Source: http://conmarsystems.com/index.php?option=com_content&view=article&id=14:tila-respa-integrated-disclosures-faq-s&catid=8&Itemid=103
Timestamp: 2019-04-21 00:27:33+00:00

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No. "N/A" cannot be used where no value is to be disclosed on the form. Generally, the Rule states that when a disclosure is not applicable, it should be deleted from the form or left blank.
Is there a required naming convention used for charges on the Loan Estimate?
No. The Rule did not prescribe a uniform naming convention for fees, or a standard list of fee names. But some specific types of charges must be disclosed in certain ways. The CFPB provided the example of points paid to lower the interest rate, which are disclosed under § 1026.37(f)(1)(i) in the first line of Origination Charges in a specific manner, as shown on Form H-24. Another example provided was that title insurance services disclosed under § 1026.37(f)(2) and (3) are required to include the prefix "Title -."
Does the creditor have to disclose an itemization of the amount financed with the Loan Estimate?
No. A creditor would not disclose an itemization of the amount financed with the Loan Estimate. The Itemization of Amount Financed, which may be required under § 1026.18(c), is not required to be provided either with the Loan Estimate or the Closing Disclosure for transactions covered by the Rule. The CFPB staff noted that for the Closing Disclosure, § 1026.38(o)(3) requires only the Amount Financed to be disclosed, calculated in accordance with § 1026.18(b). The CFPB staff also noted that some disclosures are not disclosed on the Loan Estimate, such as the Amount Financed and Finance Charge, but are disclosed on the Closing Disclosure.
No. For transactions with a seller, § 1026.37(a)(7) requires the label to state "Sale Price." For transactions without a seller, the creditor is required to disclose the estimated value of the property using the label "Prop. Value."
A creditor is required under § 1026.37(a)(10) to choose only one product type from the following: Step Rate, Adjustable Rate, or Fixed Rate. If a loan has both a Step Rate and an Adjustable Rate period, it must be disclosed as Adjustable Rate. The hybrid loan would fall under the definition of "Adjustable Rate" because even though some of the interest rate changes during the step periods are known, it has an adjustable rate period during which the interest rate that will apply is not known at consummation.
The mailing address disclosed in this section must be the applicant's U.S. postal mailing address. No other type of address, such as an applicant's email address, may be used instead.
No. Section 1026.37(a)(3) requires the creditor's name. The Rule requires the broker to conduct a good faith effort to disclose the creditor's name. But if it is not known, the broker may leave this part of the disclosure blank. But the broker cannot put its own name in that section, because the Rule does not instruct the broker to substitute its name for the creditor's. See comment 37(a)(3)-2.
Section 1026.37(a)(12) indicates the creditor must disclose a unique loan ID number. If the creditor is unknown, is the broker required to generate and disclose a unique ID number?
No. A broker would not be required to generate and disclose its own unique loan ID number assuming the creditor's Loan ID# is not reasonably available to the broker, the loan ID number could be left blank. As Comment 37(a)-1 states, the Loan ID# must be a unique alphanumeric identifier determined by the creditor. The creditor can outsource this function and allow brokers to generate and assign loan ID numbers on their behalf. Creditors could also provide unique loan ID numbers to brokers in advance of the disclosures to use on the LE. In those circumstances, the loan ID number would be reasonably available to the broker and would be required to be disclosed on the LE. However, where a creditor hasn't been determined, and the broker does not have any loan ID number based on the best information reasonably available, it can be left blank. The CFPB staff states that this is consistent with comment 37(a)(3)-1, which states that the creditor's name can be left blank if unknown. The staff also states that this is consistent with comment 37-1.
What about after the creditor is known? Is the creditor required to disclose its own unique loan ID once there is a creditor for the loan?
Yes. A creditor would be required to disclose the loan ID number on any subsequent disclosures it provides, such as revised Loan Estimates or the Closing Disclosure. The creditor is ultimately responsible for the disclosures.
The creditor should disclose the initial interest rate. Section 1026.37(b)(2) requires disclosure of the interest rate applicable at the date of consummation. A different calculation is only used when the initial interest rate is not known at the time the Loan Estimate is completed. Preamble to § 1026.37(b)(2) discusses multiple interest rates applying to different portions of a loan's principal balance in a precomputed transaction, and could be read to imply that the disclosure required would be one interest rate that is a composite of the different interest rates that apply to the loan's principal balance. However, the rule is clear that disclosure requires is the initial interest rate that will be applicable to the transaction at consummation.
The CFPB staff stated that these time periods are disclosed all in whole years, except when there are fewer than 24 months in that time period, in which case they are disclosed in whole months with "mo."
Yes. If the transaction terms provide for other than monthly periodic payments, § 1026.37(o)(5) provides that the creditor must disclose the applicable period set out in the terms of transaction, e.g. bi-weekly.
In this situation, the automatic termination of mortgage insurance would not be disclosed. The automatic termination of mortgage insurance is only disclosed if there are three or fewer columns. If there are already four columns required to disclose changes to the periodic principal and interest payment, regardless of when the changes to the principal and interest payment occur during the loan term, the creditor would not disclose the automatic termination of mortgage insurance. Also, comment 37(c)(1)(3)-1 clarifies that mortgage insurance premiums are not disclosed as a range of payments.
Yes. If no escrow account is established, the row must be disclosed, but the amount should be disclosed as zero.
Yes. Flood insurance is included in the Homeowner's Insurance disclosure. Section 1026.37(c)(4)(ii) defines what insurance is to be included, which are charges listed under section 1026.43(b)(8). This includes "premiums or other charges for insurance against loss of or damage to property, or against liability arising out of the ownership or use of property, written in connection with a credit transaction," and this would include flood insurance.
No. The modifications for transactions without a seller under § 1026.37(d)(2) and (h)(2) are not required. They are optional. However, both of the modifications to the Costs at Closing table and the Calculating Cash to Close table (on page 2) must be used together if using the alternative Loan Estimate. See comment 37(d)(2)-1.
No. It could not. Section 1026.37(f)(1)(i) is clear that only points charged in connection with a reduction in the interest rate may be disclosed as points on the form. If there are no points charged to reduce the interest rate, the creditor leaves this row blank. The answer also relies on comment 37(f)(1)-3, which, for charges other than the points paid to reduce the interest rate, requires clear and conspicuous terminology that describes the service. The answer also relies on comment 37(f)(1)-4, which states that the creditor should leave the points line blank if there are no points paid to reduce the interest rate.
Assume the creditor will pay a Loan-Level Price Adjustment (LLPA) to the secondary market purchaser (1026.37(f)(1)). If the creditor does not charge the consumer an upfront fee, but passes the cost of the LLPA on to the consumer through interest, is the creditor required to disclose the LLPA?
No. In this scenario, the creditor is not charging the consumer an upfront fee, but capturing the LLPA through the interest rate. It would not be considered a settlement charge to disclose under § 1026.37(f).
If the creditor does charge the consumer an upfront fee, should it be disclosed as a “point” or an “origination charge”?
The answer depends on how the upfront fee is charged. If the upfront LLPA is charged at closing as a flat origination charge, then it would be itemized and labeled as an "origination charge." However, the creditor could include the cost of the LLPA in the interest rate, and then allow the borrower to pay a point to reduce the interest rate. In that case, the charge would be disclosed as a point and not a fee. See comment 37(f)(1)-5.
If the creditor offers the borrower a zero or lower point option, and the consumer chooses to pay for discount points in an amount greater than the LLPA to obtain a lower rate, may the creditor disclose the amount paid as discount points rather than an origination charge?
Yes. Creditors have some degree of flexibility in how they factor in LLPAs. If creditor includes the LLPA in the interest rate and discounts the interest rate through the payment of points. This is consistent with guidance the CFPB has provided with respect to the determination of bona fide discount points, which generally permits the undiscounted rate to include LLPAs. Whether the discount point is a bona fide discount point and excludable from "points and fees" is not a factor in whether it is disclosed as a point on the integrated disclosures.
If the FHA/VA loan prohibits a type of fee, the creditor should not charge the fee. If the program allows the creditor to charge the fee and offset it with a lender credit, the creditor must disclose the charge and the lender credit. The CFPB, however, does not weigh in on whether a fee is permissible for a particular loan program.
The creditor generally decides the extent of itemization in the origination charges section on the Loan Estimate, except for charges that are required to be itemized, such as points and LLPAs. To the extent these are settlement services the consumer will pay for, they are disclosed under Service You Cannot Shop For under § 1026.37(f)(2). Whether it is disclosed as a settlement service under this section depends on whether the creditor requires the consumer to pay for it, or treats it as normal business overhead expenses, such as rent or utilities.
No. Each category in the Loan Costs section has a prescribed number of lines. A creditor cannot change the number of lines on the Loan Estimate. If a creditor runs out of lines for Origination Charges or Services You Cannot Shop For, it must disclose the aggregate amount of the additional charges in the last line of the section as "additional charges." § 1026.37(f)(6)(i). However, for Services You Can Shop For, the additional charges can be itemized in an addendum to the Loan Estimate. § 1026.37(f)(6)(ii).
This should be disclosed as a Lender Credit. See comment 37(g)(6)(ii)-2. The creditor may not add an addendum to itemize the lender credits. The CFPB made a policy decision not to have these credits itemized on the Loan Estimate.
No. It does not. The taxes disclosed under § 1026.37(g)(1)(i) are limited to those associated with the recording of documents. Sales or other taxes assessed on other services and paid to the individual service provider are included in the cost of the individual service, and not disclosed in the Recording Fees and Other Taxes section.
No, assuming this is about optional credit insurance premiums charged monthly, they would not be disclosed there. The amount disclosed in this section is any amount paid in connection with the transaction as a closing cost. Section 1026.37(g)(4) would only be include amounts paid up front, to the extent permissible.
The amounts to be deducted are third party payments not otherwise disclosed as closing costs under § 1026.37(f) or (g). They would include the payoff of an existing loan with the same creditor, if not included in the Other category under Other Costs.
No. The deposit would not be subtracted. The calculation of the Closing Costs Financed is not affected by the deposit. The deposit has its own line item.
No. Closing Costs Financed is not affected by seller credits. Seller credits are disclosed as a separate Seller Credits line item.
For the “Downpayment/Funds from Borrower” line item, does the “existing debt” being satisfied include any type of debt, other than debts disclosed under §1026.37(g), whether or not the creditor required it to be repaid?
Yes. Any type of debt would be included in the Funds from Borrower line item, except for in purchase transactions, which have special rules for that (see comment 37(h)(1)(v)-1). The creditor is required to complete this section based on the best information reasonably available.
What debt is disclosed under § 1026.37(g)(4) instead of as part of Payoffs and Payments under the alternative Calculating Cash to Close table?
To the extent a creditor discloses debts the creditor knows about based on the best information reasonable available, the creditor may disclose these amounts under § 1026.37(g)(4). If it does not disclose the debt not there, then its approximate value is included in the Payoffs and Payments line in the alternative Calculating Cash to Close table.
The Payoffs and Payments line item includes any amounts paid or payoffs to be made, based on the best information reasonably available to the creditor. The amount is not limited to those debts required to be paid by the creditor. See comment 37(h)(2)(iii)-1.
Yes. The alternative table can be used. To the extent there are multiple transactions, each loan covered by the rule will have a separate Loan Estimate and Closing Disclosure. In the case of a first-lien cash-out refinance with subordinate-lien financing, the settlement agent can total up the amounts due to or from the consumer across all the loans to determine the final amount due to or from the consumer. There is no requirement in the alternative Calculating Cash to Close provisions for the Loan Estimate or the Closing Disclosure for one of the loans to disclose the "master" Cash to Close amount across all the transactions.
Yes. When the calculation of § 1026.37(h)(1)(viii) (the sum of all the amounts disclosed in the table) is negative, then the negative number is disclosed for the Estimated Cash to Close here and also on Page 1 under § 1026.37(d)(2). The negative number indicates the consumer is receiving that amount at closing.
The Adjustable Payment table would be disclosed if the Fixed Rate loan has any adjustable payment features. The Adjustable Interest Rate table is never disclosed for a Fixed Rate loan.
Yes. In a loan with a mortgage broker, both the creditor and mortgage broker's contact information, including the loan officer information (name and NMLS ID), must be disclosed. However, this is assuming that the names and IDs are available based on the best information reasonably available. This standard includes an obligation to conduct due diligence to obtain the information. But if no individual loan officer has been assigned, or if the creditor name is not known, it can be left blank. When the creditor in a brokered transaction does receive the loan, the creditor would disclose the contact information, including the information for a loan officer.
Yes. Creditors should use the same person's NMLSR ID that is identified on other documents under § 1026.36(g). The CFPB staff states that these two provisions should be read the same, even though § 1026.36(g) requires this to be the LO with "primary responsibility for origination" and § 1026.37(k) describes this person as the "primary contact for the consumer." The CFPB staff states that although the language is different, they consider this to be the same person. The CFPB staff also noted that section 1026.36(g)(2)(ii) will be amended prior to the August 1, 2015 effective date to require that person's NMLSR ID on the integrated disclosures.
The APR is not rounded and should be disclosed to 3 decimal places. However, if it is a whole number, it is truncated at the decimal point (e.g., 7%, and not 7.0% or 7.00%). If the APR has only two decimal points, a zero is added to bring it to three decimal points (e.g., 7.250%, and not 7.25%). This is different from other percentage amount disclosures on the form for which a zero is not added to bring a two-decimal amount up to three decimal points.
Yes. The creditor must disclose its intent to transfer servicing at any time after consummation. See comment 37(m)(6)-1, which states that the disclosure depends on the creditor's intent at the time of issuance.
Yes. The creditor must disclose this, because the subsidiary or affiliate would be considered another servicer. See comment 37(m)(6)-1.
This disclosure satisfies the disclosure requirement of Regulation B. But the creditor is still required to provide a copy of the appraisal under Regulation B. See the preamble of the final rule, 78 FR 79985-87.
How can a creditor communicate to the consumer that the identification of a service provider on the written list is not an endorsement of that service provider?
A creditor is permitted to include language indicating that inclusion of a service provider on the written list is not an endorsement of the provider. See comment 19(e)(1)(vi)-6. But there is no specific language for this statement. The general requirement that information be disclosed clearly and conspicuously under § 1026.17(a) would apply to the language included by the creditor.
The definition of application does not include loan term or product type. What if a consumer submits the six elements listed in the rule, but does not specify the type of product or term?
If a consumer submits an application, a requirement to provide the Loan Estimate is triggered under § 1026.19(e). An application is defined as the submission of six pieces of information: (1) the consumer’s name, (2) the consumer’s income, (3) the consumer’s Social Security number to obtain a credit report (or other unique identifier if the consumer has no Social Security number), (4) the property address, (5) an estimate of the value of the property, and (6) the mortgage loan amount sought.
The obligation to provide consumers with a Loan Estimate is silent regarding any assumptions a creditor may make about loan features such as the product type or term. Accordingly, provided that the disclosures in the Loan Estimate are made in good faith and consistent with the best information reasonably available to the creditor at the time the Loan Estimate is issued, a creditor has discretion with respect to what product, term, or other features it uses to issue a Loan Estimate.
A creditor is also not required to provide multiple Loan Estimates for every product it offers, but can do so if it chooses.
What if the consumer starts filing out an online application and saves it with the six pieces of information entered, but has not yet submitted it to the creditor?
A creditor does not have to provide a Loan Estimate to a consumer until the consumer has submitted all six pieces of information that constitute an application. If a consumer has filled out and saved (but not submitted) a mortgage application form online to complete at a later time, even if the consumer included in the saved form the six pieces of information that constitute an application the consumer is not considered to have submitted an application that requires issuance of a Loan Estimate.
May an online application system reject applications submitted by a consumer that contain the six elements of an application because other preferred information is not included?
No. Although the rule provides a creditor with a degree of flexibility in how it may collect the six elements of an application, a creditor may not refuse any of the pieces of information because it wants further information. A creditor’s obligation to provide a Loan Estimate is triggered if a consumer provides all six elements of an application.
Do the new disclosure requirements apply to assumptions?
Yes, provided that “assumptions” means a post-consummation event that is deemed a new closed-end credit transaction secured by real estate as defined by § 1026.20(b).
Note that the assumption provision (§ 1026.20(b)) has not been amended to refer to the new disclosures. It is our view that it would be helpful to make a conforming amendment to § 1026.20(b).
For seller Closing Disclosures that are provided on a separate document by the settlement agent pursuant to § 1026.38(t)(5) and § 1026.19(f)(4), are creditors required to collect and retain documents related to the seller that were provided only to the settlement agent?
The short answer is that creditors are obligated to obtain and retain a copy of completed Closing Disclosures provided separately by a settlement agent to a seller under § 1026.38(t)(5). However, creditors are not obligated to collect underlying seller-specific documents and records from that third party settlement agent to support the Closing Disclosure.
To the extent that the creditor receives documentation related to the seller’s Closing Disclosure, such as when seller-related documents are provided to the creditor by the third party settlement agent along with the complete Closing Disclosure, the creditor should adhere to the normal record retention requirements set forth in §1026.25(c) and retain these records. But this does not mean that the rule imposes a mandatory collection requirement on creditors for this underlying information. (Please refer to the webinar for the full explanation).
Is owner’s title insurance not required by the creditor subject to the 10% cumulative tolerance?
No. Owner’s title insurance that is not required by the creditor is not subject to the 10% cumulative tolerance. The CFPB is aware that the preamble to the final rule contains potentially conflicting language, but advises that the final rule text is what should be followed.
Under § 1026.19(e)(3)(ii), the 10% cumulative tolerance category includes recording fees and charges paid to unaffiliated third party service providers when the consumer is permitted to shop for a settlement service provider, but chooses a provider from the creditor’s written list of providers.
To the extent owner’s title insurance is not required by the creditor and is disclosed as an optional service, under the rule the insurance is not subject to any percentage tolerance limitation, even if paid to an affiliate of the creditor.
Does the 7-day waiting period before consummation that applies to Loan Estimates apply to revised disclosures?
No. The 7-day waiting period is a TILA statutory provision that applies to the initial Loan Estimate that is provided after receipt of an application. The 7-day waiting period does not apply to revised Loan Estimates.
However, the latest that a revised Loan Estimate may be received by a consumer is 4 business days before consummation. If a creditor will rely on the mailing rule, under which a consumer is deemed to receive a Loan Estimate 3 business days after delivery by any method other than personal delivery, the creditor would need to send the revised Loan Estimate at least 7 business days before consummation.
Note that the confusion over this issue may, at least in part, be due to a glitch in the Small Entity Guide. The CFPB has taken steps to update the Small Entity Guide to fix this issue and more accurately reflect this requirement. The CFPB anticipates the revised Small Entity Guide will be released soon.
Are creditors required to provide revised Loan Estimates on the same business day that a consumer or loan officer requests a rate lock? § 1026.19(e)(3)(iv)(D).
Not necessarily. A creditor must issue a revised Loan Estimate when the interest rate is locked if the interest rate was floating when the prior Loan Estimate was issued. The rule provides that the revised Loan Estimate must be issued on the same business day the rate “locked.” “Locked” is not expressly defined in Reg Z and would normally be defined by state law or contract law. However, an example in comment §1026.19(e)(3)(iv)(D)-1 provides that the revised Loan Estimate must be provided on the same business day that the rate lock agreement is entered into, not necessarily the same day the rate lock is requested.
The CFPB is considering amending the rule regarding the requirement to issue a revised Loan Estimate in connection with a rate lock because numerous stakeholders have raised operational and consumer protection concerns. Note that it is our view that without a revision to the rule, it would be prudent for creditors to view the rule as requiring that when the prior Loan Estimate was issued when the rate was floating and the rate is then locked, the creditor must issue the revised Loan Estimate when the rate is locked (even if the lock occurs before a written confirmation or agreement is sent).
The information contained in this notice is provided with the understanding that the author and company are not engaged in rendering legal advice. As such, information should not be used as a substitution for consultation with credit union legal counsel.

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