INTEGRATED MORTGAGE DISCLOSURES

Transcription

1 INTEGRATED MORTGAGE DISCLOSURES (TILA RESPA RULE) Financial Solutions Patti Blenden October CFPB s Statutory Objectives 1. To ensure that consumers have timely and understandable information to make responsible decisions about financial transactions; 2. To protect consumers from unfair, deceptive, or abusive acts or practices, and from discrimination; 3. To reduce outdated, unnecessary, or overly burdensome regulations; 4. To promote fair competition by enforcing the Federal consumer financial laws consistently; and 5. To advance markets for consumer financial products and services that operate transparently and efficiently to facilitate access and innovation. 2 Loan Estimate page 1

2 September 2014 Guide The Loan Estimate and Closing Disclosure must be used for most closed end consumer mortgages other than a reverse mortgage. HELOC s & mobile home only (without land) continue to use current forms Designed to provide consumers a better understanding of: Key Features Costs Risks Certain Mortgage &Variable Rate Transactions (a) Mortgage transactions subject to RESPA (current) (a) Reverse mortgage transactions subject to RESPA (eff. 8/1/15) (b) Certain variable rate transactions (c) Electronic disclosures (d) Substitutes for variable rate disclosures (e) Mortgage loans secured by real property Early disclosures (eff. 8/1/15) (e)(1) Provision of disclosures (e)(2) Predisclosure activity (e)(3) Good faith determination for estimates of closing costs (e)(4) Provision and receipt of revised disclosures (f) Mortgage loans secured by real property final disclosures (eff. 8/1/15) (f)(1) Provision of disclosures (f)(2) Subsequent changes (f)(3) Charges disclosed (f)(4) Transactions involving a seller (f)(5) Prohibition on fee for disclosures (g) Special information booklet at time of application (eff. 8/1/15) 4 Loan Estimate page 2

3 Reg Z Subpart E SPECIAL RULES FOR CERTAIN HOME MORTGAGE TRANSACTIONS 5 Federally Related Mortgage Loan A federally related mortgage loan is any loan made by a federally regulated or insured financial institution, or a dealer or a mortgage broker that is: Secured by a lien on Residential real property upon which there is located, or following closing of the loan there will be constructed or placed using proceeds of the loan A 1 4 family residence or a mobile home. 6 Loan Estimate page 3

4 RESPA Coverage in 3 Simple Steps 1. The loan must be made to an individual as in Reg Z Individuals only are covered Non individual entities (business entities) are not covered 2. The loan must be primarily for a consumer purpose (parallels Reg Z s definition) The proceeds need not necessarily be used for any housing related purpose Look to the primary purpose for multi purpose loans 3. Loan must be secured by a lien on residential real property RESPA is purpose driven, but collateral dependent and lien position does not matter. Residential real property means dirt, and must be residential in character. There must be a 1 to 4 family residence on the land (e.g., stick built home, manufactured home, condo). House boats and travel trailers are not covered. RESPA coverage includes construction loans, if the proceeds will be used to build a residence on the land within 2 years. Occupancy of the residence as a primary residence is not required. Doesn t have to be the primary residence, owner occupied, or even owned by the borrower(s) 7 Exemptions: Loans Not Covered Loans secured by 25 or more acres of land (Eliminated 8/1/15) It doesn t matter where the land is, or if it is more than one parcel The character of the land doesn t matter, either This means it doesn t matter what buildings (if any) are on the land Vacant land Loan secured by vacant or unimproved property is exempt Loan is not secured by residential real estate But, it would not be exempt if the proceeds of the loan will be used to construct a 1 to 4 family dwelling or mobile home on the property within 2 years Ask what will be done with the proceeds of the loan! 8 Loan Estimate page 4

5 Exemptions: Loans Not Covered Business purpose loans Fails # 1 or # 2 of the 3 part test RESPA, like Reg Z, is purpose driven RESPA follows Reg Z s definition of business purpose Loans to non individuals are not covered (a non individual cannot have a consumer purpose) Look to the primary purpose of mixed purpose loans as under Reg Z Rental property loans Prior to 1997, loans made to purchase or rehabilitate rental homes were covered by RESPA; not any more Purpose of the loan is what counts, not collateral 9 Exemptions: Loans Not Covered Temporary financing Less than two years is temporary confusing meaning? Are only certain types of temporary loans exempt? RESPA s language is confusing here ( such as a construction loan ), but no specific type of loan was originally intended by HUD according to HUD s staff, but Loan should be temporary in nature (i.e. construction or bridge loan) Intended to be replaced by more permanent financing Loans that are permanent in nature, regardless of term, cannot be temporary If the term of a construction loan is 2 years or more, it is not exempt 10 Loan Estimate page 5

6 Exemptions: Loans Not Covered Temporary Financing Exceptions to the exemption: Certain loans, although temporary in nature, are covered Where the same lender (e.g. construction lender) has issued a commitment to do the permanent financing (conditional or not) Where loan proceeds are used to finance the transfer of residence title to first user Who is the first user? First party to live on land as a residence (e.g. lot loans) 11 TILA RESPA Rule Significant Changes Initial Truth in Lending disclosure and RESPA Good Faith Estimate (GFE) combined into new Loan Estimate form ( and Appendix H 24) Given 3 business days after application received Final Truth in Lending disclosure and RESPA HUD 1 combined into new Closing Disclosure ( and Appendix H 25) Given 3 business days prior to consummation New timing requirements for disclosures ( (e) and (f)) New tolerance levels for disclosed estimates ( (e) and (f)) New pre disclosure requirements ( (e)(2)) The rule leaves sufficient flexibility for creditors, brokers and settlement agents to arrive at the most efficient means of preparation and delivery of the Loan Estimate and the Closing Disclosure. Creditors retain all responsibility! 12 Loan Estimate page 6

7 Change in RESPA Reg X Exemption Under the new rule, the existing RESPA exemption on property of 25 acres or more is eliminated to make Regulation X (RESPA) more consistent with Regulation Z (TILA). CFPB believes that most of these loans will be exempt under other exempted categories, such as loans for business, commercial or agricultural purposes. If a loan on property of 25 acres or more is not exempt by one of these other categories, the CFPB believes that the new integrated disclosures will be useful to the consumer. 13 NOT Covered by Integrated Disclosure Rule Loan Type Home equity lines of credit (HELOCs) and reverse mortgages Chattel dwelling loans (secured by a mobile home or by a dwelling not attached to land) Certain loan types subject to TILA but not RESPA (i.e., construction only, lot loans, etc. Entity Persons making 5 or fewer mortgages per year (therefore NOT a Creditor) No Interest Loans Secured by subordinate liens made for the purpose of down payment or similar home buyer assistance, property rehabilitation, energy efficiency, or foreclosure avoidance or prevention 14 Loan Estimate page 7

8 Partial Exemption Certain transactions associated with HUD housing assistance loan programs for low and moderate income consumers are partially exempt from new rule. They re given disclosures geared specifically to these exempt transactions. They re exempt from the requirements to provide: RESPA Special Information Booklet (settlement costs), RESPA Good Faith Estimate (GFE), RESPA settlement statement (HUD 1, HUD 1A), and Mortgage servicing transfer disclosure. The exemptions are still subject to all other requirements of Reg X, such as provisions implementing the servicing requirements in RESPA 6 (other than the application servicing disclosure statement), prohibitions on referral fees and kickbacks in RESPA 8, and limits on amounts to be deposited in escrow accounts in RESPA HUD s Housing Assistance Loans 6 Prerequisites The loan is secured by a subordinate lien; The loan s purpose is to finance downpayment, closing costs, or similar homebuyer assistance, such as principal or interest subsidies, property rehabilitation assistance, energy efficiency assistance, or foreclosure avoidance or prevention; Interest is not charged on the loan; Repayment of the loan is forgiven or deferred subject to specified conditions; Total settlement costs do not exceed one percent of the loan amount and are limited to fees for recordation, application, and housing counseling; and Loan recipient is provided at or before settlement with a written disclosure of the loan terms, repayment conditions, and costs of the loan. 16 Loan Estimate page 8

9 Integrated Disclosures Effective Date The new Integrated Disclosures must be provided for an application for a closedend consumer credit transaction secured by real property on or after 8/1/2015. Creditors required to use the GFE, HUD 1 and TILA forms for applications received prior to 8/1/2015. As applications received prior to August 1 st are consummated, withdrawn, or cancelled, the use of the GFE, HUD 1, and TILA will no longer be used for most mortgage loans. Example: For an application received 7/31/2015, the Loan Estimate, Closing Disclosures and the Special Information Booklet required under the new TILA RESPA integrated disclosure rule do not apply. Instead, the creditor and the settlement agent must provide the disclosure requirement under the existing TILA and RESPA rules, as applicable. Do not implement the forms use prior to the effective date! 17 Restrictions Effective on August 1, 2015 Regardless of an application s date before, on or after August 1 st, the following activity restrictions are effective on August 1, 2015: 1. Imposing fees on a consumer before the Loan Estimate has been received and the consumer has expressed an intent to proceed, with exception of credit report fee. 2. Providing written estimates of terms or costs specific to consumers before the Loan Estimate is received without a written statement information the consumer that the terms and costs may change. 3. Requiring the submission of verification documents related to the consumer s application before providing the Loan Estimate. 4. Provisions addressing the preemption of inconsistent state disclosure laws ( (a)(1)), as well as the commentary regarding the substantial similarity standard used to grant state exemptions ( ). 18 Loan Estimate page 9

10 Restriction on Fees Before Intent to Proceed Prohibited from imposing fees on a consumer before the Loan Estimate has been received and the consumer has expressed an intent to proceed, with exception of credit report fee Example: A third party submits a consumer's application to a creditor following a different creditor's denial of the consumer's application (or following the consumer's withdrawal of that application)a If a credit report fee has already been assessed, the new creditor or third party may not impose any additional fee until the consumer receives the Loan Estimate from the new creditor and indicates an intent to proceed with the transaction described by those disclosures. 19 Fees Imposed by a Person (e) Fee considered imposed if the person requires a consumer to provide a method for payment, even if the payment is not made at that time. XIf a person requires a $500 check or a credit card number to pay for a processing fee before the consumer receives the Loan Estimate, the person does not comply with the fee restriction, even if stated the check will not be cashed or the credit card will not be charged until after the disclosures are received and person waited until after subsequent intent to proceed to cash the check or charge the card. In contrast, a creditor or other person complies if they require a credit card number before receipt of the disclosures and later indicates an intent to proceed, provided that the consumer ONLY authorizes the credit report and is ONLY charged a reasonable and bona fide fee for obtaining the consumer's credit report. Creditor still complies if they maintain the credit card number on file and charges the consumer a $500 processing fee after the disclosures are received and the consumer later indicates an intent to proceed with the transaction described by those disclosures, provided that the creditor or other person requested and received a separate authorization for the processing fee after receipt of the disclosures followed by an intent to proceed. 20 Loan Estimate page 10

11 Requiring Verification Docs Too Early i. A creditor may ask for the sale price and address of the property, but the creditor may not require the consumer to provide a purchase and sale agreement to support the information the consumer provides orally before the creditor provides the early disclosures. ii. A mortgage broker may ask for the names, account numbers, and balances of the consumer's checking and savings accounts, but the mortgage broker may not require the consumer to provide bank statements, or similar documentation, to support the information the consumer provides orally before the mortgage broker provides the early disclosures. 21 New Forms In General Require disclosure of categories of information that will vary due to: Loan type, Payment schedule, Fees charged, Terms of transaction, and State law provisions Use exact format specified by CFPB in model forms. May include logo or slogan at top of LE Page 1 in the allotted space. Signature section on page 3 is optional. 22 Loan Estimate page 11

12 Definitions Application Per Reg Z Subpart C (Closed end Credit) (a)(3), submission of a consumer s financial information for purposes of obtaining an extension of credit. Six elements including name, income, SSN, property address, loan amount and estimated property value. Business Day For purposes of Loan Estimate, a day on which the creditor s offices are open to the public for carrying out substantially all of its business functions. Business Day For rescission and Closing Disclosure receipt by consumer, all calendar days except Sundays and legal public holidays (i.e., mail schedule) Issue Deliver or place in the mail the applicable disclosure 23 Special Information Booklet Creditor must deliver or place in the mail the Special Information Booklet not later than 3 business days after the mortgage application is received. If the creditor denies the application before the end of the 3 BDay period, the creditor is not required to send the booklet. 24 Loan Estimate page 12

13 LOAN ESTIMATE (LE) 25 Integrated Disclosures: Loan Estimate Old Disclosures Combined into the Loan Estimate Good Faith Estimate Early TIL ECOA Appraisal Notice RESPA Mortgage Servicing Transfer Previously 5 to 6 pages long Now 3 pages long 26 Loan Estimate page 13

14 Loan Estimate = GFE + etila The Loan Estimate form also includes several new disclosures required by the Dodd Frank Act, such as: Total interest percentage (TIP), Aggregate amount of loan charges and closing costs the consumer must pay at closing (Cash at Closing), Homeowner s insurance disclosure, and For refinance transactions the anti deficiency protection notice. 27 Loan Estimate Key Timing Provisions 3 Business Days After Application 7 Business Days Before Closing 28 Varies by Creditor. Gives Creditor flexibility to issue. Same for Everyone (rescission BDay). All about when applicant receives disclosures! Loan Estimate page 14

15 Loan Estimate Page 1 General Information General Application Information Loan Terms Projected Payments Costs at Closing Page 2 Closing Cost Details Loan Costs Other Costs Calculating Cash to Close Adjustable Payment (AP) Table Adjustable Interest Rate (AIR) Table Page 3 Additional Information About This Loan Contact Information Comparisons Table Other Considerations Table Appraisal Assumption Homeowner s Insurance Late Payment Refinance Servicing Confirm Receipt Signature Statement (optional) Delivered by the lender or the mortgage broker Lender retains responsibility for accuracy Content of Disclosures for Certain Mortgage Transactions (Loan Estimate) The disclosures required by are required to reflect the terms of the legal obligation between the parties, and if any information necessary for an accurate disclosure is unknown to the creditor, the creditor shall make the disclosure in good faith, based on the best information reasonably available to the creditor. Where a disclosure is not applicable to a particular transaction, unless otherwise provided by , form H 24 of appendix H to this part may not be modified to delete the disclosure from form H 24, or to state not applicable or N/A in place of such disclosure. The portion of the form pertaining to the inapplicable disclosure may be left blank, unless otherwise provided by If no points paid, leave that section blank. The adjustable payment and adjustable interest rate tables required by those paragraphs may be included only if those disclosures are applicable to the transaction and otherwise must be excluded. 30 Loan Estimate page 15

16 Issuance and Delivery (2.1.1) Loan Estimate (LE) must be provided to consumer by hand delivery or mail, no later than 3 BDays of receipt of application Application is considered received when consumer provides: Address of property Loan amount Income Estimated property value Name Social Security Number (to obtain credit report) Removed the 7 th Catch All 31 Ability to Repay (ATR) CFPB clarifies that this timing provision does not prevent a creditor from fulfilling its obligation to evaluate a borrower s ability to repay. Creditors will be able to collect any information needed to evaluate a borrower s ability to repay as long as they sequence the collection of that information to ensure the creditor provides a Loan Estimate within 3 business days of receiving the required 6 application pieces of information. Creditors cannot condition the issuance of the disclosure on verifying the information. 32 Loan Estimate page 16

17 Application Submission of application Writing Electronic format Written record of oral application Issue Loan Estimate within 3 business days of receiving all 6 application items If applicant withdraws or creditor denies application within the 3 BDay period, no Loan Estimate required If creditor later consummates the transaction on the terms originally applied for, out of compliance with the Loan Estimate delivery requirements If consumer amends application, deliver Loan Estimate within 3 BDays of receiving amended or resubmitted application 33 Estimated Information Creditors must act in good faith, exercising due diligence to obtain information required to complete the Loan Estimate. Creditors may normally rely upon other parties representations. If information is unknown (i.e., not reasonably available to the creditor at the time the LE is prepared), Creditor may use estimates. Designate estimated figures as estimates on the LE. (Comment 17(c)(2)(i) 2) New disclosures may be required under (c) or Loan Estimate page 17

18 Changed Circumstances New RESPA TILA Rule Extraordinary event beyond the control of any interested party or other unexpected event Information specific to the consumer applicant that was inaccurate or has changed New information Change requested by consumer Interest rate dependent charges at rate lock Expiration of a previously issued LE Old RESPA Rules Information particular to the borrower relied upon to create the GFE and changes or is found to be inaccurate later New information that was not relied upon in compiling the GFE Acts of God, war, disaster, or other emergency Other allowable changed circumstances 35 Circumstances Justifying Charge > Estimate Expressly permitted variations Unlimited variance Limited to 10% more than estimate Excess amount is below the allowable tolerance threshold Changed circumstances permitting a revised LE or a Closing Disclosure permitting the charge Creditors generally prohibited from revising estimates due to Technical errors Miscalculations Underestimations of charges 36 Loan Estimate page 18

19 Examples of Charges Allowed NO Increase Fees paid to the creditor Fees paid to a mortgage broker Fees paid to an affiliate of the creditor or a mortgage broker Fees paid to an unaffiliated third party, if the creditor required the service provider and did not allow the consumer to shop Transfer taxes. 37 Estimate Variance Limits 0 Tolerance: (e)(3)(i) An estimated closing cost disclosed is not in good faith if the charge paid by or imposed on the consumer exceeds the amount originally disclosed by any amount 10 % Aggregate Increase Limit: (e)(3)(ii) Limited increases permitted for certain charges No Limit on Increase: (e)(3)(iii) Variations permitted for certain charges 38 Loan Estimate page 19

20 Charges Without Regard to a Tolerance Limitation Creditors may charge >LE disclosed amount without tolerance limit: 1. Prepaid interest, property insurance premiums 2. Escrowed amounts 3. Serviced required by the creditor for which consumer may shop and the third party service provider is NOT on the creditor s written list of service providers 4. Services not required by the creditor paid to third parties (even creditor s affiliates) No regard to tolerance ONLY if credit did not purposefully under disclose the estimated costs 39 Charges Subject to a 10% Cumulative Tolerance An estimate for a third party service of a recording fee is in good faith if all three conditions are met: 1. The sum of the actual charges for third party services and recording fees does not exceed the category s estimated sum on the LE by more than 10%; 2. The charge for third party service is not paid to the creditor or an affiliate of the creditor; and 3. The creditor permits the consumer to shop for the third party service. 40 Loan Estimate page 20

21 Aggregate Increase Limit If an estimated service is not performed, the estimate for that charge should be removed from the category s total of estimated charges. May charge for a service that was not included on the LE so long as the sum of the category s charges is below the estimated category total. If the creditor does not include an estimated charge for a notary fee but a $10 notary fee is charged to the consumer, and the notary fee is subject to (e)(3)(ii), then the creditor complies if the sum of all amounts charged to the consumer does not exceed 110% of estimated costs, even though an individual notary fee was not included in the estimated disclosures provided. 41 Charges Subject to Zero Tolerance Creditors may not charge consumers more than disclosed on the LE under any circumstances other than changed circumstances for these items: Fees paid to (and retained by) the creditor, mortgage broker, or an affiliate of either; Fees paid to an unaffiliated third party if the creditor did not permit the consumer to shop for a third party service provider for a settlement service, or Transfer taxes. 42 Loan Estimate page 21

22 Cure for Excess Over Allowable Tolerances If amounts paid by consumer at closing exceed the LE disclosure tolerances, the creditor must refund the excess and provide a corrected disclosure reflecting the refund no later than 60 calendar days after consummation. For charges subject to zero tolerance, any amount charged beyond the LE disclosure amount must be refunded to the consumer. For charges subject to a 10% cumulative tolerance, the difference in the total category s sum compared to the disclosed estimated category s sum must be refunded to the consumer. 43 Loan Estimate Disclosure Delivery Deliver or place in the mail no later than on the third business day after receiving completed application Creditor responsible for ensuring LE s delivery complies with requirements for: Content Delivery Timing If LE not delivered in person, considered received by consumer 3 business days after it is delivered or placed in the mail 44 Loan Estimate page 22

23 Revised Loan Estimate: Six Exceptions 1. Changed circumstances altering settlement charges 2. Changed circumstances affecting eligibility (e.g., borrower s creditworthiness, value of the collateral) 3. Revisions requested by the consumer 4. Interest rate dependent charges 5. Consumer s intent to proceed after expiration of the LE disclosures 6. Delayed settlement on a construction loan (closing scheduled to occur >60 days after delivery of the estimated disclosures if consumer was alerted to this possibility when LE was provided) 45 Changed Circumstances Affecting Settlement Charges 1. An extraordinary event beyond the control of any interested party or other unexpected event specific to the member or transaction; 2. Information specific to the consumer or transaction that the creditor relied upon when providing the disclosures and that was inaccurate or subsequently changes; or 3. New information specific to the consumer or transaction that was not relied on when providing the disclosures. The new rule eliminates the existing 4th section of the definition which included other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problems. CFPB believes this is already covered by other elements of the definition and suggests that the overlap contributed to uncertainty surrounding what scenarios constitute a changed circumstance. 46 Loan Estimate page 23

24 Revised Loan Estimate (2.1.2) If AFTER Loan Estimate has been provided, a changed circumstance occurs: Creditor can revise the Loan Estimate If revising, must revise within 3 business days of learning of change A revised Loan Estimate generally can be provided no later than 7 business days BEFORE consummation (see section below) 47 Rounding (2.1.4) Dollar amounts must be rounded to nearest whole dollar where noted in the regulation ( (o)(4)). If an amount is required to be rounded but is composed of other amounts that are not required or permitted to be rounded, use the unrounded amounts in calculating the total and then round the final sum. Conversely, if amount is required to be rounded & is composed of rounded amounts, use rounded amounts in calculating the total (Comment 37(o)(4) 2). Percentage amounts may not be rounded and should be shown up to 2 or 3 decimals, as needed, except where noted in regulation ( (o)(4)(ii)). If percentage amount is a whole number, show the whole number with no decimals ( (o)(4)(ii)); Comment 37(o)(4)(ii) 1) 48 Loan Estimate page 24

25 Consummation (2.1.5) Look to State law for guidance! Consummation is not always the same thing as Closing or Settlement. Consummation occurs when consumer becomes contractually obligated to the creditor on the loan NOT when consumer becomes contractually obligated to seller on a real estate transaction ( (a)(13). Point when consumer becomes contractually obligated to creditor on the loan depends on applicable State law ( (a)(13); Comment 2(a)(13) 1. Verify when applicable State laws determine when consummation will occur and ensure delivery of the Loan Estimate within 3 business days of receipt of application. 49 Loan Estimate (2.2), Page 1 Page 1 of the Loan Estimate includes: General information, A Loan Terms table with descriptions of applicable information about the loan, A Projected Payments table, A Costs at Closing table, and A CFPB link for consumers to obtain more information about loans secured by real property. Page 1 includes a statement of Save this Loan Estimate to compare with your Closing Disclosure. Page 1 also includes the creditor s name and address. If there are multiple creditors, use only the name of the creditor completing the Loan Estimate. (Comment 37(a)(3) 1) If a mortgage broker is completing the Loan Estimate, use the name and address of the creditor if known. If not yet known, leave this space blank. (Comment 37(a)(3) 2) 50 Loan Estimate page 25

26 General Loan Information (2.2.1) Date Issued Applicants Property Sales Price Loan Term Purpose Product Loan Type Loan ID # Rate Lock Figure 2: General Information of the Loan Estimate 51 Loan Estimate: General Loan Information Date Issued: Date mailed or delivered to the consumer Applicants: Name and mailing address of the consumer(s) applying for the loan. Use name and mailing address for each if multiple applicants. An additional page may be added if the space provided is insufficient. 52 Loan Estimate page 26

27 Property Use the address, including zip code, that will secure transaction If address is unavailable, use description of location (lot number or property description) Personal property (i.e., furniture, appliances, etc.) may secure the credit transaction, but are not required to be included as Property An additional page may NOT be appended to Loan Estimate to disclose a description of personal property 53 Sale Price If loan is a purchase money mortgage, use Sale Price If seller s Sale Price is not yet known, use the estimated value of the property used as the basis for the LE disclosures If personal property is included in Sale Price of Property, use that combined Sale Price without any reduction for appraised or estimated value of personal property If loan is for a transaction without a seller (such as a refinance), use Appraised Value or Estimated Value If Creditor has obtained or estimated valuation by issuance of LE, use that Appraisal Value or Estimated Value 54 Loan Estimate page 27

28 Loan Term Loan Term is the term of the debt obligation Describe Loan Term as years when the Loan Term is in whole years For a Loan Term is more than 24 months but is not whole years, describe using years and months with the abbreviations yr. and mo. Example: Loan term of 185 months is disclosed as 15 yr., 5 mo. For a Loan Term of exactly 24 months, us 2 years For Loan Term less than 24 months and not whole years, use months only with abbreviation mo. Example: 6 mo. or 16 mo. 55 Purpose Describe the consumer s intended use for the loan Purpose is disclosed using one of four descriptions: 1. Purchase: Loan will be used to finance the acquisition of the identified Property 2. Refinance: Loan will be used to refinance an existing obligation that is secured by the Property (even if creditor is not holder or servicer of original obligation) 3. Construction: Loan will finance initial construction of a dwelling on property disclosed on Loan Estimate 4. Home Equity Loan: Loan will be used for any other purpose not listed in the categories above 56 Loan Estimate page 28

29 Product: Payment Feature & Rate Feature The description of the loan should contain these 2 pieces of information: Any payment feature that may change the periodic payment Negative Amortization: Principal balance of loan may increase due to the addition of accrued interest to the principal of the loan Interest Only: When one or more periodic payments may be applied only to interest accrued and not to principal of the loan Step Payment: When the scheduled variations in regular periodic payments amounts occur that are not caused by changes to interest rate during loan term Balloon Payment: When terms of legal obligation include a payment that is more than 2 times that of a regular periodic payment Seasonal Payment: When terms of the obligation expressly provide that regular periodic payments are not scheduled between specified unit periods on a regular basis (ex. teacher loan not requiring monthly payments during summer months) If a loan can be described with more than one description, only first applicable feature is disclosed. Ex: Loan with both Neg Amort and Balloon would only disclose Neg Amort 57 Product Rate Feature: Not a Fixed Rate Product Interest rate applied Adjustable Rate: Interest rate may increase after consummation, but rates that will apply or the periods for which they apply are not known at consummation Description must be preceded by duration of any introductory rate or payment period, and the first adjustment period, as applicable When no introductory period for an adjustable rate, disclose 0 Step Rate: Interest rate will change after consummation and the rates that apply and the periods for which they apply are known at consummation Description must be preceded by duration of any introductory rate or payment period, and the first adjustment period, as applicable When no introductory rate for a Step Rate, disclose 0 and then the applicable time period until the first adjustment 58 Loan Estimate page 29

30 Product Rate Feature: Fixed Rate Product Fixed Rate: Interest rate is not an Adjustable Rate or Step Rate Examples: Year 7 Balloon Payment, 3/1 Step Rate: A step rate with an introductory interest rate that lasts for 3 years and adjusts each year thereafter until a balloon payment is due in the 7 th year of the loan 2 Year Negative Amortization: A fixed rate produce with a step payment feature for the first 2 years of the obligation that may negatively amortize 2.58/1 Adjustable Rate: An adjustable rate product with an introductory interest rate for 31 months that adjusts every year thereafter (2 years and 7 months, where 7/12=0.58 and stated as 2.58) 18 mo./18 m0. Adjustable Rate: An adjustable rate product with an introductory interest rate for 18 months that adjusts every 18 months thereafter 59 Loan Type Loan Type is the type of loan from these 4 categories: Conventional: Not guaranteed or insured by Federal or State government agency FHA: Loan is insured by the Federal Housing Administration VA: Loan is guaranteed by the U.S. Department of Veterans Affairs Other: Describe if loan is insured or guaranteed by another Federal or State agency 60 Loan Estimate page 30

31 Loan ID# The creditor s loan identification number that may be used by a creditor, consumer and other parties to identify the transaction May contain alpha numeric characters and must be unique to the particular transaction Same Loan ID# may not be used for different, but related, loan transactions (such as different loans to same borrower) When a revised Loan Estimate is issued, the Loan ID# must be sufficient to identify the transaction associated with the initial Loan Estimate 61 Rate Lock Indicate rate is locked with Yes, indicate rate is not locked with No When interest rate is locked at time of Loan Estimate s delivery, the date and time (including applicable time zone) when lock period ends must be disclosed Date and time (including time zone) at which estimated closing costs expire must be disclosed on every Loan Estimate (see bold below) Before closing, your interest rate, points, and lender credits can change unless you lock the interest rate. All other estimated closing costs expire on xx/xx/2014 at 5:00 p.m. EDT 62 Loan Estimate page 31

32 Estimated Closing Costs Expiration Date 63 US Time Zones Eastern Standard Time (EST) [GMT 5] Central Standard Time (CST) [GMT 6] Mountain Standard Time (MST) [GMT 7] Pacific Standard Time (PST) [GMT 8] Alaskan Time (AKST) [GMT 9] Hawaiian Aleutian Time (HAST) [GMT 10] Atlantic Time Zone (AST)[GMT 4) Samoa Standard Time (SST)[GMT 11] Chamorro Standard Time (CHST)[GMT+10] GMT = Greewich Mean Time (a.k.a. Zulu Time). Arizona, Puerto Rico, Hawaii, U.S. Virgin Islands and American Samoa do not observe Daylight Saving Time. Samoa standard time (UTC 11) and Chamorro Standard Time (UTC+10) 64 Loan Estimate page 32

33 Chamorro Time Zone Samoa Time Zone 65 Atlantic Time Zone (AST) Puerto Rico and the USVI The U.S. Virgin Islands (USVI) consist of the main islands of Saint Croix, Saint John, and Saint Thomas. USVI also includes with the much smaller but historically distinct Water Island and many other surrounding minor islands. 66 Loan Estimate page 33

34 Loan Terms (2.2.2) Figure 3: Loan Terms Table of the Loan Estimate Disclose in the Loan Terms table: Loan Amount (if the amount is in whole dollars, do not disclose cents) ( (o)(4)), Initial Interest Rate, Initial Monthly Principal & Interest amount, Any adjustments to these amounts after consummation, Whether the loan includes a Prepayment Penalty, and Whether the loan includes a Balloon Payment. ( (b)) 67 Interest Rate and Monthly Principal & Interest If interest rate is not known at consummation, the fully indexed rate is disclosed (fully indexed rate is the interest rate calculated using the index value and margin at the time of consummation Initial principal and interest payment amount also would be calculated using the same fullyindexed rate 68 Loan Estimate page 34

35 Adjustable Rate Mortgage Example 69 Fixed Rate Loan Example 70 Loan Estimate page 35

36 Adjustment to Loan Amount, Interest Rate and Monthly P&I after Consummation If Loan Amount, Interest Rate or Monthly P&I can increase after consummation, disclose Yes where applicable with information pertinent to adjustment after consummation Loan Amount Adjustment: Creditor must disclose maximum principal balance for transaction and due date (expressed as the year or month in which it occurs, rather than an exact date) of the last payment that may cause principal balance to increase, together with a statement whether the maximum principal balance may or will occur under the terms of the obligation. The date disclosed is the year in which the event occurs, counting from the due date of the initial periodic payment. Interest Rate Adjustment: Disclose frequency of interest rate adjustments, date when interest rate may first adjust, maximum interest rate and first date when interest rate can reach maximum interest rate. Date disclosed is year in which event occurs, counting from date that interest for the first scheduled periodic payment begins to accrue after consummation. 71 Adjustment to Loan Amount, Interest Rate and Monthly P&I after Consummation, cont. Monthly Principal and Interest Adjustment: Disclose the scheduled frequency of adjustments, due date of the first adjustment and maximum possible amount (and earliest date it can occur) of the monthly principal and interest. In addition, if there is a period during which only interest is required to be paid, also disclose with due date of last periodic payment. Date disclosed is year event occurs, counting from due date of initial payment Disclose & reference Adjustable Payment (AP) Table When Loan Amount, Interest Rate or Monthly P&I cannot increase after consummation, disclose No where applicable 72 Loan Estimate page 36

37 Prepayment Penalty & Balloon Payment Prepayment Penalty: Charge imposed for paying all or part of a transaction s principal before due date of principal. Not including a waived third party charge that creditor imposes if consumer prepays loan s entire principal sooner than 36 months after closing Disclose maximum amount of Prepayment Penalty & date prepayment penalty terminates Balloon Payment: Payment that is more than 2 times a regular periodic payment 73 Prepayment Penalty & Balloon Payment, cont. Under subheading: Does the loan have these features? when loan has Prepayment Penalty or Balloon Payment disclose Yes, as applicable. When answer is Yes to either, also disclose as applicable: Max amount of Prepayment Penalty and date when period may be imposed terminates: Example: As high as $3,240 if loan is paid off in first 2 years Max amount of Balloon Payment and due date of such payment. Example: You will pay $149,263 at the end of year 7 74 Loan Estimate page 37

38 Projected Payments (2.2.3) The Projected Payments table shows estimates of the periodic payments that the consumer will make over the life of the loan. Creditors must disclose estimates of the following periodic payment amounts in the Projected Payments table: Principal & Interest; Mortgage Insurance; Estimated Escrow; Estimated Total Monthly Payment; and Estimated Taxes, Insurance, & Assessments, even if not paid with escrow funds. The Projected Payments table also describes whether taxes, insurance, and other assessments will be paid with funds in the consumer s escrow account. ( (c)(2)) Figure 4: Projected Payments Table of the Loan Estimate 75 Periodic Payments Initial: To calculate initial Periodic Payment, use interest rate that will apply at closing, including any initial discounted or premium interest rate. If interest rate at closing is not known, such as an adjustable rate loan without introductory fixed rate period, use fully indexed rate to determine initial Periodic Payment Subsequent: P&I amount or range may change due to: Negative Amortization: P&I may change when negative amortization period ends Interest Only: P&I may change when interest only period ends Minor Periodic Payment: Variations due to months having a different number of days are not triggering events There is a scheduled Balloon Payment 76 Loan Estimate page 38

39 Subsequent Periodic Payments, cont. Lender must automatically terminate Mortgage Insurance or any functional equivalent Even if borrower may cancel insurance earlier, use date on which lender must automatically terminate Mortgage Insurance coverage under applicable law Only termination of Mortgage Insurance is a triggering event, while a decline in Mortgage Insurance premiums is not When Periodic Payment amount changes more than once in a single year, show in subsequent column the Periodic Payment amounts in the year following the one in which there were multiple changes 77 Homeowners Protection Act (HOPA) Private Mortgage Insurance (PMI) PMI is insurance that protects lenders from the risk of default and foreclosure. PMI allows prospective buyers who cannot, or choose not to, provide significant down payments to obtain affordable mortgage financing. Mortgage insurance programs other than mortgage insurance available under the National Housing Act or provided by Rural Development Association or Veterans Administration and are usually abbreviated as MIP 78 Loan Estimate page 39

40 HOPA: Critical PMI Events Origination Cancellation Automatic Termination Final Termination Little to no customer down payment >80% LTV Customer requested 80% LTV Mortgage or Servicer responsibility 78% LTV 77% LTV for Hi Risk Mtgs When neither of other two events have occurred Mid point of amortization Hi Risk loans for these purposes are Jumbo Loans. 79 HOPA: Three Critical Post Closing PMI Events Cancellation: At borrower s request when LTV is down to 80% based on original or appraised value of property Automatic Termination: Mortgage lenders or servicers must automatically cancel PMI coverage on current loans once the mortgage LTV is down to 78% (or at 77% for high risk loans) Final Termination: If PMI has not been canceled or otherwise terminated, coverage must be removed when the loan reaches the midpoint of amortization period. For example, a 30 year loan with 360 monthly payments, the chronological midpoint would occur after 180 payments. 80 Loan Estimate page 40

41 TILA RESPA Rule Subsequent Periodic Payments, cont. Lender must automatically terminate Mortgage Insurance or any functional equivalent Even if borrower may cancel insurance earlier, use date on which lender must automatically terminate Mortgage Insurance coverage under applicable law Only termination of Mortgage Insurance is a triggering event, while a decline in Mortgage Insurance premiums is not When Periodic Payment amount changes more than once in a single year, show in subsequent column the Periodic Payment amounts in the year following the one in which there were multiple changes 81 Number of Columns Maximum number of columns Periodic Payments table may contain is 4. If loan has more than 4 triggering events, show a range of payments in the 4 th column that reflects all remaining periodic payments not shown in the first three columns. EXCEPT: Final Balloon Payment: Always requires its own column If disclosing final Balloon Payment triggers other events that will not fit within the 4 column max, show the other events as a range of payments in the 3rd column Non Final Balloon Payment: Does not necessarily require its own column Automatic Termination of Mortgage Insurance: Generally requires corresponding periodic payment to be shown in its own column, unless it exceeds 4 column max Where auto termination need not be shown in its own column, the column showing the next periodic payment or range of payments should show the periodic payment without Mortgage Insurance 82 Loan Estimate page 41

42 Number of Columns Show a range of payments rather than a single payment when: Triggering events exceed 4 columns and one column must be used to show two or more periodic payment amounts More than one triggering event occurs in a single year or one event occurs in the same year as the initial periodic payment P&I payment may adjust based on an interest rate index and the rates are not yet known For a column that contains a range of payments, show both minimum & maximum payment using rounded dollar amounts. For an Adjustable Rate loan, use max & min interest rates that could apply Ranges of payments are required for only P&I amount and the Estimated Total Monthly Payment. Do not show range of payments for Mortgage Insurance or Estimated Escrow. 83 Projected Payments Example 84 Loan Estimate page 42

43 Payment Calculation Column Headings (2.2.3.A) To right of Payment Calculation label, as column headings, use years of loan during which payments or ranges of payments shown will apply Use a sequence of whole years, counting from due date of initial Periodic Payment Example: A two column projected payments table might contain headings years 1 7 and years 8 30 if a triggering event occurs 85 months after the due date of the initial Periodic Payment. If triggering event occurs in middle of a year, use the next year in sequence as the heading for the subsequent column Example: Assume 30 year loan that requires Interest Only payments for first 54 months from due date of initial Periodic Payment. Column heading for initial Periodic Payment would be years 1 5 and column heading for subsequent Periodic Payment would be years 6 30 because triggering event occurs during the 5 th year of loan 85 Payment Calculation Column Headings (2.2.3.A), cont. For Periodic Payments that may increase based on adjustment of interest rate, use maximum loan term possible under terms of legal obligation. To calculate maximum loan term, assume interest rate rises as rapidly as possible under terms of legal obligation, taking into account any applicable interest rate caps For Balloon Payment scheduled as final payment, use Final Payment as column heading 86 Loan Estimate page 43

44 Principal & Interest (2.2.3.B) Use amount due for P&I for period shown in column heading. If payment or range of payments includes any payments of Interest Only, use phrase Only Interest under amount of payment or range of payments 87 Adjustable Rate Loans Generally calculate P&I using max payments by assuming interest rate will rise as rapidly as possible, taking into account terms of legal obligation, including any applicable caps on interest rate adjustments and lifetime interest rate cap Other laws, such as State usury law, can set max rate if legal obligation does not include a lifetime interest rate cap Calculate min payments by assuming interest rate will decrease as rapidly as possible, taking into account any introductory rates, caps on interest rate adjustments and lifetime interest rate floor For an Adjustable Rate loan based on an index that has no lifetime interest rate floor, the min interest rate is equal to the margin 88 Loan Estimate page 44

45 ARM Loan Estimate, Page 1 89 AP & AIR Tables on Loan Estimate Page 2 90 Loan Estimate page 45

46 Adjustable Rate Loans, cont. For loans with Negative Amortization feature, calculate P&I using max payment amounts after end of period during which principal balance may increase by assuming max principal amount permitted under terms of legal obligation at end of period. Calculate minimum payment amount by assuming interest rate is min possible under terms of legal obligation For loans with Balloon Payment feature that may change depending on previous interest rate adjustments, calculate P&I using assumptions for min and max interest rates described above and show as range of payments 91 Negative Amortization Example 92 Loan Estimate page 46

47 Mortgage Insurance (2.2.3.C) Disclose max amount payable as Mortgage Insurance that corresponds to the P&I payment shown in same column, Disclose as a rounded number Mortgage Insurance includes any mortgage guarantee that provides coverage similar to mortgage insurance (such VA or USDA guarantee) even if not technically considered insurance under State or other applicable law Calculate Mortgage Insurance premiums based on principal balance that will exist after changes to interest rate and payment amounts per the note. Example: for Adjustable Rate transaction that has discounted interest rate during initial 5 year period, calculate Mortgage Insurance premiums using composite rate based on rate in effect during initial 5 year period and, thereafter, fully indexed rate, unless otherwise required by applicable law If Mortgage Insurance is not required, disclose 0 Disclose Mortgage Insurance amount that corresponds with P&I amount shown in same column, even if Mortgage Insurance is paid on different schedule than P&I 93 Estimated Escrow (2.2.3.D) Disclose amount consumer will pay into escrow account each month under terms of legal obligation Use rounded number If escrow account will not be established, disclose 0 Disclose if there will be an escrow account, but escrow account will be closed during time frame attributable to applicable Periodic Payment 94 Loan Estimate page 47

48 Estimated Total Monthly Payment (2.2.3.E) For each column, disclose sum of P&I, Mortgage Insurance and Estimated Escrow as Estimated Total Monthly Payment Amount is rounded if any of component amounts are rounded 95 Estimated Taxes, Insurance & Assessments (2.2.3.F) As Estimated Taxes, Insurance & Assessments, disclose total monthly amount due for Property Taxes, Homeowner s Insurance, charges imposed by cooperative, condo or homeowners association; ground rent leasehold payments; and certain insurance premiums or charges if required by lender Disclose Estimated Taxes, Insurance & Assessments as rounded number Homeowner s Insurance is any insurance against loss or damage, or against liability arising out of the property Insurance premiums included as Estimated Taxes, Insurance & Assessments are for credit life, accident, health, or loss of income; insurance against loss of damage to property, or against liability arising out of ownership or use of property; and debt cancellation or debt suspension coverage 96 Loan Estimate page 48

49 Estimated Taxes, Insurance & Assessments (2.2.3.F), cont. To calculate Property Taxes, Homeowner s Insurance, and other insurance premiums, use taxable assessed value of real property securing transaction after consummation, including value of any improvements or construction, to extent known, and replacement costs of property over first year Include these amounts as Estimated Taxes, Insurance & Assessments even if an escrow account will not be established under terms of legal obligation By use of checkboxes, disclose if Property Taxes, Homeowner s Insurance, or Other required charges will be paid from escrow account established under terms of legal obligation under heading This estimate includes. When applicable, describe briefly type of charge to right of word Other. If there is more than one Other charge, disclose one type and the phrase and additional charges 97 Estimated Taxes, Insurance & Assessments (2.2.3.F) Under heading of In Escrow?: Disclose Yes when an escrow account will be established that will pay the item; or Disclose No when escrow account will not be established under terms of legal obligation for Property Taxes, Homeowner s Insurance, and Other. If more than 1 disclosed as Other, disclose Yes, Some when 1 is included and other isn t 98 Loan Estimate page 49

50 Costs at Closing (2.2.4) Figure 5: Costs at Closing Table of the Loan Estimate The Costs at Closing table shows: Estimated Closing Costs are calculated in the same manner as the Total Closing Costs disclosed on page 2 of the Loan Estimate. (See section below) The Total Closing Costs are also itemized to show from page 2 of the Loan Estimate: The total of the Loan Costs table, The total of the Other Costs table, and Lender Credits in the Total Closing Costs subheading. ( (d)(1)(i)) The estimated amount of cash the consumer will be expected to pay at closing is also shown as Estimated Cash to Close. This amount is the same as the Estimated Cash to Close, from the Calculating Cash to Close table on page 2 of the Loan Estimate. ( (d)(1)(ii)) 99 Alternative Costs at Closing Figure 6: Alternative Costs at Closing Table of the Loan Estimate For transactions without a seller, an Alternative Costs at Closing table together with an Alternative Calculating Cash to Close table on page 2 of the Loan Estimate can be used in place of the Costs at Closing table shown. ( (d)(2)) The Alternative Costs at Closing table contains a variation that places checkboxes with Estimated Cash to Close in order to indicate whether the cash is due from or to the consumer. (Comment 37(d)(2) 2) If the Alternative Costs at Closing table is used, then the Alternative Calculating Cash to Close on page 2 of the Loan Estimate also must be used. (Comment 37(d)(2) 1) 100 Loan Estimate page 50

51 Loan Estimate (2.3) Page 2 Up to four main categories of costs 1. A good faith itemization of the Loan Costs and Other Costs. ( (f) and (g)) 2. A Calculating Cash to Close table that shows how the amount of cash needed at closing is calculated. ( (h)) Optional: 3. For transactions with adjustable monthly payments, an Adjustable Payments (AP) Table with relevant information about how the monthly payments will change. ( (i)) 4. For transactions with adjustable interest rates, an Adjustable Interest Rate (AIR) Table with relevant information about how the interest rate will change. ( (j)) Loan Costs are those paid by the consumer to the creditor and third party providers of services the creditor requires to be obtained during the origination of the loan. ( (f)) Other Costs include taxes, governmental recording fees, and certain other payments involved in the real estate closing process. ( (g)) 101 Loan Costs (2.3.1) Loan Costs are disclosed in three subheadings, each of which is subtotaled: Origination Charges, Services You Cannot Shop For, and Services You Can Shop for Disclose the sum of these three subtotals as Total Loan Costs. ( (f)) 102 Loan Estimate page 51

52 Origination Charges Figure 9: Origination Charges Table of the Loan Estimate Origination Charges are items the consumer will pay to each creditor and loan originator for originating and extending credit. First, include amount paid, if any, by consumer to creditor to reduce the interest rate (sometimes referred to as points ) as both a percentage of the loan amount and a dollar amount. If no points are charged, then leave blank both the percentage of points stated in the label and the dollar amount. (Comment 37(f)(1) 4) Any other items that the consumer will pay to the creditor and loan originator may also be disclosed, up to 13 individual items. ( (f)(1)(ii)) If there are more than 13 Origination Charges, disclose the total amount of the items that exceed 12 as Additional Charges. ( (f)(6)(i)) Describe the items, other than for points paid, using terminology that clearly and conspicuously describes the service that is disclosed. (Comment 37(f)(1) 3) 103 Origination Charges, cont. The following items should be itemized separately in the Origination Charges subheading: Only compensation paid directly by a consumer to a loan originator that is not also the creditor; or Any charge imposed to pay for a loan level pricing adjustment (LLPA) assessed on the creditor that is passed on to the consumer as a cost at consummation and not as an adjustment to the interest rate. (Comment 37(f)(1) 5) Do not disclose compensation to a loan originator paid indirectly by a creditor through the interest rate on the Loan Estimate. (Comment 37(f)(1) 2) 104 Loan Estimate page 52

53 Loan Originator Compensation See (a) and associated commentary for a discussion of the meaning of loan originator in connection with limits on compensation in a consumer credit transaction secured by a dwelling. Direct loan originator compensation Only charges paid directly by the consumer to compensate a loan originator are included in the amounts listed under (f)(1). Compensation of a loan originator paid indirectly by the creditor through the interest rate is not itemized on the Loan Estimate. However, pursuant to (f)(1), such compensation is itemized on the Closing Disclosure required by (f). 105 Loan Originator (LO) (a) Loan originator" means a person who, in expectation of direct or indirect compensation or other monetary gain or for direct or indirect compensation or other monetary gain, performs any of the following activities: takes an application, offers, arranges, assists a consumer in obtaining or applying to obtain, negotiates, or otherwise obtains or makes an extension of consumer credit for another person; or through advertising or other means of communication represents to the public that such person can or will perform any of these activities. LO includes an employee, agent, or contractor of the creditor or LO organization if the employee, agent, or contractor meets this definition. LO includes a creditor that engages in LO activities if the creditor does not finance the transaction at consummation out of the creditor's own resources. (a.k.a. Table Funding) 106 Loan Estimate page 53

54 Services You CANNOT Shop For H 27(C) Mortgage Loan Transaction Sample Written List of Providers With Services You Cannot Shop for No more than 13! 107 Services You CANNOT Shop For Figure 10: Services You Can Not Shop For Table of the Loan Estimate Services You Cannot Shop For are items provided by persons other than the creditor or mortgage broker that the consumer cannot shop for and will pay for at settlement. ( (f)(2)) Items listed as Services You Cannot Shop For must use terminology that describes each item, and disclose them in alphabetical order. ( (f)(5)) 108 Loan Estimate page 54

55 Examples of Services You CANNOT Shop For Services You Cannot Shop For might include: Appraisal fee, Appraisal management company fee, Credit report fee, Flood determination fee, Government funding fee (such as a VA or USDA guarantee fee, or any other fee paid to a government entity as part of a governmental loan program), Homeowner s association certification fee, Lender s attorney fee, Tax status search fee, Third party subordination fee, Title lender s title insurance policy, and An upfront mortgage insurance fee (unless the fee is a prepayment of future premiums or a payment into an escrow account). (Comment 37(f)(2) 2) 109 Services You CANNOT Shop For Describe services related to the issuance of title insurance policies with the word Title at the beginning of the item. (Comment 37(f)(2) 3) Items that are required for the issuance of title insurance policies may include: Examination and evaluation of title evidence to determine insurability of the title and what items to include or exclude in title commitment and policy to be issued, Preparation and issuance of the title commitment or other document that discloses the status of title, identifies conditions that must be met before policy will be issued, and obligates insurer to issue a policy of title insurance if conditions are met, Resolution of title underwriting issues and taking steps needed to satisfy any conditions for the issuance of title insurance policies, Preparation and issuance of the title insurance policies, and Payment of premiums for any lender s title insurance coverage. (Comment 37(f)(2) 3) 110 Loan Estimate page 55

56 Services You CANNOT Shop For The amount of the premium for the lender s title insurance coverage must be disclosed without any adjustment to the premium that might be made for the simultaneous purchase of an owner s title insurance policy. (Comment 37(f)(2) 4) Disclose no more than 13 Services You Cannot Shop For. ( (f)(2)(ii)) If there are more than 13, disclose the total amount of the items that exceed 12 with the label Additional Charges. An addendum to the Loan Estimate cannot be used to disclose the additional items. ( (f)(6)(i)) 111 Services You CAN Shop For No more than 14! 112 Loan Estimate page 56

57 Services You CAN Shop For Figure 11: Services You Can Shop For Table of the Loan Estimate Services You Can Shop For are provided by persons other than the creditor or mortgage broker and are services that the consumer can shop for and will pay for at settlement. ( (f)(3)) Items listed as Services You Can Shop For must use terminology that describes each item and disclose them in alphabetical order. ( (f)(5)) A creditor permits a consumer to shop for an item if the creditor permits the consumer to select the provider of that item, subject to reasonable requirements (such as appropriate licensing of the provider). ( (e)(1)(vi)(A); Comment 19(e)(1)(vi) 1) 113 Services You CAN Shop For Services You Can Shop For might include: Pest inspection fee, Survey fee, Title closing agent fee, and Title closing protection letter fee. (Comment 37(f)(3) 2) Describe services related to the issuance of title insurance policies with the word Title at the beginning of the item. (Comment 37(f)(2) 3) Items that are required for the issuance of title insurance policies may include: Examination and evaluation of title evidence to determine insurability of the title being examined and what items to include or exclude in title commitment and policy to be issued. Preparation and issuance of the title commitment or other document that discloses the status of title, identifies the conditions that must be met before the policy will be issued, and obligates the insurer to issue a policy of title insurance if such conditions are met. 114 Loan Estimate page 57

58 Services You CAN Shop For [continued from previous page] Items that are required for issuance of title insurance policies may include (continued): Resolution of title underwriting issues and taking steps needed to satisfy any conditions for the issuance of title insurance policies, Preparation and issuance of the title insurance policies, and Payment of premiums for any lender s title insurance coverage. (Comment 37(f)(3) 3) The creditor must disclose premium amount for the lender s title insurance coverage without any adjustment to the premium that might be made for the simultaneous purchase of an owner s title insurance policy. (Comment 37(f)(3) 3) Disclose no more than 14 Services You Can Shop For. ( (f)(3)(ii)) If there are more than 14 Services You Can Shop For, disclose the total amount of the items that exceed 13 with the label Additional Charges. ( (f)(6)(ii)(B)) An addendum to the Loan Estimate can be used to disclose the additional items. ( (f)(6)(ii)) 115 Sample Service Provider List 116 Loan Estimate page 58

59 Total Loan Costs Total Loan Costs is the sum of the subtotals of Figure 12: Total Loan Costs Table of the Loan Estimate A. Origination Charges, B. Services You Cannot Shop For, and C. Services You Can Shop For. ( (f)(4)) 117 Other Costs (2.3.2) Disclose Other Costs under four subheadings, each of which is subtotaled: E. Taxes and Other Government Fees, F. Prepaids, G. Initial Escrow Payment at Closing, and H. Other. Total Other Costs is the sum of these four subtotals. ( (g)(5)) Figure 13: Other Costs Table of the Loan Estimate 118 Loan Estimate page 59

60 Other Costs, cont. Other Costs are established by government action, determined by standard calculations applied to ongoing fixed costs, or based on an obligation incurred by the consumer independently of any requirement imposed by the creditor. (Comment 37(g) 1) Other items that are required to be paid at or before closing pursuant to the contract for sale between the consumer and a seller are disclosed on the Loan Estimate to the extent of the creditor s knowledge when disclosing. (Comment 37(g) 2) Other Costs must be disclosed in order listed in the regulation, with any additional items listed in alphabetical order in subsequent lines of the subheading. ( (g)(7)) An addendum to the Loan Estimate cannot be used for additional items on the Other Costs table. If all of the charges cannot be itemized in the number of lines provided in a subheading of the Other Costs table, the total of those items that exceed the number permitted are disclosed with the label Additional Charges on the last line of that subheading. ( (g)(8)) 119 Taxes and Other Government Fees Under Taxes and Other Government Fees, disclose Recording Fees and Other Taxes first and Transfer Taxes second. ( (g)(1)) Recording Fees and Other Taxes are fees assessed by a government authority to record and index loan and title documents as required under State or local law, including charges or fees imposed by a State or local government that are not Transfer Taxes. (Comment 37(g)(1) 1 and 2) Figure 14: Taxes and Other Government Fees Table of the Loan Estimate Recording Fees and Other Taxes do not include fees that are based on the Sale Price of the Property or Loan Amount. For example, a fee for recording a subordination that is $20, plus $3 for each page over three pages, is included as Recording Fees and Other Taxes; but a fee of $1,250 based on 0.5% of the Loan Amount is included as Transfer Taxes, and not included as Recording Fees and Other Taxes. (Comment 37(g)(1) 1) 120 Loan Estimate page 60

61 Taxes and Other Government Fees, cont. Transfer Taxes are State and local government fees on mortgages and home sales that are based on the Loan Amount or Sale Price of the Property. The name used under State or local law is not determinative of whether they are disclosed as Transfer Taxes on the Loan Estimate. (Comment 37(g)(1) 3) Disclose only Transfer Taxes paid by the consumer on the Loan Estimate. Whether the consumer pays the transfer tax is based on applicable State or local law. For example: If a State law indicates a lien can attach to the consumer s acquired property if the charge is not paid, the amount is included as part of Transfer Taxes; If State or local law is unclear or does not specifically attribute the amount to the seller or consumer, disclose the amount apportioned to the consumer using common practice in the locality of the property. (Comment 38(g)(1) 4) Transfer taxes to be paid by the seller are not disclosed on the Loan Estimate as Transfer Taxes. (Comment 38(g)(1) 5) 121 Taxes and Other Government Fees The amount of Transfer Taxes disclosed could be modified to the extent the creditor has knowledge of the sale contract s allocation of transfer taxes between the consumer and a seller when it issues the LE. (Comment 37(g) 2) If creditor does not have the sale contract when it issues the LE, the creditor must use the allocation of transfer taxes provided for by State or local law, or common practice when State or local law is unclear. (Comment 37(g)(1) 4) Disclose the sum of all transfer taxes paid by the consumer as Transfer Taxes. ( (g)(1)(ii)) No additional items may be listed or deleted in the Taxes and Other Government Fees category. (Comment 37(g)(1) 6) 122 Loan Estimate page 61

62 Prepaids Prepaids are items to be paid by the consumer in advance of the first scheduled payment of the loan. ( (g)(2)) Prepaids are: Homeowner s Insurance Premium, Mortgage Insurance Premium, Prepaid Interest, Property Taxes, and A maximum of three additional items. Figure 15: Prepaids Table of the Loan Estimate Each item must include the applicable time period covered by the amount to be paid by the consumer and the total amount to be paid. ( (g)(2)(i) (iv)) 123 Initial Escrow Payment at Closing Figure 16: Initial Escrow Payment at Closing Table of the Loan Estimate Initial Escrow Payment at Closing includes items that the consumer will be expected to place into an escrow account at consummation to be applied to recurring periodic payments. ( (g)(3)) Initial Escrow Payment at Closing includes: Homeowner s Insurance, Mortgage Insurance, Property Taxes, and A maximum of five other items. Disclose the amount escrowed per month for each item, the number of months collected at consummation and the total amount paid. ( (g)(3)(i), (ii), (iii), (v)) 124 Loan Estimate page 62

63 Other Figure 17: Other Table of the Loan Estimate Other includes items in connection with the transaction that the consumer is likely to pay or has contracted with a person other than the creditor or loan originator to pay at closing and of which the creditor is aware at the time of issuing the Loan Estimate. ( (g)(4)) Separate insurance, warranty, guarantee or event coverage products include, for example: Owner s title insurance, Credit life insurance, Debt suspension coverage, Debt cancellation coverage, Warranties of home appliances and systems, and Similar products. 125 Other, cont. These items are disclosed when coverage is written in connection with a mortgage. These examples would not include additional coverage and endorsements on insurance otherwise required by the creditor. (Comment 37(g)(4) 3) Items that disclose any premiums paid for separate insurance, warranty, guarantee, or eventcoverage products not required by the creditor must include the parenthetical description (optional) at the end of the label. ( (g)(4)(ii)) Describe services related to issuance of title insurance policies with the word Title at the beginning of the item. When the owner s title insurance premium includes a simultaneous issuance premium, the premium is calculated by taking the full owner s title insurance premium, adding the simultaneous issuance premium for the lender s coverage (if any), and then deducting the full premium for lender s coverage. (Comment 37(g)(4) 2) 126 Loan Estimate page 63

64 Other, cont. A maximum of 5 items can be disclosed as Other. ( (g)(4)(iii)) Must be listed in the order prescribed, with any additional items to follow. All additional items must be listed in alphabetical order under the applicable subheading When the creditor is aware of those items, Other includes for example: Commissions of real estate brokers or agents, Additional payments to seller to purchase personal property per the sale contract that were not included in a flat sale price, Homeowner s association and condominium charges associated with the transfer of ownership, and Fees for inspections not required by the creditor but paid by the consumer per the sale contract. (Comment 37(g)(4) 4) These must be listed in this specific order: Taxes and Other Government Fees Recording Fees and Other Taxes Transfer Taxes Prepaids Homeowner s Insurance Premium Mortgage Insurance Premium Prepaid Interest Property Taxes Initial Escrow Payment at Closing Homeowner s Insurance Mortgage Insurance Property Taxes 127 Total Closing Costs Figure 18: Total Closing Costs Table of the Loan Estimate Total Closing Costs are the sum of Total Loan Costs (shown in Figure 8), Total Other Costs, and Lender Credits. ( (g)(6)) Lender Credits are the amount of any payments from the creditor to the consumer that do not pay for a particular fee on the Loan Estimate and is disclosed as a negative number. (Comment 37(g)(6)(ii) 1) For loans where all or a portion of closing costs are offset by a credit or rebate provided by the creditor (referred to as no cost loans), disclose such credit or rebate as Lender Credits. Creditor should ensure amount of Lender Credits is sufficient to cover estimated items the creditor represented to consumer as not being paid by the consumer at consummation, regardless of whether such representations was itemized. (Comment 37(g)(6)(ii) 2) 128 Loan Estimate page 64

65 Calculating Cash to Close (2.3.3) Figure 19: Calculating Cash to Close Table of the Loan Estimate Total Closing Costs are the same amount disclosed as Total Closing Costs in Other Costs table (see sect above). Disclose as a positive number. ( (h)(1)(i)) Note: CFPB s Forms Guide uses Paid From Your instead of Included in Loan Amount. 129 Cash to Close: Closing Costs Financed LE Loan Amount (from page 1) = Less: Total Amount of Payments to 3 rd Parties not otherwise disclosed in Loan Costs & Other Costs Closing Costs Financed (Included in Loan Amount) Figure 19: Calculating Cash to Close Table of the Loan Estimate If result of the calculation is a positive number, Closing Costs Financed (Included in Loan Amount) is that amount, disclosed as a negative number, but only to the extent it does not exceed amount of Lender Credits. If the result of the calculation is zero or negative, then Closing Costs Financed (Included in Loan Amount) is $0. (Comment 37(h)(1)(ii) 1) Note: CFPB s Forms Guide uses Paid From Your instead of Included in Loan Amount. 130 Loan Estimate page 65

66 Cash to Close: Down Payment/Funds from Borrower Purchase transaction, Down Payment/Funds from Borrower is the difference between the purchase price of the property and the principal amount of the loan, disclosed as a positive number. ( (h)(1)(iii)(A)) When the loan amount exceeds the purchase price of the property, disclose $0 as Down Payment/Funds from Borrower. (Comment 37(h)(1)(iii) 1) In all other transactions, subtract the principal amount of credit extended (excluding any amount disclosed as Closing Costs Financed (Paid from Your Loan Amount)) from the total amount of all existing debt being satisfied in the transaction. When this calculation yields an amount that is positive, Down Payment/ Funds from Borrower is that amount. If the calculation yields a result that is negative or $0, Down Payment/ Funds from Borrower is $0. ( (h)(1) (iii)(b)) 131 Cash to Close: Deposit Purchase transaction, Deposit is the amount, disclosed as a negative number, paid to the seller or held in trust or escrow by an attorney or other party under the terms of the contract for sale of the property. ( (h)(1)(iv)(A)) In all other transactions, Deposit is $0. ( (h)(1)(iv)(B)) Figure 19: Calculating Cash to Close Table of the Loan Estimate 132 Loan Estimate page 66

67 Cash to Close: Funds for Borrower Purchase transaction, Funds for Borrower is $0. (Comment 37(h)(1)(v) 1) All other transactions, subtract the principal amount of debt extended (excluding any amount disclosed as Closing Costs Financed (Paid from Your Loan Amount)) from the total amount of all existing debt being satisfied in the transaction. When this calculation yields an amount that is negative, then Funds for Borrower is that amount. If the calculation yields an amount that is positive or $0, then Funds for Borrower is $0. ( (h)(1)(v)) Figure 19: Calculating Cash to Close Table of the Loan Estimate 133 Cash to Close: Seller Credits Seller Credits are the total amount that the seller will pay for items included in the Loan Costs and Other Costs tables, to the extent known, disclosed as a negative number. ( (h)(1)(vi)) Adjustments and Other Credits are the total amount of all items in the Loan Costs and Other Costs tables that are paid by persons other than the loan originator, creditor, consumer, or seller, together with any other amounts that are required to be paid by the consumer at closing pursuant to the contract of sale (if any), disclosed as a negative number. ( (h)(1)(vii)) Examples of items paid by persons other than loan originator, creditor, consumer, or seller: Gifts from family members, and Credits from a developer or home builder to be applied to items in the Loan Costs and Other Costs table. (Comment 37(h)(1)(vii) 1 and 2) 134 Loan Estimate page 67

68 Cash to Close: Adjustments and Other Credits Includes funds provided to the consumer from proceeds of subordinate financing, local or State housing assistance grants, or other similar sources. (Comment 37(h)(1)(vii) 5) Examples of amounts paid by the consumer at closing pursuant to the contract of sale include: Charges for personal property to be acquired by the consumer, Prorations for property taxes, and Prorations for homeowner s association dues. Adjustment and Other Credits is reduced by the amount of any such additional charges. (Comment 38(h)(1)(vii) 6) 135 Estimated Cash to Close Estimated Cash to Close is calculated as the sum of the seven other amounts disclosed in the Estimated Cash to Close table. ( (h)(1)(viii)) Figure 19: Calculating Cash to Close Table of the Loan Estimate 136 Loan Estimate page 68

69 Alternative Calculating Cash to Close Table Transactions Without a Seller (2.3.4) [Refinance] Figure 20: Alternative Calculating Cash to Close Table of the Loan Estimate This Alternative Calculating Cash to Close table would be used in place of the table in Figure 19. ( (h)(2)) A creditor that uses the optional Alternative Calculating Cash to Close table must also use the alternative disclosure provisions of the Alternative Costs at Closing table on Loan Estimate page 1. (Comment 37(h)(2) 1) The amount disclosed as Loan Amount is the same amount disclosed as Loan Amount on Loan Estimate page 1. ( (h)(2)(i)) 137 Alternative Calculating Cash to Close Total Closing Costs are the same amount as Total Closing Costs in the Other Costs table, disclosed as a negative number. ( (h)(2)(ii)) Estimated Payoffs and Payments are the total amount to be paid to third parties not otherwise disclosed as items in the Loan Costs or Other Costs tables, disclosed as a negative number. ( (h)(2)(iii)) Examples of the Payoffs and Payments to be made to third parties not otherwise disclosed in the Loan Costs or Other Costs tables can include: Payoffs of existing liens secured by the property such as mortgages, deeds of trust, judgments that have attached to the property, Mechanics and materialmans liens, Local, State, and Federal tax liens, Payments of unsecured outstanding debts of the consumer, and Payments to other third parties for outstanding debts of the consumer as required to be paid as a condition for the extension of credit. (Comment 37(h)(2)(iii) 1) 138 Loan Estimate page 69

70 Alternative Calculating Cash: Estimated Cash to Close The amount for the Estimated Cash to Close is the sum total of Loan Amount, Total Closing Costs, and Payoffs and Payments. ( (h)(2)(iv)) Check boxes disclose whether the Estimated Cash to Close is due from the consumer or will be paid to the consumer at consummation. (Comment 37(h)(2)(iv) 1) 139 Alternative Calculating Cash: Closing Costs Financed Closing Costs Financed is the sum of Loan Amount and Payoffs and Payments, but only to the extent the amount is greater than zero and less than or equal to the sum of Total Closing Costs. ( (h)(2)(v)) Examples: If the Loan Amount is $100,000, the Payoffs and Payments is $80,000, and the Total Closing Costs is $10,000; then the Closing Costs Financed would be $10,000. If the Loan Amount is $100,000, the Payoff and Payments is $95,000, and the Total Closing Costs is $10,000; then the Closing Costs Financed would be $5,000. If the Loan Amount is $100,000, the Payoffs and Payments is $110,000 and the Total Closing Costs is $10,000; then the Closing Costs Financed would be $ Loan Estimate page 70

71 Adjustable Payment (AP)Table (2.3.5) Figure 21: Adjustable Payment (AP) Table of the Loan Estimate The Adjustable Payment (AP) Table is disclosed when the periodic principal and interest payment may change after closing (not because of a change to the interest rate) or the loan is considered to be a Seasonal Payment product. ( (i)) If the loan does not contain these features, the AP Table is not disclosed. (Comment 37(i) 1) 141 Adjustable Payment (AP)Table (2.3.5) The AP Table includes the following info ( (i)): Whether there are Interest Only Payments, &, if so, the period during which the interest only payment would apply ( (i)(1)); Whether the amount of any periodic payment can be selected by consumer as an Optional Payment &, if so, the period during which the consumer can select optional payments ( (i)(2)); Figure 21: Adjustable Payment (AP) Table of the Loan Estimate 142 Loan Estimate page 71

72 Adjustable Payment (AP)Table Whether the loan is a Step Payment product and, if so, the period during which the regular periodic payments are scheduled to increase ( (i)(3)); Whether the loan is a Seasonal Payment product, and, if so, the period during which the periodic payments are not scheduled ( (i)(4)); A subheading of Monthly Principal and Interest Payments ( (i)(5)), that also lists: As First Change/Amount, the number of the payment that may change, counting from the first periodic payment due after consummation, and the amount or range of the periodic principal and interest payment for such payment ( (i)(5)(i)); The frequency of Subsequent Changes to the periodic payment ( (i)(5)(ii)); and The Maximum Payment that may be paid during the term of the loan with the number of the first periodic principal and interest payment that can reach such Maximum Payment amount. ( (i)(5)(iii)) 143 Adjustable Payment (AP)Table First Change/Amount If the exact payment number of the first payment adjustment is not known at the time of the Loan Estimate, the earliest possible payment that may change must be disclosed. (Comment 37(i)(5) 2) Monthly Principal and Interest Payments The label Monthly Principal and Interest Payments can be changed to reflect a payment schedule that is not monthly, such as Biweekly or Annual. (Comment 37(i)(5) 1) Disclose any scheduled periodic payment that only covers some or all of the interest that is due and not any principal as Monthly Principal and Interest Payments, even though the AP Table refers to Monthly Principal and Interest Payments. (Comment 37(i)(5) 5) 144 Loan Estimate page 72

73 Adjustable Interest Rate (AIR) Table (2.3.6) Figure 22: Adjustable Interest Rate (AIR) Table of the Loan Estimate The Adjustable Interest Rate (AIR) Table is disclosed when the loan s interest rate may increase after consummation. ( (j)) If the loan s interest rate will not increase after consummation, the AIR Table is not disclosed. (Comment 37(j) 1) 145 Adjustable Interest Rate (AIR) Table The AIR Table includes the following information ( (j)): Index + Margin, the index upon which adjustments to the interest rate will be based and the margin that is added to the index to determine the interest rate ( (j)(1)); Step Rate products, the maximum amount of any adjustments to the interest rate that are scheduled and pre determined ( (j)(2)); Initial Interest Rate at consummation ( (j)(3)); Minimum/Maximum Interest Rate for the loan, after any introductory period expires ( (j)(4)); Change Frequency ( (j)(5)): First Change, list the month when the first interest rate change may occur after consummation ( (j)(5)(i)); and Subsequent Changes, the frequency of interest rate adjustments after the initial adjustment ( (j)(5)(ii)); and As Limits on Interest Rate Changes ( (j)(6)): As First Change, the maximum possible change for the first adjustment of the interest rate after consummation ( (j)(6)(i)); and As Subsequent Changes, maximum possible change for subsequent adjustments of interest rate. ( (j)(6)(ii)) 146 Loan Estimate page 73

74 Adjustable Interest Rate (AIR) Table Index and Margin: The index must be described such that a consumer can reasonably identify it. For example, LIBOR may be used instead of the London Interbank Offered Rate. The margin should be disclosed as a percentage. For example, if the interest rate is calculated by adding 4.25 to LIBOR, the margin should be disclosed as 4.25%. (Comment 37(j)(1) 1) Maximum/Minimum Interest Rate: The maximum interest rate that applies to the loan under applicable law, such as State usury law, must be disclosed if the loan does not provide for a maximum interest rate. (Comment 37(j)(4) 2) The Minimum Interest Rate that applies to the loan under applicable law must be disclosed if the loan does not provide for a minimum interest rate. However, if applicable law does not set a minimum interest rate, disclose the amount of the margin as the minimum interest rate, margin as the minimum interest rate. (Comment 37(j)(4) 1) 147 Adjustable Interest Rate (AIR) Table Change Frequency: Typically, the first change month for the interest rate is scheduled in the terms of the loan, but if the exact month is not known at the time creditor provides the Loan Estimate, the earliest possible month for the first change to the interest rate of the loan must be disclosed based on the best information available to the creditor at the time the Loan Estimate is disclosed. (Comment 37(j)(5) 1) Limits on Interest Rate Changes: The greatest limit on changes in the interest rate must be disclosed when more than one limit applies to changes in the interest rate. For example, if the initial interest rate adjustment is capped at 2%, the second adjustment is capped at 2.5%, and all subsequent adjustments are capped at 3%, 3% is disclosed as Subsequent Changes. (Comment 37(j)(6) 1) 148 Loan Estimate page 74

75 Loan Estimate (2.4) Contact information, a Comparisons table, an Other Considerations table, and, if desired, a place for the consumer to sign to acknowledge receipt of the Loan Estimate are disclosed on page 3 of the Loan Estimate. Figure 23: Loan Estimate (Page 3) 149 Contact Information (2.4.1) Disclose the Name and NMLS/ License ID number for the creditor and mortgage broker, if any, and the individual loan officer of both. Also, disclose the and/or Phone number of the individual loan officer. The person identified as the individual loan officer must be the primary contact for the consumer. ( (k)) Figure 24: Contact Information Table of the Loan Estimate 150 Loan Estimate page 75

76 Comparisons (2.4.2) The Comparisons table discloses information related to the costs of the loan In Five Years, the Annual Percentage Rate (APR), and the Total Interest Percentage (TIP). In 5 Years includes the following information: The total amount the consumer will have paid in principal, interest, mortgage insurance, and loan costs paid through the end of the 60th month after the due date of the first periodic payment; and The amount of principal paid through the end of the 60th month after the due date of the first periodic payment. ( (l)(1)) Figure 25: Comparisons table of the Loan Estimate 151 Comparisons Annual Percentage Rate (APR) Disclose the APR, together with a brief descriptive statement, in the Comparisons table on page 3. For information on how to calculate the APR, see and appendix J to Regulation Z. ( (l)(2)) Total Interest Percentage (TIP) The TIP is the total amount of interest that the consumer will pay over the loan term, expressed as a percentage of the loan amount. ( (l)(3)) For example, if the Loan Amount is $100,000 and the total amount of interest that the consumer will pay over the Loan Term is $50,000, then the TIP is 50%. 152 Loan Estimate page 76

77 Other Considerations (2.4.3) Figure 26: Other Considerations Table Other Considerations includes following information: Appraisal; As Assumption, whether the subsequent purchaser of the property can assume the loan on its original terms; At the option of the creditor, a statement that Homeowner s Insurance is required and that the consumer may choose the provider; A statement detailing any amount that may be imposed for a Late Payment; A statement about the nature of a Refinance of the loan in the future; A statement whether the creditor intends to service the loan or transfer it to another servicer; and For Refinance transactions, a statement relating to State law protections against Liability After Foreclosure. ( (m)) 153 Appraisal A statement concerning the Appraisal must be provided for: Higher priced Mortgage Loans, and Loans covered by the Equal Credit Opportunity Act. ( (m)(1)) If the loan is a Higher priced Mortgage Loan, but is not covered by the Equal Credit Opportunity Act, the word promptly may be removed from the language provided on the model form. (Comment 37(m)(1) 1) 154 Loan Estimate page 77

78 Late Payment An increase in the interest rate triggered by a Late Payment is a charge for late payment. The following are not charges for Late Payment: The right of acceleration; Fees imposed for actual collection costs; Referral and extension charges; or Interest charged at the contract rate after the payment due date. (Comment 37(m)(4) 1) 155 Confirm Receipt (2.4.4) The consumer is not required to sign the Loan Estimate. The creditor may add a signature statement and have the consumer sign page 3 of the Loan Estimate in order to Confirm Receipt of the Loan Estimate by the consumer. If used by the creditor, the signature statement must contain the exact language from the model form. ( (n)(1)) If the Confirm Receipt table is not used by a creditor, a statement about Loan Acceptance must be included at end of Other Consideration table that states, You do not have to accept this loan because you have received this form or signed a loan application. ( (n)(2)) Figure 27: Confirm Receipt Table of the Loan Estimate 156 Loan Estimate page 78

79 Record Retention Creditor must retain evidence of compliance with new early disclosures (Loan Estimate) and the new final disclosures (except for the Closing Disclosure) for 3 years after the date of: Closing Date the disclosures are required, or Date action is required to be taken. Creditor must retain evidence that it performed the required actions as well as made the required disclosures. The Closing Disclosure, including the settlement information, must be retained for 5 years after settlement. Applied even if loan is sold, transferred or otherwise disposed of. This is a change from Reg X s current requirement which don t require record retention if creditor disposes their interest in a loan and does not service the mortgage loan. Future Rule possible requiring electronic record format. 157 State Law Preemption State laws are preempted by the rule to the extent of their inconsistencies with the new integrated disclosure forms. States, creditors, and other interested parties are permitted to request a determination by the CFPB regarding such inconsistencies. If the Bureau determines that a State required disclosure is inconsistent, creditors located in that State may not make disclosures using the inconsistent term or form, and will incur no liability under the State law for failure to use them unless the Bureau s determination is subsequently amended, rescinded, or determined invalid. 158 Loan Estimate page 79

80 Creditor must include at least one service provider for each service category for which the borrower is permitted to select the provider. 159 Integrated Disclosure Timeline Example Creditor is not open for business on Saturdays. Application received August 3, Received an addendum to Contract modifying the allocation of transfer taxes between the Consumer and Seller. (August 28th) Appraisal results in a LTV ratio higher than 80%, triggering mortgage insurance. (September 4th) An updated credit report obtained by the Creditor shows a changed credit score, triggering a Loan Level Pricing Adjustment (LLPA). (September 22nd) A rate lock is requested by the Consumer. (October 5th) Consumer decides to obtain an Owner s Title Policy the week prior to consummation. (October 21st) During a walkthrough two days before consummation, a broken dishwasher is discovered. (October 27th) Recording fees collected were $100 more than needed when the documents are presented for recording after consummation. (October 30th) 160 Loan Estimate page 80

81 Loan Estimate page 81

82 163 FINANCIAL SOLUTIONS Patti Joyner Blenden Drop us a line sometime! 164 Loan Estimate page 82

83 Annotated Loan Estimate for TILA-RESPA Integrated Disclosure Loan Estimate page 83

84 Loan Estimate page 84

85 Loan Estimate page 85

86 Resources Where can I find a copy of the rule on Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act and the Truth in Lending Act and get more information about it? You will find the 2013 Integrated Disclosures Rule on the Bureau s website at In addition to a complete copy of the January 2013 final rule, that web page also contains: The preamble, which explains why the Bureau issued the rule; the legal authority and reasoning behind the rule; responses to comments; and analysis of the benefits, costs, and impacts of the rule Official Interpretations of the rule Other implementation support materials Useful resources related to regulatory implementation are also available at To subscribe to updates about Bureau regulations and when additional implementation resources become available, please submit your address within the updates about mortgage rule implementation box here. Loan Estimate page 86

87 FEBRUARY 7, 2014 TILA RESPA Integrated Disclosure H-29 Escrow Cancellation Notice Model Form (12 CFR (e)) This is a blank model form of the disclosures required by 12 CFR (e). Loan Estimate page 87

88 [ Logo ] [ Name of Creditor or Servicer ] Escrow Closing Notice BORROWER MAILING ADDRESS PROPERTY ADDRESS ISSUE DATE LENDER ACCOUNT #/LOAN # PHONE As of, [date] you will no longer have an escrow account (also called an impound or trust account) because you asked us to close it. we are closing it. After this date, you must directly pay your property costs, such as taxes and homeowner s insurance, possibly in one or two large payments a year. Cost to You Escrow Closing Fee For closing your escrow account [dollar amount] In the future, 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, we 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 we buy on your behalf, which likely would cost more and provide fewer benefits than what you could buy on your own. Call [phone number] with any questions about the closing of your escrow account. We do not offer you the option of keeping the escrow account on your loan. Contact us at [phone number] by [date] if you want to keep the escrow account on your loan. Loan Estimate page 88

89 Editor's Note: Effective August 1, 2015, paragraph (e) is added, to read: (e) Escrow account cancellation notice for certain mortgage transactions. (1) Scope. In a closed-end consumer credit transaction secured by a first lien on real property or a dwelling, other than a reverse mortgage subject to , for which an escrow account was established in connection with the transaction and will be cancelled, the creditor or servicer shall disclose the information specified in paragraph (e)(2) of this section in accordance with the form requirements in paragraph (e)(4) of this section, and the timing requirements in paragraph (e)(5) of this section. For purposes of this paragraph (e), the term escrow account has the same meaning as under 12 CFR (b), and the term servicer has the same meaning as under 12 CFR (b). (2) Content requirements. If an escrow account was established in connection with a transaction subject to this paragraph (e) and the escrow account will be cancelled, the creditor or servicer shall clearly and conspicuously disclose, under the heading Escrow Closing Notice, the following information: (i) A statement informing the consumer of the date on which the consumer will no longer have an escrow account; a statement that an escrow account may also be called an impound or trust account; a statement of the reason why the escrow account will be closed; a statement that without an escrow account, the consumer must pay all property costs, such as taxes and homeowner's insurance, directly, possibly in one or two large payments a year; and a table, titled Cost to you, that contains an itemization of the amount of any fee the creditor or servicer imposes on the consumer in connection with the closure of the consumer's escrow account, labeled Escrow Closing Fee, and a statement that the fee is for closing the escrow account. (ii) Under the reference In the future : (A) A statement of the consequences if the consumer fails to pay property costs, including the actions that a State or local government may take if property taxes are not paid and the actions the creditor or servicer may take if the consumer does not pay some or all property costs, such as adding amounts to the loan balance, adding an escrow account to the loan, or purchasing a property insurance policy on the consumer's behalf that may be more expensive and provide fewer benefits than a policy that the consumer could obtain directly; (B) A statement with a telephone number that the consumer can use to request additional information about the cancellation of the escrow account; (C) A statement of whether the creditor or servicer offers the option of keeping the escrow account open and, as applicable, a telephone number the consumer can use to request that the account be kept open; and (D) A statement of whether there is a cut-off date by which the consumer can request that the account be kept open. (3) Optional information. The creditor or servicer may, at its option, include its name or logo, the consumer's name, phone number, mailing address and property address, the issue date of the notice, the loan number, or the consumer's account number on the notice required by this paragraph (e). Except for the name and logo of the creditor or servicer, the information described in this paragraph may be placed between the heading required by paragraph (e)(2) of this section and the disclosures required by paragraphs (e)(2)(i) and (ii) of this section. The name and logo may be placed above the heading required by paragraph (e)(2) of this section. (4) Form of disclosures. The disclosures required by paragraph (e)(2) of this section shall be provided in a minimum 10-point font, grouped together on the front side of a one-page document, separate from all other materials, with the headings, content, order, and format substantially similar to model form H-29 in appendix H to this part. The disclosure of the heading required by paragraph (e)(2) of this section shall be more conspicuous than, and shall precede, the other disclosures required by paragraph (e)(2) of this section. Loan Estimate page 89

90 (5) Timing. (i) Cancellation upon consumer's request. If the creditor or servicer cancels the escrow account at the consumer's request, the creditor or servicer shall ensure that the consumer receives the disclosures required by paragraph (e)(2) of this section no later than three business days before the closure of the consumer's escrow account. (ii) Cancellations other than upon the consumer's request. If the creditor or servicer cancels the escrow account and the cancellation is not at the consumer's request, the creditor or servicer shall ensure that the consumer receives the disclosures required by paragraph (e)(2) of this section no later than 30 business days before the closure of the consumer's escrow account. (iii) Receipt of disclosure. If the disclosures required by paragraph (e)(2) of this section are not provided to the consumer in person, the consumer is considered to have received the disclosures three business days after they are delivered or placed in the mail. Loan Estimate page 90

91 Editor's Note: Effective August 1, 2015, comments on section 20(e) are added, as follows: Commentary (e) Escrow account cancellation notice for certain mortgage transactions. 20(e)(1) Scope. 1. Real property or dwelling. For purposes of (e)(1), the term real property includes vacant and unimproved land. The term dwelling includes vacation and second homes and mobile homes, boats, and trailers used as residences. See (a)(19) and related commentary for additional guidance regarding the term dwelling. 2. Escrow account established in connection with the consumer's delinquency or default.neither creditors nor servicers are required to provide the disclosures required by (e)(2) when an escrow account that was established solely in connection with the consumer's delinquency or default on the underlying debt obligation will be cancelled. 3. Termination of the underlying debt obligation. Neither creditors nor servicers are required to provide disclosures required by (e)(2) when the underlying debt obligation for which an escrow account was established is terminated, including by repayment, refinancing, rescission, and foreclosure. 20(e)(2) Content requirements. 1. Clear and conspicuous standard. The clear and conspicuous standard generally requires that disclosures be in a reasonably understandable form and readily noticeable to the consumer. Paragraph 20(e)(2)(i). 1. Escrow closing fee. Section (e)(2)(i) requires the creditor to itemize the amount of any fee the creditor or servicer imposes on the consumer in connection with the closure of the consumer's escrow account, labeled Escrow Closing Fee. If the creditor or servicer independently decides to cancel the escrow account, rather than agreeing to close it at the request of the consumer, and does not charge a fee in connection with the cancellation, the creditor or service complies with (e)(2) by leaving the disclosure blank on the frontside of the one-page document described in (e)(4). 20(e)(3) Optional information. 1. Optional information permitted. Section (e)(3) lists information that the creditor or servicer may, at its option, include on the notice required by (e). To comply with (e)(3), the creditor or servicer may place the information required by (e)(3), other than the name and logo of the creditor or servicer, between the heading required by (e)(2) and the disclosures required by (e)(2)(i) and (ii). The name and logo may be placed above the heading required (e)(2). 20(e)(4) Form of disclosures. 1. Grouped and separate. The disclosures required by (e)(2) must be grouped together on the front side of a separate one-page document that contains no other material. 2. Notice must be in writing in a form that the consumer may keep. The notice containing the disclosures required by (e)(2) must be in writing in a form that the consumer may keep. See also (a) and related commentary for additional guidance on the form requirements applicable to the disclosures required by (e)(2). Loan Estimate page 91

92 20(e)(5) Timing. 20(e)(5)(i) Cancellation upon consumer's request. 1. Timing requirements. Section (e)(5)(i) provides that if the creditor or servicer cancels the escrow account at the consumer's request, the creditor or servicer shall ensure that the consumer receives the disclosures required by (e)(2) no later than three business days before closure of the consumer's escrow account. For example, for closure to occur on Thursday, the consumer must receive the disclosures on or before Monday, assuming each weekday is a business day. For purposes of (e)(5), the term business day means all calendar days except Sundays and legal public holidays referred to in (a)(6). See comment 2(a)(6)-2. 20(e)(5)(iii) Receipt of disclosure. 1. Timing of receipt. Section (e)(5)(iii) provides that if the disclosures required under (e)(2) are not provided to the consumer in person, the consumer is considered to have received the disclosures three business days after they are delivered or placed in the mail. If the creditor or servicer provides the disclosures required by (e)(2) by mail, the consumer is considered to have received them three business days after they are placed in the mail for purposes of determining when the waiting periods required by (e)(5)(i) and (ii) begins. Creditors and servicers that use electronic mail or a courier to provide disclosures may also follow this approach. If, however, the creditor or servicer delivers the disclosures required by (e)(2) to the consumer in person, the escrow account may be closed any time on the third or 30th business day following the date of delivery, as applicable. Whatever method is used to provide disclosures, creditors and servicers may rely on documentation of receipt in determining when the waiting periods required by (e)(5)(i) and (ii) begin. Loan Estimate page 92

93 FEBRUARY 7, 2014 TILA RESPA Integrated Disclosure H-24(B) Mortgage Loan Transaction Loan Estimate Fixed Rate Loan Sample This is a sample of a completed Loan Estimate for a fixed rate loan. This loan is for the purchase of property at a sale price of $180,000 and has a loan amount of $162,000, a 30-year loan term, a fixed interest rate of percent, and a prepayment penalty equal to 2.00 percent of the outstanding principal balance of the loan for the first two years after consummation of the transaction. The consumer has elected to lock the interest rate. The creditor requires an escrow account and that the consumer pay for private mortgage insurance. Loan Estimate page 93

94 FICUS BANK 4321 Random Boulevard Somecity, ST Loan Estimate DATE ISSUED 2/15/2013 APPLICANTS Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST PROPERTY 456 Somewhere Avenue Anytown, ST SALE PRICE $180,000 Save this Loan Estimate to compare with your Closing Disclosure. LOAN TERM 30 years PURPOSE Purchase ce PRODUCT Fixed Rate LOAN TYPE x Conventional FHA VA LOAN ID # RATE LOCK NO x YES, until 4/16/2013 at 5:00 p.m. EDT 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 Loan Terms Can this amount increase after closing? Loan Amount $162,000 NO Interest Rate 3.875% NO Monthly Principal & Interest See Projected Payments below for your Estimated Total Monthly Payment $ NO Does the loan have these features? Prepayment Penalty YES As high as $3,240 if you pay off the loan during the first 2 years Balloon Payment NO Projected Payments Payment Calculation Years 1-7 Years 8-30 Principal & Interest $ $ Mortgage Insurance Estimated Escrow Amount can increase over time Estimated Total Monthly Payment $1,050 $968 Estimated Taxes, Insurance & Assessments Amount can increase over time $206 a month This estimate includes In escrow? x Property Taxes YES x Homeowner s Insurance YES Other: See Section G on page 2 for escrowed property costs. You must pay for other property costs separately. Costs at Closing Estimated Closing Costs $8,054 Includes $5,672 in Loan Costs + $2,382 in Other Costs $0 in Lender Credits. See page 2 for details. Estimated Cash to Close $16,054 Includes Closing Costs. See Calculating Cash to Close on page 2 for details. Loan Estimate page 94 LOAN ESTIMATE Visit for general information and tools. PAGE 1 OF 3 LOAN ID #

95 Closing Cost Details Loan Costs A. Origination Charges $1, % of Loan Amount (Points) $405 Application Fee $300 Underwriting Fee $1,097 Other Costs E. Taxes and Other Government Fees $85 Recording Fees and Other Taxes $85 Transfer Taxes F. Prepaids $867 Homeowner s Insurance Premium ( 6 months) $605 Mortgage Insurance Premium ( months) Prepaid Interest ( $17.44 per day for %) $262 Property Taxes ( months) B. Services You Cannot Shop For $672 Appraisal Fee $405 Credit Report Fee $30 Flood Determination Fee $20 Flood Monitoring Fee $32 Tax Monitoring Fee $75 Tax Status Research Fee $110 G. Initial Escrow Payment at Closing $413 Homeowner s Insurance $ per month for 23mo. $202 Mortgage Insurance per month for 0 mo. Property Taxes $ per month for 2 mo. $211 H. Other $1,017 Title Owner s Title Policy (optional) $1,017 I. TOTAL OTHER COSTS (E + F + G + H) $2,382 C. Services You Can Shop For $3,198 Pest Inspection Fee $135 Survey Fee $65 Title Insurance Binder $700 Title Lender s Title Policy $535 Title Settlement Agent Fee $502 Title Title Search $1,261 D. TOTAL LOAN COSTS (A + B + C) $5,672 J. TOTAL CLOSING COSTS $8,054 D + I $8,054 Lender Credits Calculating Cash to Close Total Closing Costs (J) $8,054 Closing Costs Financed (Paid from your Loan Amount) $0 Down Payment/Funds from Borrower $18,000 Deposit $10,000 Funds for Borrower $0 Seller Credits $0 Adjustments and Other Credits $0 Estimated Cash to Close $16,054 Loan Estimate page 95 LOAN ESTIMATE PAGE 2 OF 3 LOAN ID #

96 Additional Information About This Loan LENDER Ficus Bank NMLS/ LICENSE ID LOAN OFFICER Joe Smith NMLS/ LICENSE ID PHONE MORTGAGE BROKER NMLS/ LICENSE ID LOAN OFFICER NMLS/ LICENSE ID PHONE Comparisons In 5 Years Annual Percentage Rate (APR) Total Interest Percentage (TIP) Use these measures to compare this loan with other loans. $56,582 Total you will have paid in principal, interest, mortgage insurance, and loan costs. $15,773 Principal you will have paid off % Your costs over the loan term expressed as a rate. This is not your interest rate % The total amount of interest that you will pay over the loan term as a percentage of your loan amount. Other Considerations Appraisal Assumption Homeowner s Insurance Late Payment Refinance Servicing 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. Confirm Receipt 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 Loan Estimate Datepage 96 LOAN ESTIMATE PAGE 3 OF 3 LOAN ID #

97 FEBRUARY 7, 2014 TILA RESPA Integrated Disclosure H-24(C) Mortgage Loan Transaction Loan Estimate Interest Only Adjustable Rate Loan Sample This is a sample of a completed Loan Estimate for an adjustable rate loan with interest only payments. This loan is for the purchase of property at a sale price of $240,000 and has a loan amount of $211,000 and a 30-year loan term. For the first five years of the loan term, the scheduled payments cover only interest and the loan has an introductory interest rate that is fixed at 4.00 percent. After five years, the payments include principal and the interst rate adjusts every three years based on the value of the Monthly Treasury Average index plus a margin of 4.00 percent. The consumer has elected to lock the interest rate. The creditor does not require an escrow account with the loan. The creditor requires that the consumer pay for private mortgage insurance. Loan Estimate page 97

98 FICUS BANK 4321 Random Boulevard Somecity, ST Loan Estimate DATE ISSUED 2/15/2013 APPLICANTS Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST PROPERTY 456 Somewhere Avenue Anytown, ST SALE PRICE $240,000 Save this Loan Estimate to compare with your Closing Disclosure. LOAN TERM 30 years PURPOSE Purchase ce PRODUCT 5 Year Interest Only, 5/3 Adjustable Rate LOAN TYPE x Conventional FHA VA LOAN ID # RATE LOCK NO x YES, until 4/16/2013 at 5:00 p.m. EDT 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 Loan Terms Loan Amount $211,000 NO Can this amount increase after closing? Interest Rate 4% YES Adjusts every 3 years starting in year 6 Can go as high as 12% in year 15 See AIR Table on page 2 for details Monthly Principal & Interest See Projected Payments below for your Estimated Total Monthly Payment $ YES Adjusts every 3 years starting in year 6 Can go as high as $2,068 in year 15 Includes only interest and no principal until year 6 See AP Table on page 2 for details Prepayment Penalty Balloon Payment Does the loan have these features? NO NO Projected Payments Payment Calculation Years 1-5 Years 6-8 Years 9-11 Years Principal & Interest Mortgage Insurance Estimated Escrow Amount can increase over time $ only interest $1,028 min $1,359 max $1,028 min $1,604 max $1,028 min $2,068 max Estimated Total Monthly Payment $812 $1,137 $1,468 $1,137 $1,713 $1,028 $2,068 Estimated Taxes, Insurance & Assessments Amount can increase over time $533 a month This estimate includes In escrow? x Property Taxes NO x Homeowner s Insurance NO Other: See Section G on page 2 for escrowed property costs. You must pay for other property costs separately. Costs at Closing Estimated Closing Costs $8,791 Includes $5,851 in Loan Costs + $2,940 in Other Costs $0 in Lender Credits. See page 2 for details. Estimated Cash to Close $27,791 Includes Closing Costs. See Calculating Cash to Close on page 2 for details. Loan Estimate page 98 LOAN ESTIMATE Visit for general information and tools. PAGE 1 OF 3 LOAN ID #

99 Closing Cost Details Loan Costs A. Origination Charges $3,110 1 % of Loan Amount (Points) $2,110 Application Fee $500 Processing Fee $500 Other Costs E. Taxes and Other Government Fees $152 Recording Fees and Other Taxes $152 Transfer Taxes F. Prepaids $1,352 Homeowner s Insurance Premium ( 12 months) $1,000 Mortgage Insurance Premium ( months) Prepaid Interest ( $23.44 per day for %) $352 Property Taxes ( months) B. Services You Cannot Shop For $820 Appraisal Fee $305 Credit Report Fee $30 Flood Determination Fee $35 Lender s Attorney Fee $400 Tax Status Research Fee $50 G. Initial Escrow Payment at Closing Homeowner s Insurance per month for 3mo. Mortgage Insurance per month for 0 mo. Property Taxes per month for mo. H. Other $1,436 Title Owner s Title Policy (optional) $1,436 I. TOTAL OTHER COSTS (E + F + G + H) $2,940 C. Services You Can Shop For $1,921 Pest Inspection Fee $125 Survey Fee $150 Title Courier Fee $32 Title Lender s Title Policy $665 Title Settlement Agent Fee $325 Title Title Search $624 D. TOTAL LOAN COSTS (A + B + C) $5,851 J. TOTAL CLOSING COSTS $8,791 D + I $8,791 Lender Credits Calculating Cash to Close Total Closing Costs (J) $8,791 Closing Costs Financed (Paid from your Loan Amount) $0 Down Payment/Funds from Borrower $29,000 Deposit $10,000 Funds for Borrower $0 Seller Credits $0 Adjustments and Other Credits $0 Estimated Cash to Close $27,791 Adjustable Payment (AP) Table Interest Only Payments? Optional Payments? Step Payments? Seasonal Payments? LOAN ESTIMATE YES for your first 60 payments Monthly Principal and Interest Payments First Change/Amount $1,028 $1,359 at 61st payment Subsequent Changes Every three years Maximum Payment $2,068 starting at 169th payment NO NO NO Adjustable Interest Rate (AIR) Table Index + Margin MTA + 4% Initial Interest Rate 4% Minimum/Maximum Interest Rate 3.25%/12% Change Frequency First Change Beginning of 61st month Subsequent Changes Every 36th month after first change Limits on Interest Rate Changes First Change Loan Estimate page 99 2% Subsequent Changes 2% PAGE 2 OF 3 LOAN ID #

100 Additional Information About This Loan LENDER Ficus Bank NMLS/ LICENSE ID LOAN OFFICER Joe Smith NMLS/ LICENSE ID PHONE MORTGAGE BROKER NMLS/ LICENSE ID LOAN OFFICER NMLS/ LICENSE ID PHONE Comparisons In 5 Years Annual Percentage Rate (APR) Total Interest Percentage (TIP) Use these measures to compare this loan with other loans. $54,944 Total you will have paid in principal, interest, mortgage insurance, and loan costs. $0 Principal you will have paid off % Your costs over the loan term expressed as a rate. This is not your interest rate % The total amount of interest that you will pay over the loan term as a percentage of your loan amount. Other Considerations Appraisal Assumption Homeowner s Insurance Late Payment Refinance Servicing 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. Confirm Receipt 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 Loan Estimate Date page 100 LOAN ESTIMATE PAGE 3 OF 3 LOAN ID #

101 FEBRUARY 7, 2014 TILA RESPA Integrated Disclosure H-24(D) Mortgage Loan Transaction Loan Estimate Refinance Sample This is a sample of a completed Loan Estimate for a transaction that is a refinance of an existing mortgage loan that secures the property, for which the consumer is estimated to receive funds from the transaction. The estimated property value is $180,000, the loan amount is $150,000, the estimated outstanding balance of the existing mortgage loan is $120,000, and the interest rate is 4.25 percent. The consumer has elected to lock the interest rate. The creditor requires an escrow account and that the consumer pay for private mortgage insurance. Loan Estimate page 101

102 FICUS BANK 4321 Random Boulevard Somecity, ST Loan Estimate DATE ISSUED 2/15/2013 APPLICANTS Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST PROPERTY 123 Anywhere Street Anytown, ST EST. PROP. VALUE $180,000 Save this Loan Estimate to compare with your Closing Disclosure. LOAN TERM 30 years PURPOSE Refinance ce PRODUCT Fixed Rate LOAN TYPE x Conventional FHA VA LOAN ID # RATE LOCK NO x YES, until 4/16/2013 at 5:00 p.m. EDT 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 Loan Terms Can this amount increase after closing? Loan Amount $150,000 NO Interest Rate 4.25% NO Monthly Principal & Interest See Projected Payments below for your Estimated Total Monthly Payment Prepayment Penalty Balloon Payment $ NO Does the loan have these features? NO NO Projected Payments Payment Calculation Years 1-4 Years 5-30 Principal & Interest $ $ Mortgage Insurance Estimated Escrow Amount can increase over time Estimated Total Monthly Payment $1,026 $944 Estimated Taxes, Insurance & Assessments Amount can increase over time $206 a month This estimate includes In escrow? x Property Taxes YES x Homeowner s Insurance YES Other: See Section G on page 2 for escrowed property costs. You must pay for other property costs separately. Costs at Closing 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. LOAN ESTIMATE From x To Borrower Loan Estimate page 102 Visit for general information and tools. PAGE 1 OF 3 LOAN ID #

103 Closing Cost Details Loan Costs A. Origination Charges $1,950.5 % of Loan Amount (Points) $750 Application Fee $250 Origination Fee $450 Underwriting Fee $500 Other Costs E. Taxes and Other Government Fees $80 Recording Fees and Other Taxes $80 Transfer Taxes F. Prepaids $1,585 Homeowner s Insurance Premium ( 6 months) $605 Mortgage Insurance Premium ( 1 months) $82 Prepaid Interest ( $17.71 per day for %) $266 Property Taxes ( 6 months) $632 B. Services You Cannot Shop For $635 Appraisal Fee $425 Credit Report Fee $30 Flood Determination Fee $25 Flood Monitoring Fee $45 Tax Monitoring Fee $65 Tax Status Research Fee $45 G. Initial Escrow Payment at Closing $413 Homeowner s Insurance $ per month for 23mo. $202 Mortgage Insurance per month for 23mo. Property Taxes $ per month for 2 mo. $211 H. Other $0 I. TOTAL OTHER COSTS (E + F + G + H) $2,078 C. Services You Can Shop For $936 Pest Inspection Fee $85 Title Insurance Binder $50 Title Lender s Title Policy $251 Title Settlement Agent Fee $350 Title Title Search $200 J. TOTAL CLOSING COSTS $5,099 D + I $5,599 Lender Credits $500 Calculating Cash to Close Loan Amount $150,000 Total Closing Costs (J) $5,099 Estimated 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 D. TOTAL LOAN COSTS (A + B + C) $3,521 Loan Estimate page 103 LOAN ESTIMATE PAGE 2 OF 3 LOAN ID #

104 Additional Information About This Loan LENDER Ficus Bank NMLS/ LICENSE ID LOAN OFFICER Joe Smith NMLS/ LICENSE ID PHONE MORTGAGE BROKER NMLS/ LICENSE ID LOAN OFFICER NMLS/ LICENSE ID PHONE Comparisons In 5 Years Annual Percentage Rate (APR) Total Interest Percentage (TIP) Use these measures to compare this loan with other loans. $51,932 Total you will have paid in principal, interest, mortgage insurance, and loan costs. $13,788 Principal you will have paid off % Your costs over the loan term expressed as a rate. This is not your interest rate % The total amount of interest that you will pay over the loan term as a percentage of your loan amount. Other Considerations Appraisal Assumption Homeowner s Insurance Late Payment Loan Acceptance Liability after Foreclosure Refinance Servicing 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. You do not have to accept this loan because you have received this form or signed a loan application. Taking this loan could end any state law protection you may currently have against liability for unpaid debt if your lender forecloses on your home. If you lose this protection, you may have to pay any debt remaining even after foreclosure. You may want to consult a lawyer for more information. 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. Loan Estimate page 104 LOAN ESTIMATE PAGE 3 OF 3 LOAN ID #

105 FEBRUARY 7, 2014 TILA RESPA Integrated Disclosure H-24(E) Mortgage Loan Transaction Loan Estimate Balloon Payment Sample This is a sample of the information required by 12 CFR (a) through (c) for a transaction with a loan term of seven years that includes a final balloon payment. Loan Estimate page 105

106 FICUS BANK 4321 Random Boulevard Somecity, ST Loan Estimate DATE ISSUED 7/23/2012 APPLICANTS Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST PROPERTY 456 Somewhere Avenue Anytown, ST SALE PRICE $190,000 Save this Loan Estimate to compare with your Closing Disclosure. LOAN TERM 7 years PURPOSE Purchase ce PRODUCT Year 7 Balloon Payment, Fixed Rate LOAN TYPE x Conventional FHA VA LOAN ID # RATE LOCK NO x YES, until 9/21/2012 at 5:00 p.m. EDT Before closing, your interest rate, points, and lender credits can change unless you lock the interest rate. All other estimated closing costs expire on 8/6/2012 at 5:00 p.m. EDT Loan Terms Can this amount increase after closing? Loan Amount $171,000 NO Interest Rate 4.375% NO Monthly Principal & Interest See Projected Payments below for your Estimated Total Monthly Payment $ NO Does the loan have these features? Prepayment Penalty NO Balloon Payment YES You will have to pay $149,263 at the end of year 7 Projected Payments Payment Calculation Years 1-7 Final Payment Principal & Interest $ $149, Mortgage Insurance Estimated Escrow Amount can increase over time Estimated Total Monthly Payment $1,250 $149, Estimated Taxes, Insurance & Assessments Amount can increase over time $309 a month This estimate includes In escrow? x Property Taxes YES x Homeowner s Insurance YES Other: See Section G on page 2 for escrowed property costs. You must pay for other property costs separately. Loan Estimate page 106

107 FEBRUARY 7, 2014 TILA RESPA Integrated Disclosure H-24(G) Mortgage Loan Transaction Loan Estimate Modification to Loan Estimate for Transaction Not Involving Seller Model Form This is a blank model Loan Estimate that illustrates the application of the content requirements in 12 CFR , with the optional alternative tables permitted by 12 CFR (d)(2) and (h)(2) for transactions without a seller. This form provides two variations of page one, four variations of page two, and four variations of page three, reflecting the variable content requirements in 12 CFR Loan Estimate page 107

108 Loan Estimate DATE ISSUED APPLICANTS PROPERTY EST. PROP. VALUE Loan Terms Save this Loan Estimate to compare with your Closing Disclosure. LOAN TERM 30 years PURPOSE Purchase PRODUCT 5 Year Interest Only, 5/3 Adjustable Rate LOAN TYPE Conventional FHA VA LOAN ID # RATE LOCK NO YES, until Before closing, your interest rate, points, and lender credits can change unless you lock the interest rate. All other estimated closing costs expire on Can this amount increase after closing? Loan Amount Interest Rate Monthly Principal & Interest See Projected Payments below for your Estimated Total Monthly Payment Does the loan have these features? Prepayment Penalty Balloon Payment Projected Payments Payment Calculation Principal & Interest Mortgage Insurance Estimated Escrow Amount can increase over time Estimated Total Monthly Payment Estimated Taxes, Insurance & Assessments Amount can increase over time This estimate includes In escrow? Property Taxes Homeowner s Insurance Other: See Section G on page 2 for escrowed property costs. You must pay for other property costs separately. Costs at Closing Estimated Closing Costs Includes in Loan Costs + in Other Costs in Lender Credits. See page 2 for details. Estimated Cash to Close Includes Closing Costs. See Calculating Cash to Close on page 2 for details. From To Borrower Loan Estimate page 108 LOAN ESTIMATE Visit for general information and tools. PAGE 1 OF 3 LOAN ID #

109 Closing Cost Details Loan Costs A. Origination Charges % of Loan Amount (Points) Desk Review Fee $150 Loan Origination Fee $1,000 Processing Fee $300 Rate Lock Fee $525 Underwriting Fee $675 Verification Fee $200 Other Costs E. Taxes and Other Government Fees Recording Fees and Other Taxes Transfer Taxes es F. Prepaids Homeowner s Insurance Premium ( months) Mortgage Insurance Premium ( months) Prepaid Interest ( per day for ) Property Taxes ( months) B. Services You Cannot Shop For Appraisal Fee $305 Credit Report Fee $30 Flood Determination Fee $35 Lender s Attorney $400 G. Initial Escrow Payment at Closing Homeowner s Insurance per month for 3 mo. Mortgage Insurance per month for 0 mo. Property Taxes per month for 3 mo. H. Other Real Estate Broker Administration Fee $200 Title Owner s Title Policy (optional) $1,436 C. Services You Can Shop For Pest Inspection Fee $125 Survey Fee $150 Title Courier Fee $32 Title Lender s Title Policy $100 Title Settlement Agent Fee $300 Title Title Search $150 I. TOTAL OTHER COSTS (E + F + G + H) J. TOTAL CLOSING COSTS D + I Lender Credits Calculating Cash to Close Loan Amount Total Closing Costs (J) Estimated Total Payoffs and Payments Estimated Cash to Close From To Borrower Estimated Closing Costs Financed (Paid from your Loan Amount) D. TOTAL LOAN COSTS (A + B + C) Loan Estimate page 109 LOAN ESTIMATE PAGE 2 OF 3 LOAN ID #

110 Closing Cost Details Loan Costs A. Origination Charges % of Loan Amount (Points) Desk Review Fee $150 Loan Origination Fee $1,000 Processing Fee $300 Rate Lock Fee $525 Underwriting Fee $675 Verification Fee $200 Other Costs E. Taxes and Other Government Fees Recording Fees and Other Taxes Transfer Taxes F. Prepaids Homeowner s Insurance Premium ( months) Mortgage Insurance Premium ( months) Prepaid Interest ( per day for ) Property Taxes ( months) B. Services You Cannot Shop For Appraisal Fee $305 Credit Report Fee $30 Flood Determination Fee $35 Lender s Attorney $400 G. Initial Escrow Payment at Closing Homeowner s Insurance per month for 3 mo. Mortgage Insurance per month for 0 mo. Property Taxes per month for 3 mo. H. Other Real Estate Broker Administration Fee $200 Title Owner s Title Policy (optional) $1,436 C. Services You Can Shop For Pest Inspection Fee $125 Survey Fee $150 Title Courier Fee $32 Title Lender s Title Policy $100 Title Settlement Agent Fee $300 Title Title Search $150 I. TOTAL OTHER COSTS (E + F + G + H) J. TOTAL CLOSING COSTS D + I Lender Credits Calculating Cash to Close Loan Amount Total Closing Costs (J) Estimated Total Payoffs and Payments Estimated Cash to Close From To Borrower Estimated Closing Costs Financed (Paid from your Loan Amount) D. TOTAL LOAN COSTS (A + B + C) Adjustable Payment (AP) Table Interest Only Payments? Optional Payments? Step Payments? Seasonal Payments? Monthly Principal and Interest Payments First Change/Amount Subsequent Changes Maximum Payment LOAN ESTIMATE Adjustable Interest Rate (AIR) Table Index + Margin Initial Interest Rate Minimum/Maximum Interest Rate Change Frequency First Change Subsequent Changes Limits on Interest Rate Changes First Change Loan Estimate page 110 Subsequent Changes PAGE 2 OF 3 LOAN ID #

111 Closing Cost Details Loan Costs A. Origination Charges % of Loan Amount (Points) Desk Review Fee $150 Loan Origination Fee $1,000 Processing Fee $300 Rate Lock Fee $525 Underwriting Fee $675 Verification Fee $200 Other Costs E. Taxes and Other Government Fees Recording Fees and Other Taxes Transfer Taxes F. Prepaids Homeowner s Insurance Premium ( months) Mortgage Insurance Premium ( months) Prepaid Interest ( per day for ) Property Taxes ( months) B. Services You Cannot Shop For Appraisal Fee $305 Credit Report Fee $30 Flood Determination Fee $35 Lender s Attorney $400 G. Initial Escrow Payment at Closing Homeowner s Insurance per month for 3 mo. Mortgage Insurance per month for 0 mo. Property Taxes per month for 3 mo. H. Other Real Estate Broker Administration Fee $200 Title Owner s Title Policy (optional) $1,436 C. Services You Can Shop For Pest Inspection Fee $125 Survey Fee $150 Title Courier Fee $32 Title Lender s Title Policy $100 Title Settlement Agent Fee $300 Title Title Search $150 I. TOTAL OTHER COSTS (E + F + G + H) J. TOTAL CLOSING COSTS D + I Lender Credits Calculating Cash to Close Loan Amount Total Closing Costs (J) Estimated Total Payoffs and Payments Estimated Cash to Close From To Borrower Estimated Closing Costs Financed (Paid from your Loan Amount) D. TOTAL LOAN COSTS (A + B + C) Adjustable Payment (AP) Table Interest Only Payments? Optional Payments? Step Payments? Seasonal Payments? Monthly Principal and Interest Payments First Change/Amount Subsequent Changes Maximum Payment LOAN ESTIMATE Loan Estimate page 111 PAGE 2 OF 3 LOAN ID #

112 Closing Cost Details Loan Costs A. Origination Charges % of Loan Amount (Points) Desk Review Fee $150 Loan Origination Fee $1,000 Processing Fee $300 Rate Lock Fee $525 Underwriting Fee $675 Verification Fee $200 Other Costs E. Taxes and Other Government Fees Recording Fees and Other Taxes Transfer Taxes F. Prepaids Homeowner s Insurance Premium ( months) Mortgage Insurance Premium ( months) Prepaid Interest ( per day for ) Property Taxes ( months) B. Services You Cannot Shop For Appraisal Fee $305 Credit Report Fee $30 Flood Determination Fee $35 Lender s Attorney $400 G. Initial Escrow Payment at Closing Homeowner s Insurance per month for 3 mo. Mortgage Insurance per month for 0 mo. Property Taxes per month for 3 mo. H. Other Real Estate Broker Administration Fee $200 Title Owner s Title Policy (optional) $1,436 C. Services You Can Shop For Pest Inspection Fee $125 Survey Fee $150 Title Courier Fee $32 Title Lender s Title Policy $100 Title Settlement Agent Fee $300 Title Title Search $150 I. TOTAL OTHER COSTS (E + F + G + H) J. TOTAL CLOSING COSTS D + I Lender Credits Calculating Cash to Close Loan Amount Total Closing Costs (J) Estimated Total Payoffs and Payments Estimated Cash to Close From To Borrower Estimated Closing Costs Financed (Paid from your Loan Amount) D. TOTAL LOAN COSTS (A + B + C) Adjustable Interest Rate (AIR) Table Index + Margin Initial Interest Rate Minimum/Maximum Interest Rate Change Frequency First Change Subsequent Changes Limits on Interest Rate Changes First Change Loan Estimate page 112 Subsequent Changes LOAN ESTIMATE PAGE 2 OF 3 LOAN ID #

113 Additional Information About This Loan LENDER NMLS/ LICENSE ID LOAN OFFICER NMLS/ LICENSE ID PHONE MORTGAGE BROKER NMLS/ LICENSE ID LOAN OFFICER NMLS/ LICENSE ID PHONE Comparisons In 5 Years Use these measures to compare this loan with other loans. Total you will have paid in principal, interest, mortgage insurance, and loan costs. Principal you will have paid off. Annual Percentage Rate (APR) Your costs over the loan term expressed as a rate. This is not your interest rate. Total Interest Percentage (TIP) The total amount of interest that you will pay over the loan term as a percentage of your loan amount. Other Considerations Appraisal Assumption Homeowner s Insurance Late Payment Liability after Foreclosure Refinance Servicing 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. 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 days late, we will charge a late fee of. Taking this loan could end any state law protection you may currently have against liability for unpaid debt if your lender forecloses on your home. If you lose this protection, you may have to pay any debt remaining even after foreclosure. You may want to consult a lawyer for more information. 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. to transfer servicing of your loan. Confirm Receipt 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. Loan Estimate page 113 Applicant Signature Date Co-Applicant Signature Date LOAN ESTIMATE PAGE 3 OF 3 LOAN ID #

114 Additional Information About This Loan LENDER NMLS/ LICENSE ID LOAN OFFICER NMLS/ LICENSE ID PHONE MORTGAGE BROKER NMLS/ LICENSE ID LOAN OFFICER NMLS/ LICENSE ID PHONE Comparisons In 5 Years Use these measures to compare this loan with other loans. Total you will have paid in principal, interest, mortgage insurance, and loan costs. Principal you will have paid off. Annual Percentage Rate (APR) Your costs over the loan term expressed as a rate. This is not your interest rate. Total Interest Percentage (TIP) The total amount of interest that you will pay over the loan term as a percentage of your loan amount. Other Considerations Appraisal Assumption Homeowner s Insurance Late Payment Loan Acceptance Liability after Foreclosure Refinance Servicing 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. 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 days late, we will charge a late fee of. You do not have to accept this loan because you have received this form or signed a loan application. Taking this loan could end any state law protection you may currently have against liability for unpaid debt if your lender forecloses on your home. If you lose this protection, you may have to pay any debt remaining even after foreclosure. You may want to consult a lawyer for more information. 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. to transfer servicing of your loan. Loan Estimate page 114 LOAN ESTIMATE PAGE 3 OF 3 LOAN ID #

115 Additional Information About This Loan LENDER NMLS/ LICENSE ID LOAN OFFICER NMLS/ LICENSE ID PHONE MORTGAGE BROKER NMLS/ LICENSE ID LOAN OFFICER NMLS/ LICENSE ID PHONE Comparisons In 5 Years Use these measures to compare this loan with other loans. Total you will have paid in principal, interest, mortgage insurance, and loan costs. Principal you will have paid off. Annual Percentage Rate (APR) Your costs over the loan term expressed as a rate. This is not your interest rate. Total Interest Percentage (TIP) The total amount of interest that you will pay over the loan term as a percentage of your loan amount. Other Considerations Assumption Late Payment Liability after Foreclosure Refinance Servicing 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. will not allow assumption of this loan on the original terms. If your payment is more than days late, we will charge a late fee of. Taking this loan could end any state law protection you may currently have against liability for unpaid debt if your lender forecloses on your home. If you lose this protection, you may have to pay any debt remaining even after foreclosure. You may want to consult a lawyer for more information. 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. to transfer servicing of your loan. Confirm Receipt 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. Loan Estimate page 115 Applicant Signature Date Co-Applicant Signature Date LOAN ESTIMATE PAGE 3 OF 3 LOAN ID #

116 Additional Information About This Loan LENDER NMLS/ LICENSE ID LOAN OFFICER NMLS/ LICENSE ID PHONE MORTGAGE BROKER NMLS/ LICENSE ID LOAN OFFICER NMLS/ LICENSE ID PHONE Comparisons In 5 Years Use these measures to compare this loan with other loans. Total you will have paid in principal, interest, mortgage insurance, and loan costs. Principal you will have paid off. Annual Percentage Rate (APR) Your costs over the loan term expressed as a rate. This is not your interest rate. Total Interest Percentage (TIP) The total amount of interest that you will pay over the loan term as a percentage of your loan amount. Other Considerations Assumption Late Payment Loan Acceptance Liability after Foreclosure Refinance Servicing 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. will not allow assumption of this loan on the original terms. If your payment is more than days late, we will charge a late fee of. You do not have to accept this loan because you have received this form or signed a loan application. Taking this loan could end any state law protection you may currently have against liability for unpaid debt if your lender forecloses on your home. If you lose this protection, you may have to pay any debt remaining even after foreclosure. You may want to consult a lawyer for more information. 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. to transfer servicing of your loan. Loan Estimate page 116 LOAN ESTIMATE PAGE 3 OF 3 LOAN ID #

117 Loan Estimate Field Quick Reference Guide Discl Page Section Title Reg Z Cite Field Disclosure Description Disclosure Rules Creditor logo and slogan allowed in the alloted space at top of form. Do not exceed the space allowed in the model form. Name and address of the Creditor making the disclosures. In transactions involving a mortgage broker, the name and address of the creditor must be disclosed, if known, even if the mortgage broker provides the disclosures If made by broker and creditor not yet known, leave blank. Creditor may customize form if desired. The creditor making the disclosures must be identified as the creditor LE 1 Loan Estimate 12 CFR (a) Creditor Name LE 1 Loan Estimate 12 CFR (a) Form Purpose "Save this Loan Estimate to compare with your Closing Disclosure." No customization allowed. Date the creditor mails or delivers the LE to the consumer. The creditor s method of delivery does not affect the date issued. In broker transactions, disclose the date the broker mails or delivers the LE to the consumer, LE 1 Loan Estimate 12 CFR (a) Date Issued Include the name and mailing address of all consumers. An additional page may be added if needed. LE 1 General Information 12 CFR (a) Applicants Address of the property that will secure the transaction. If address is unavailable, use a description such as a lot number. Always use a zip code! LE 1 General Information 12 CFR (a) Property: Real Property If real property separately valued, use only real property valued. If real and personal property included in sales price (e.g., purchase price for home including all furniture and furnishings), use the aggregate value without any reduction for estimated personal property value. Personal property also securing credit (e.g., furniture, appliances) may be, but is not required to be, included in Property description. Excluding any personal property value is the preferred property value for disclosure. Multiple pages may NOT be added to detail personal property. LE 1 General Information 12 CFR (a) Property: Personal Property If > 1 property secures the credit,all properties must be disclosed. If the addresses of all properties do not fit in the allocated space, an additional page with real property information may be appended to the end of the form. Always use a zip code for each property. Property: Multiple Properties LE 1 General Information 12 CFR (a) Purchase money mortgage - use Sale Price. If personal property is included in Sale Price, use that total price without any reduction for the estimated or appraisal value of the personal property. If no seller, use Appraised or Estimated Value. Use estimate provided by consumer at application, or creditor's own estimated value if by LE issuance creditor has one. If creditor has obtained any valuations at the time disclosure is issued, use the value to be used during underwriting. If creditor obtained multiple valuations but not yet determined which one to use for underwriting, disclose the value from any valuation creditor reasonably believes it may use. In a transaction involving a seller and sale price is not yet known, creditor complies by disclosing the estimated property value it used as the basis for the LE disclosures. LE 1 General Information 12 CFR (a) Sale Price Whole years = 3 years < 24 months = 18 mo. Not whole years = 3 yrs. 6 mo. Term to maturity of the debt expressed in years, or months, or both, as applicable. Disclose "years" for whole years, combination of abbreviations "mo." and "yrs." if not whole years, and in "mo" only if term is less than 24 months. LE 1 General Information 12 CFR (a) Loan Term Loan Estimate page 117 Financial Solutions Draft 2 1

118 Loan Estimate Field Quick Reference Guide Discl Page Section Title Reg Z Cite Field Disclosure Description Disclosure Rules If the term to maturity is adjustable (not known with certainty at closing), disclose possible range of the loan term, including the maximum # of years possible per the note. For example, if the loan term depends on the value of interest rate adjustments during the term to calculate the maximum loan term, assume that the interest rate rises as rapidly as possible after closing per the note, including the effect of any interest rate caps per adjustment or lifetime interest rate caps. Loan Term: Adjustable (not known with certainty) LE 1 General Information 12 CFR (a) Purchase (acquisition), refinance (even if creditor is not the holder or servicer of refinanced obligation), construction (if not for purchase or refinance AND it is for the initial construction of a dwelling on property disclosed), or home equity loan (for any other purpose). LE 1 General Information 12 CFR (a) Purpose The consumer intends to use the loan proceeds to purchase the property that will secure the extension of credit If the credit is to finance the acquisition of the property identified in this section. LE 1 General Information 12 CFR (a) Purpose: Purchase Consumer refinances an existing obligation already secured by the consumer s dwelling to change the rate, term, or other loan features and may or may not receive cash from the transaction. For example, in a refinance with no cash provided, the new amount financed does not exceed the unpaid principal balance, any earned unpaid finance charge on the existing debt, and amounts attributed solely to the costs of the refinancing. Conversely, in a refinance with cash provided, the consumer refinances an existing mortgage obligation and receives money from the transaction that is in addition to the funds used to pay the unpaid principal balance, any earned unpaid finance charge on the existing debt, and amounts attributed solely to the costs of the refinancing. In such a transaction, the consumer may, for example, use the newlyextended credit to pay off the balance of the existing mortgage and other consumer debt, such as a credit card balance. LE 1 General Information 12 CFR (a) Purpose: Refinance To disclose the loan is for constructionwhere the creditor extends credit to finance only the cost of initial construction (construction-only loan), not renovations to existing dwellings, and in transactions where a multiple advance loan may be permanently financed by the same creditor (construction-to-permanent loan). In a construction-only loan, the borrower may be required to make interest only payments during the loan term with the balance commonly due at the end of the construction project. LE 1 General Information 12 CFR (a) Purpose: Construction Loan is disclosed as a home equity loan if the creditor intends to extend credit for any purpose other than a purchase, refinancing, or construction. This disclosure applies whether the loan is secured by a first or subordinate lien. LE 1 General Information 12 CFR (a) Purpose: Home Equity Loan Loan Estimate page 118 Financial Solutions Draft 2 2

119 Loan Estimate Field Quick Reference Guide Discl Page Section Title Reg Z Cite Field Disclosure Description Disclosure Rules If not whole years, disclose the applicable fraction of a year using up to 2 decimal places. Ex: An adjustable rate with an introductory period of 30 months that adjusts every year thereafter, tdisclose 2.5/1 Adjustable Rate. If the introductory period were 31 months, the required disclosure would be 2.58/1 Adjustable Rate. Any payment feature that may change the periodic payment (i.e., negative amortization, interest-only, step paymen (not tied to an index), balloon payment, or seasonal payment (e.g., teacher's loan without summary payments) and duration of the relevant payment. Ex: 5 Year Interest Only. If more than 1 feature, note only the 1st applicable feature. For adjustment periods that change more frequently than monthly, disclose the applicable unit-period, such as daily, weekly, or bi-weekly. Ex: An adjustable rate construction loan with no introductory fixed rate period where the interest rate adjusts every seven days, the disclosure required is 0/Weekly Adjustable Rate. LE 1 General Information 12 CFR (a) Product: Payment Features Ex: ARM with 5 year fixed introductory rate adjusting every 3 years = 5/3 Adjustable Rate Whether loan uses an Adjustable Rate (indexed and future rates not known), Step Rate (not tied to an index) or Fixed Rate to determine interest rate. Duration of rate or payment period must precede the rate description. LE 1 General Information 12 CFR (a) Product: Rate Feature Check the box. Indicate the type of loan if using the box to the left of the blank line. Indicate the type by checking the applicable box for Conventional, insured by FHA, guaranteed by VA or the blank line left for other types. Indicate the other type of loan in the blank space provided. For federally-insured or guaranteed loans other than those described, and for loans insured or guaranteed by a State agency, the creditor shall disclose the loan type as Other, and provide a brief description of the loan type. LE 1 General Information 12 CFR (a) Loan Type May be alpha or numeric characters. Must use different number for related transactions. Unique loan identification number assigned by the creditor to the loan that may be used by the consumer, the creditor or others to identify this particular transaction. Where a creditor issues a revised LE, the loan identification number must be sufficient to enable identification of the transaction pursuant to (a)(12). LE 1 General Information 12 CFR (a) Loan ID # Indicate the date and time, including the time zone, at which the locked rate will expire. Indicate yes or no by checking the appropriate box. The interest rate is locked for a specific period of time if the creditor has agreed to terms at the disclosed rate, subject to contingencies described in any rate lock agreement between the creditor and consumer. The Rate Lock statement must 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 at which estimated closing costs expire. Rate Lock (Rate Lock's Expiration Date) LE 1 General Information 12 CFR (a) The expiration date disclosure required by (a)(13)(ii) related to estimated closing costs is required regardless of whether the interest rate is locked for a specific period of time or whether the terms and costs are otherwise accepted or extended. Rate Lock (Expiration Date for Closing Costs) LE 1 General Information 12 CFR (a) Disclose exact cents if not zero, truncated at the decimal place if the loan amount is a whole number. Example: if loan amount is $481,516.23, disclose as $481, If the loan amount is $481,516.00, disclose $481,516. LE 1 Loan Terms 12 CFR (b) Loan Amount The amount of credit to be extended under the terms of the legal obligation. Loan Estimate page 119 Financial Solutions Draft 2 3