TILA ­ RESPA Integrated Disclosure Rule, which is effective October, 3, 2015.

Published On: January 29, 2016


What’s Changing?

• GFE, TIL & HUD­1 are being replaced • GFE &TIL will now be the Loan Estimate • HUD & Final TIL will now be the Closing Disclosure • Disclosure delivery time frames • Lender will issue the Closing Disclosure • Lenders compliance practices and reporting • Changes will apply to all closed­ended mortgages except: 1. Reverse mortgages 2. Mobile homes 3. Homes not attached to land.

The Loan Estimate:   

• Includes key features of loan terms, payments, costs, and cash due at closing. • Must contain a good faith estimate of credit costs and transaction terms. • Creditors should exercise due diligence to obtain the necessary information to complete the Loan Estimate. • Any fees that are unknown must have a reasonable estimation and be marked as an estimate on the Loan Estimate.

Except for certain instances (Changed Circumstance), the Loan Estimate cannot be revised due to errors, miscalculations, or underestimation of charges. • No fees can be charged to the consumer (except for credit report) prior to receiving the Loan Estimate. • The creditor may not require a borrower to submit income, asset, etc. documents prior to providing the Loan Estimate.

Important Dates:  

The Loan Estimate must be delivered by the third business day after the application. The Loan Estimate must be delivered or placed in the mail no later than the seventh day before loan consummation (consumer can waive in some emergency situations).

For the purposes of delivering the Loan Estimate, a business day is a day on which the creditor's office is open to the public and carrying out substantially all of its business functions. 

Pieces of information needed for an application:

1. Name

2. Address

3. Sales Price or Value

4. Income

5. Social Security Number

6. Desired Loan Amount 

Delivery Options Loan Estimate:

If the Loan Estimate is not delivered in person, the consumer is presumed to have received it three business days after it’s placed in the mail or emailed. Loan consummation is when the borrower signs the closing documents.

Tolerance Buckets:

No Tolerance Bucket ­ fees may exceed amount disclosed without limitation. These fees include: • Prepaid interest • Property insurance premiums • Funds placed in escrow, impound, reserve, or similar account.

10% Tolerance Bucket: ­

cumulative amount of fees cannot exceed 10% of original estimate. These fees include: • Recording fees • Charges for third­party services where the consumer is allowed to shop, but selects a third­party provider on the creditor’s written list of service providers. Creditor must refund any sum that exceeds 10% tolerance within 60 calendar days after loan consummation.

Zero Tolerance Bucket: ­

fees may not increase from amount disclosed on the Loan Estimate These fees include: • Transfer taxes • Fees paid to the creditor, mortgage broker, or an affiliate of either. • Fees paid to an unaffiliated third­party if the creditor did not allow the consumer to shop. Fees that exceed original amount must be refunded for the amount above the original fee within 60 calendar day of loan consummation.  

When can a creditor charge more than what was on the Loan Estimate?

• When the charge is NOT in the zero tolerance category and the charge variation falls within an explicit tolerance threshold • When it's allowed under a Changed Circumstance.

Changed Circumstance: 

Creditors are bound to the fees listed on the Loan Estimate and may not issue revisions except in certain circumstances. • Changed Circumstances may include: • An extraordinary event beyond the control of any interested party or other unexpected event specific to the consumer transaction. • Information specific to the consumer or loan that the creditor relied upon when providing the Loan Estimate and was inaccurate or changed after the disclosures were provided. • New information specific to the consumer or loan that the creditor did not rely on when providing the Loan Estimate. The revised Loan Estimate must be delivered or placed in the mail three business days (standard days for when the creditor is open and operating) after learning about the changed circumstance. The borrower must have the revised Loan Estimate at least four business days (all calendar days except for Sunday and holidays) prior to loan consummation.

The Closing Disclosure: 

• Looks similar to the Loan Estimate • Designed for comparison • Includes the following information: Loan terms Projected payments Cash back or due at closing Fee breakdown Escrow account information AP and AIR tables (if applicable) Loan Estimate comparison Transaction Summary Loan calculations (APR, TIP, etc.) Contact information.

Important Dates:

The Closing Disclosure must be received by the consumer at least three business days before loan consummation. For a purchase transaction, the seller must receive the Closing Disclosure no later than the day of loan consummation. For the purposes of delivering the Closing Disclosure, a business day is all calendar days except Sundays and federal, legal public holidays.  

Delivery Options Closing Disclosure:  

If the Closing Disclosure is not delivered in person, the consumer is presumed to have received it three business days after it’s placed in the mail or emailed.

Closing Disclosure Revisions:

A revised Closing Disclosure should be provided if any of the following events occur: 1. Changes that occur before consummation that trigger a new 3­day waiting period. 2. Changes that occur before consummation that DO NOT trigger a new 3­day waiting period. 3. Changes that occur after consummation.

Certain changes can be made to the Closing Disclosure without delaying closing. Certain changes can be made to the Closing Disclosure after closing.

Delivery of Revised Closing Disclosure:

If the revision takes place before loan consummation, the Closing Disclosure must be delivered to the consumer by the day of loan consummation. If the revision takes place after the loan consummation, the Closing Disclosure must be delivered or placed in the mail within 30 calendar days of receiving the change information.

Disclaimer:

The material contained in this presentation is based on information provided by the Consumer Financial Protection Bureau (CFPB). Although we have made every effort to ensure the accuracy of the information in this presentation, Primary Capital Mortgage does not guarantee the accuracy of the information contained herein, or speak on behalf of the CFPB. This presentation is not comprehensive and does not provide a list of all the changes and updates associated with the new TILA­RESPA Integrated Disclosure Rule. This presentation is for general use only and not intended to be used or relied upon for TRID guidelines or legal advice. For the official TRID rules, please visit www.consumerfinance.gov