TRIDTILA-RESPA INTEGRATED DISCLOSURESRESPA INTEGRATED DISCLOSURES

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Effective with applications taken on or after August 1, 2015qLoan Estimate – Replaces and combines Early Truth

Estimate

qClosing Disclosure – Replaces and combines Final Truth

Effective with applications taken on or after August 1, 2015

Replaces and combines Early Truth-In-Lending Disclosure and Good Faith

Replaces and combines Final Truth-In-Lending Disclosure and HUD-1

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CoverageIncluded:q Loans secured by real property q Construction-only loansqLoans secured by vacant land, non-dwelling structures or by 25 or more acresqCredit extended to certain trusts for tax or estate planning purposes

Excluded:q HELOC’sqReverse Mortgagesq Chattel-dwelling loans, such as loans secured by a mobile home or by a dwelling that is not attached to real property.

dwelling structures or by 25 or more acresCredit extended to certain trusts for tax or estate planning purposes

dwelling loans, such as loans secured by a mobile home or by a dwelling that is not attached

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Old and new at the same timeq Early use of integrated disclosures is not permittedqExamples:

ØIf application is received on July 31, 2015, provide Early TIL and GFE, and Final TIL and HUD-1.Ø If application is received on August 1, 2015, provide LE and CD.

qImplementation challenge – must maintain old and new software and ØCannot mix old with new

Old and new at the same timeuse of integrated disclosures is not permitted

application is received on July 31, 2015, provide Early TIL and GFE, and Final TIL and

If application is received on August 1, 2015, provide LE and CD.

must maintain old and new software and procedures

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Loan Estimate ComponentsqThree Pages

qTiming Requirements for delivery

qCannot charge for any fees except for cost of credit report

qForm is dynamic and changes as loan type and product change

Loan Estimate Components

Cannot charge for any fees except for cost of credit report

Form is dynamic and changes as loan type and product change

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Loan Estimate q LE is to be provided to Consumer within three days of receipt of application

q Creditor is responsible of accuracy of the LE q “Good Faith Estimate” is not a new concept, but is better definedq Creditors will require third party vendors to supply accurate costs

I have researched everything I possibly can to provide this

Loan Estimate!

LE is to be provided to Consumer within three days of receipt of application

“Good Faith Estimate” is not a new concept, but is better definedCreditors will require third party vendors to supply accurate costs

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Uniform Closing Dataset and Mortgage Industry Standards Maintenance Organization

q GSE’s are developing standardized mapping

q Industry using same terminology

ØGFE and Early TIL is now Loan Estimate

ØHUD-1 and Final TIL is now Closing Disclosure

Uniform Closing Dataset and Mortgage Industry Standards Maintenance

1 and Final TIL is now Closing Disclosure

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Closing Disclosure ComponentsqFive Pages

qPage 1 mirrors Loan Estimate

qPage 2 lists itemization of costs with columns indicating party and timing of payment

q Page 3 has added information to show changes to costs and how cash to close was calculated

q Page 4 has loan disclosures and AP and AIR tables when applicable

q Page 5 has Truth-In-Lending information and signature to confirm receipt

Closing Disclosure Components

Page 2 lists itemization of costs with columns indicating party and timing of payment

Page 3 has added information to show changes to costs and how cash to close was calculated

Page 4 has loan disclosures and AP and AIR tables when applicable

Lending information and signature to confirm receipt

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Closing Disclosure Contact TableClosing Disclosure Contact Table

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Closing Disclosureq Information on the Closing Disclosure will mirror the information from the Loan Estimate

q Comparison table

Closing DisclosureInformation on the Closing Disclosure will mirror the information from the Loan Estimate

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Closing Disclosure Fee Bucketsq Zero Tolerance Limitation

q10% Tolerance Limitation

qNot subject to Tolerance Limitation

Closing Disclosure Fee Buckets

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Closing Disclosure Delivery

qThe Closing Disclosure must be received by the consumer three business days prior to consummation.

RECEIPT means:ØFace-to-Face – immediate§ Mail § FedEx (or other over-night delivery service)§ E-SIGN compliant

* 3 business day period for receipt of Closing Disclosure can be shortened with proof of earlier receipt.

Closing Disclosure Delivery

The Closing Disclosure must be received by the consumer three business days prior to

night delivery service) *3 business days from sending

* 3 business day period for receipt of Closing Disclosure can be shortened with proof of

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Timingq The Closing Disclosure must be provided three days prior to consummation

qThe “Waiver” – Forget it!

q Re-disclosure

q APR out of tolerance? Product change?

Addition of Prepayment Penalty? Start over!

The Closing Disclosure must be provided three days prior to consummation

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Closing Disclosure PreparationqWho will prepare?ØWhat part? ØSome? – The settlement agent is responsible for delivery of the Sellers

Closing DisclosureØAll?

qWho will deliver?

qWho will track delivery and acknowledgement of receipt?

Closing Disclosure Preparation

The settlement agent is responsible for delivery of the Sellers

Who will track delivery and acknowledgement of receipt?

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Delivery of Closing Documents

qBorrower must receive documents signed at the closing table.

qHanding borrower a disc of their documents is not compliant with E

qInforming borrower the documents will be emailed to them is not complaint with E

Delivery of Closing Documents

Borrower must receive documents signed at the closing table.

Handing borrower a disc of their documents is not compliant with E-SIGN

Informing borrower the documents will be emailed to them is not complaint with E-SIGN

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Changes in Business Practicesq How will we (Lender and Settlement Agent) provide loan information to get the disclosures out on time? ØPhone tag? Re-keying? Integrated systems?

q What evidence of compliance will be neededØ Proof of receipt for 3-dayØ Supporting documents

q Changes in closing instructions

q Possible changes to document delivery

Changes in Business PracticesHow will we (Lender and Settlement Agent) provide loan information to get the disclosures

keying? Integrated systems?

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PenaltiesqTruth-In-Lending Act applies to the disclosures and only applies to creditors

qCFPB can assess civil money penalties as high as 1 million per day for knowingly violating the law

Lending Act applies to the disclosures and only applies to creditors

CFPB can assess civil money penalties as high as 1 million per day for knowingly violating the

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Banks and Service Providers ResponsibleBanks and Service Providers

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E-SIGNELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACTELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE

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E-SIGN Objectiveq PresentationØClear and conspicuous. Ask yourself what your parents or siblings would see on the page.

q AcceptanceØ Are there options other than “I Agree”?ØProcess should be clear and the intent of the process should be:

1. I want to be bound by this agreement2. I received a copy of the agreement3. I have read the agreement4. I signed this agreement

Clear and conspicuous. Ask yourself what your parents or siblings would see on the page.

Process should be clear and the intent of the process should be:

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E-SIGN RequirementsqAffirmative consent, and not withdrawn

qConsent preceded by a statement:ØRight to receive paper copyØHow to withdraw and consequences (i.e. fees) ØIf consent applies to multiple transactions or a particular transactionØHow to update contact informationØAdvised of hardware/software requiredØConsent re-acquired if hardware/software changes pose a material risk to accessibility

SIGN Requirements

How to withdraw and consequences (i.e. fees) If consent applies to multiple transactions or a particular transaction

acquired if hardware/software changes pose a material risk to accessibility

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Demonstrate v. Declareq I want e-documents. Sign me up.

q A declaration is not good enough.

q Downloading a PDF to complete and mail is not an electronic signature.

qMailing a contract for execution is a hybrid process and not E

Demonstrate v. Declare

Downloading a PDF to complete and mail is not an electronic signature.

Mailing a contract for execution is a hybrid process and not E-signature

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Demonstrate Consent PUSH -- Bank sends email with encrypted PDF containing

instructions

PULL -- Customer receives and opens the message. “Click this link or go to enter the word “blue” in the test box.”

Demonstrate Consent – Push or PullBank sends email with encrypted PDF containing

Customer receives and opens the message. “Click this link or go to www.ourbank.com/test and

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E-Signature

q “electronic signature”

q Don’t use “I Agree” as the default.

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E-SIGNThere are certain steps to validate the authenticity of an electronically signed form.

1. Click on the Adobe icon to open the Adobe sidebar.

There are certain steps to validate the authenticity of an electronically signed form.

1. Click on the Adobe icon to open the Adobe sidebar.

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E-SIGNThe Adobe Side Bar will show a signature icon The Adobe Side Bar will show a signature icon

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E-SIGNAfter opening the side panel, you can see information on who verified the signatures and when it was signedAfter opening the side panel, you can see information on who verified the signatures and when

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E-Signature

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Hang onto the validity!It is possible to loose the validity of the electronically signed document if it is not imported correctly. You could loose the signature!

Hang onto the validity!It is possible to loose the validity of the electronically signed document if it is not imported

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Working Together!.

Working Together!

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