1 TRID TILA/RESPA Integrated Disclosures. 2 Any residential loan originated after October 3, 2015...
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Transcript of 1 TRID TILA/RESPA Integrated Disclosures. 2 Any residential loan originated after October 3, 2015...
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TRIDTILA/RESPA Integrated Disclosures
Any residential loan originated after
October 3, 2015 will be subject to the new rules
and forms set forth by the CFPB.
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Replaces the GFE and Initial TIL
Must be received by the borrower or placed in the mail no later than the three (3) business day after receiving the borrower’s application (as defined by RESPA).
Loan Estimate (LE)
Replaces the Final TIL and HUD-1 Settlement Statement
Must be received by the borrower at least three business days prior to consummation.
Closing Disclosure (CD)
Combining New Forms
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Application Definition
The CFPB has revised the definition of application to remove the seventh “catch-all” element of the current definition under Regulation X, that is, “any other information deemed necessary by the loan originator.” Since 2010 our “catch-all” element was the credit report. We will now consider it an application as soon as the above information is received.
Six Pieces of information
BORROWER NAME
SSN
INCOMEPROPERTY ADDRESS
ESTIMATE OF PROPERTY VALUE
LOAN AMOUNT
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Delivery of the Loan Estimate
NMSI defines a “business day” as Monday through Saturdays, excluding Sundays, and federal holidays.
THE LE MUST BE PROVIDED TO THE BORROWER IN PERSON OR PLACED IN THE MAIL (EITHER USPS OR VIA EMAIL) WITHIN THREE (3) BUSINESS DAYS OF RECEIPT OF APPLICATION AND SEVEN (7) BUSINESS DAYS BEFORE CONSUMMATION.
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in person
overnight
usps
7 Days Waiting Period
The 7 days will be counted as such:
HOW TO COUNT THE 7 DAYS WAITING PERIOD.
If the LE is provided to the borrower in person, the 7 days begin that day
If LE was delivered priority overnight and the borrower signs receipt of delivery, the 7 days begin that day.
If the LE is delivered via email and the borrower acknowledges via e-signature, the 7 days begin that day.
If the LE is delivered via email or USPS mail and the borrower does not provide confirmation of receipt as listed above, the 7 days begin after 3 days have passed.
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Important Information for Submission
You should contact your settlement agent as soon as possible after having an application, to gather an estimate of fees to properly disclose the LE. You may have to take a new application if the LE is improperly disclosed.
FEE WORKSHEET
Make sure to check the box and fill in the date borrower (s) provided intent to proceed.
INTENT TO PROCEED
Settlement Agent E-mail is critical. This allows for the Closing Disclosure (CD) to be delivered timely and not jeopardizing the Closing Date.
SETTLEMENT AGENTCONTACT INFORMATION
Settlement Service Provider List is required, otherwise all fees that are required by the lender will be subject to 0% tolerance.
SETTLEMENT SERVICE PROVIDER LIST
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Fee Charge
01
Credit report (this is the only bona fide fee that can be charged to the borrower prior to the intent to proceed).
WHAT FEES CAN I CHARGE THE BORROWER?
02
The loan originator may not order and pay for an appraisal without the intent to proceed.
No post-dated checks, no credit card numbers on file.
WHAT FEES CANNOT I CHARGE THE BORROWER?
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General information• Address of creditor, date, address, rate lock, etc.
Loan Term Table• Loan amount, interest rate, monthly P&I
Project Payment Table• P&I, MI, estimated monthly payment
Cost at Closing Cost• Estimated Closing Costs
• Estimated Cash to Close (Not on Current GFE)
General Loan Information
Loan Estimate – Page One
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What’s Different
1. The 800, 900, etc. series of fees no longer exist.
2. Must be listed alphabetically with title fees preceded by “Title –”
3. Fees must be rounded to the nearest whole dollar amount (e.g. a $13.75 charge will be rounded to $14.00)
4. The credit for interest rate chosen will be shown as “Lender Credits” under “J. Total Closing Costs”
Closing Cost Details
Loan Estimate – Page Two
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Loan Costs
A. Origination Charges
• 0% tolerance items.
B. Services You Cannot Shop for
• 0% tolerance items.
C. Services You Can Shop for
• 10% tolerance items.
• Settlement Service Provider List is required, otherwise all fees that are required by the lender will be subject to 0% tolerance.
Closing Cost Details
Loan Estimate – Page Two
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Zero Tolerance• Fees paid to the creditor, mortgage broker, or affiliate of either,
Appraisal Fee, Credit Report, Transfer Taxes…
10% Cumulative Tolerance• Recording fees, Charges for third party services where the
charge is not paid to the Creditor/Lender or the Creditor/Lender’s affiliate..
• Settlement Service Provider List is required, otherwise all fees that are required by the lender will be subject to zero tolerance.
Variances permitted without tolerance• Prepaid interest, property insurance premiums, amounts placed
into escrow..
Tolerances
Loan Estimate – Page Two
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Loan Estimate – Page Two
Other CostsE. Taxes & Other Government Fees
F. Prepaids
G. Initial Escrow Payment
H. Other
Closing Cost Details
Calculating Cash to Close
Adjustable Payment (AP) Table• only prints if interest only or interest only ARM
Adjustable Interest Rate (AIR) Table• only prints if ARM or interest only ARM
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Loan Estimate – Page Three
Additional Information
Contact information
Comparisons Table• Total Interest Payment (TIP)
Replaces the Total Payments from the initial TIL
Loan Amount: $100,000Total Interest: $50,000TIP: 50%
Other considerations• Appraisal• Assumption• Late Payment• Servicing
Signature statement• Acknowledging receipt does not equal intent to proceed
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Important Notes
01
SINCE YOU ARE NOT SURE WHO THE LENDER MIGHT BE ON YOUR TRANSACTION, LEAVE THE LENDER NAME AND LOAN ID BLANK ON YOUR LE
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CONTACT YOUR SETTLEMENT AGENT AND ALL THIRD-PARTIES TO GET A DETAILED LIST OF THEIR FEES, AS SOON AS YOU HAVE AN APPLICATION
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READ THE PURCHASE CONTRACT, IF APPLICABLE, FOR ANY INSPECTIONS OR OTHER THIRD-PARTY FEES.
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DO NOT COLLECT ANY FEES, EXCEPT FOR CREDIT REPORT FEE, PRIOR TO THE INTENT TO PROCEED RECEIPT DATE.
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INPUT YOUR ORIGINATION FEE ON THE LE, EVEN IF YOU THINK YOU ARE DOING A LENDER-PAID TRANSACTION OR YOU CAN’T GO BPC. ONCE LOCKED LPC CAN NOT BE SWITCHED.0
6NMSI WILL HANDLE COCs AND THE CD FOR YOU. THE CD IS SENT AS EARLY AS POSSIBLE TO ENSURE YOU MEET YOUR CLOSE OF ESCROW.
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Change in Circumstance
• Inaccurate or changed information specific to consumer or transaction (similar to RESPA today)
• New information specific to the consumer or transaction
CHANGE AFFECTING SETTLEMENT CHARGES
• Consumer is ineligible because of changed circumstance such as creditworthiness or value of security.
CHANGE AFFECTING ELIGIBILITY
Valid change in circumstance
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Change in Circumstance - A revised Loan Estimate
A revised Loan Estimate must be delivered or placed in the mail to the Borrower no later than 3 business days after receiving a bona fide change circumstance.
A revised Loan Estimate cannot be issued on or after the date the Closing Disclosure is provided.
The revised Loan Estimate must be received by the Borrower no later than 4 business days prior to consummation.
Revised LE delivery & timing
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What is Closing vs. Consummation?
Consummation may be different than the closing date as defined in the purchase agreement where the buyer becomes contractually obligated to a seller on a real estate transaction. In most cases these two dates are not the same and clearly have very different meanings.
THE RULE INTRODUCED A NEW TERM INTO REAL ESTATE TRANSACTIONS. THE TERM IS CONSUMMATION AND IS DEFINED IN THE RULE AS THE DAY THE CONSUMER BECOMES LEGALLY OBLIGATED UNDER THE LOAN. THIS WILL GENERALLY BE THE DATE OF SIGNING A NOTE AND/OR NOTARY DATE.
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General information• Lender name, loan term, purpose, and loan type
Loan Term Table• Loan amount interest rate, and P & I payment
Project Payment Table• PITI payment
Cost at Closing Cost Table• Similar to boxes A and B on page 1 of the LE
General Loan Information
Closing Disclosure– Page One
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Closing Disclosure – Page Two
Closing Cost Details
Loan Costs• Origination and third party charges
Other Costs• Recording fees, and escrows
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Calculating Cash to Close• including Seller Credit
Summaries of Transactions• Purchases Only
Payoffs and Payments table • Refinances Only
Closing Cost Details
Closing Disclosure– Page Three
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• Loan Features
• Loan Disclosures
• Assumption Information
• Adjustable Payments for Interest Only or Interest
Only ARM loans
• Adjustable Interest Rate (AIR) tables for ARMs only
(including Interest Only ARM loans)
Additional Information About This Loan
Closing Disclosure– Page Four
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Closing Disclosure– Page Five
• Loan Calculations
• Other Disclosures
• Contact Information
• Confirm Receipt
Additional Information About This Loan
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Closing Disclosure
• Receipt is presumed immediately, signed disclosure required. Closing may occur 3 days later.
IN PERSON
• Receipt is presumed after 3 days. Closing may occur 3 days after receipt. (6 days total)
US MAIL
• Receipt is presumed after 3 days. Closing may occur 3 days after presumed receipt or 3 days after proof of actual receipt.
• Closing could be as soon as 3 days if received same day or 6 days if presumed receipt.
ELECTRONICALLY
Borrower must RECEIVE Closing Disclosure 3 days prior to closing.
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Closing Disclosure Delivery Time Table
Closing Disclosure Timeline
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Closing Disclosure
NMSI will send out CD if followings are met and DO NOT require to be “Clear to Doc” status.
BORROWER MUST RECEIVE CLOSING DISCLOSURE 3 DAYS PRIOR TO CLOSING.
NMSI WILL PREPARE AND
DELIVER THE CLOSING DISCLOSURE
“COLLABORATION” process will occur electronically via Doc Magic.
The Loan is LOCKED
Appraisal is CLEARED
Settlement Fee & Information are FINALIZED
Taxes are FINALIZED
Insurance (MI&HOI) are FINALIZED
Real Estate Agent Information
“ If the CD is delivered electronically via a DocMagic and the borrower does not access the CD,
then it’s not considered as received.”
waiting
Re-Disclosure
period
If the CD is re-disclosed for the following reasons, a 3-business-day waiting period applies:• APR increases by more than 0.125%
• Loan program changed
• Prepayment penalty was added
If the CD is re-disclosed for any other reason, there is no waiting period applies.
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Re-Disclosure
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Team Work - Communication
SETTLEMENT AGENT
Early communication with realtors, borrower, title companies, LO’s, and lender crucial for a smooth transaction..
THANKS FOR WATCHING
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