESS DAY

AFTER LOAN IS CLOSED

Mobile Home (No Land Taken As

Collateral)

Primary Residence

Home Equity - Business PurposeX X X * X X

Rental Home Purchase, Refinance or Home Improvement

Written Application (1) RESPA Homeownership Counseling List (3) Abilty To Repay (5) Closing Disclosure/Final Truth in Lending Disclosure (5)

Advance Loan Proceeds (6)

Request Government Monitoring Information (2) (8) Home Loan Toolkit - Closed End Purchases/Construction Only (4)

Closing Disclosure (5) No Later Than 3 Business Days Prior to Closing

Right of Rescission Notice (6)

CHARM Booklet & ARM Program Disclosure (4*)

HCM Counseling Certification (6)

HPML Test (7)

Loan Estimate (4) HCM Test (6) HPML Escrow Account (7)

HELOC Booklet & HELOC Program Disclosure (4**) HPML (7) & ECOA (10) Appraisal Notice HCM Notice - 3 Business Days Prior to Closing (6)

HPML (7) & ECOA (10) Appraisals - No Later Than 3 Business Days Prior to Closing

Flood Determination / Flood Notice - Zones A & V Only - Approximately 10 Days Prior to Closing / Flood Insurance In Place (9)


RE Matrix 10.1 [email protected] Revised 12/31/15

REAL ESTATE MATRIX

1. A written application is required on loans secured by and made primarily for the purpose of purchasing or refinancing a 1-4 family principal residence.

2. Request and retain Government Monitoring Information (ethnicity, race, sex, age, marital status) on loans that are secured by and made primarily for the purpose of purchasing, refinancing, or constructing (if converted to permanent financing) the borrower’s 1-4 family principal residence (including a mobile home). National banks must request and retain 20 monitoring items (all of which are contained in the standard FHLMC/FNMA residential loan application form). *Do not collect Government Monitoring Information for construction only loans.

3. Provide the Homeownership Counseling List (including HELOCs) within 3 business days of receiving an application. Provide an Affiliated Business Arrangement Disclosure (including HELOCs), as applicable. Temporary financing (e.g. construction, bridge) is exempt. *Provide if there will be a land transfer or if you anticipate providing permanent financing at the time the construction application is taken.

4. Provide a Home Loan Toolkit (closed end purchases/construction only) within 3 business days (general) after receiving an application. Provide the Loan Estimate disclosure within 3 business days (general) after receiving an application and wait 7 business days (precise) to close the loan. *If the loan has a variable interest rate (and term greater than one year), provide a CHARM booklet and variable rate program disclosure with application. **If a Home Equity Line of Credit, provide a HELOC program disclosure and brochure with application.

5. Provide a Closing Disclosure if secured by land (if more than 50% of the loan proceeds are for business purposes, TIL does not apply). The Closing Disclosure must be “in hand” 3 business days (precise) prior to loan closing. If the APR becomes inaccurate; the loan product changes; or a prepayment penalty is added, a new waiting period is required. Refer to §1026.19(f)(2) for re-disclosure requirements. Document the borrower’s ability to repay (ATR) the mortgage loan. Lenders must make a good faith, reasonable determination, consider specific underwriting factors and use reasonably reliable third-party records to verify the information used to evaluate the factors. *The ATR requirements only apply to closed-end loans secured by a dwelling. Construction/bridge loans (or other temporary financing) of 12 months or less; HELOCs, and reverse mortgages are exempt. **Provide a Truth in Lending Disclosure. A Closing Disclosure is not required if the loan is not secured by land.

6. The right to rescind applies only when the applicant has an ownership interest in the dwelling being pledged as collateral. Purchase and construction loans are exempt unless secured by the borrower’s current dwelling (bridge loans). Renewals, refinances, and future advances are subject to rescission but only for the amount of the “new” money extended (closed-end loans). The renewal of a land sales contract is subject to the right of rescission. Advances cannot be extended until the 4th business day (precise) after the later of: (1) the right of rescission notice is provided, (2) the note is signed, and (3) all disclosures are provided. High Cost Mortgage rules apply if the APR exceeds the applicable Average Prime Offer Rate spread; the loan exceeds the applicable points and fees test or includes a prepayment penalty. *Bridge loans require the right to rescind. Construction loans are exempt from the HCM requirements **Purchase loans are also subject to the HCM testing and requirements (restrictions, notice and certified counseling).

7. Higher Priced Mortgage Loan rules apply if the APR ≥ the Average Prime Offer Rate by 1.5% (first lien) or 3.5% (subordinate lien). An appraisal disclosure is required within three business days (general) of application and a copy of the appraisal must be provided three business days (general) prior to closing (cannot be waived). A certified/licensed written appraisal (with interior inspection) is required. Non-exempt banks must escrow for HPMLs (5 year minimum). *HPML escrow rules do not apply to construction loans; bridge loans/other temporary financing with a term of 12 months or less; HELOCs, or reverse mortgages. HPML appraisal requirements do not apply to construction loans; bridge loans with a term of 12 months or less (if in connection with the purchase of a primary dwelling); Qualified Mortgages; streamlined 1st lien refinancings meeting certain conditions; smaller dollar loans; loans secured by mobile homes, boats, or trailers; or reverse mortgages. Loans secured by a new manufactured home and land do not require a physical interior visit. Loans secured by a manufactured home but not land may be exempt from the appraisal requirements if one of the following is provided three business days prior to closing: 1) Manufacturer’s Invoice (“New” homes only); 2) An independent cost estimate of the home; or 3) An independent valuation. Flipped transactions may require a second appraisal.

8. HMDA information must be compiled by banks who are (1) located in a Metropolitan Statistical Area (or have a branch in a MSA) and (2) have assets exceeding the minimum threshold. Banks shall collect data on home purchase, home improvement and refinancings. The regulation defines “home purchase loans” as a loan secured by and made for the purpose of purchasing a dwelling. A “home improvement loan” is unsecured or secured in which the proceeds are used to repair, rehabilitate or remodel the property. *If this loan is a “Refinancing”, it is reportable. A “Refinancing” is any new obligation that satisfies and replaces an existing obligation by the same borrower where both the existing obligation and the new obligation are secured by liens on a dwelling regardless of the purpose of the existing obligation. **Banks shall not report: (1) loans on unimproved land; (2) temporary financing (bridge or construction loans); (3) the purchase of an interest in a pool of loans; or (4) the purchase solely of the right to service loans.

9. The Flood Disaster Protection Act applies to any improved real estate loan or mobile home loan (regardless of where the mobile home will be located). Complete a Standard Flood Hazard Determination Form for each property before the loan is closed. If the improved real estate or mobile home securing the loan is located or is to be located in an area identified as having special flood hazards, a Flood Hazard Notice must be delivered to the customer within a “reasonable period of time” before closing (not less than 10 days) & must be signed. The requirements of this Act apply to increases, extensions, and renewals as well as commercial and agricultural loans secured by improved real estate.

10. For any first lien loan (consumer or commercial) secured by a 1-4 family dwelling, the bank must: (1) provide a Notice of Free Appraisal Copy to the primary applicant within 3 business days of receiving a covered application; and (2) provide a copy of the appraisal to the primary applicant (whether credit is granted or denied or the application is withdrawn) promptly, at least 3 business days prior to closing. The applicant may provide a waiver (generally must be provided at least three business days prior to closing), but a copy must still be provided at closing; if a loan will not be made a copy must be provided within 30 days after that determination.

Documents

TRID: July 2017 Final Rule Updates IBA Conference · 2017-11-13 · This publication contains the author’s opinion on the subject ... A lender is prohibited from charging any fee