TILA/RESPA Integrated Disclosures. BRIAN A. NETTLEINGHAM Attorney/Shareholder Regulatory Compliance Group

TILA/RESPA Integrated Disclosures BRIAN A. NETTLEINGHAM Attorney/Shareholder Regulatory Compliance Group

BACKGROUND Dodd-Frank Wall Street Reform Act Created the Consumer Financial Protection Bureau National consumer protection agency Enforcement and rulemaking authority consolidated within CFPB Dodd Frank required CFPB to use that authority in specific ways 2

CONSOLIDATION OF AUTHORITY FRB Truth In Lending Act (TILA) HUD Real Estate Settlement & Procedures Act (RESPA) CFPB TILA/RESPA Integrated Disclosures (TRID) 3

Application Closing Truth In Lending Act TIL Initial Disclosure TIL Disclosure RESPA GFE HUD 1 4

TIL Initial Disclosure GFE GFE HUD 1 Loan Estimate Variances? Closing Disclosure 5

THE RULE: OVERVIEW The Loan Estimate ( LE ) replaces two documents: Good Faith Estimate designed by HUD under RESPA Early Truth in Lending Disclosure designed by the FRB under TILA The Closing Disclosure ( CD ) replaces: HUD-1 designed by HUD under RESPA Revised Truth in Lending Disclosure by FRB under TILA New pre-disclosure requirements New timing requirements for disclosures New tolerance (variance) levels for disclosed estimates 6

IMPLEMENTATION AND SCOPE New forms cannot be used before August 1, 2015 After August 1, 2015, forms must be used for most closed-end consumer mortgages, including: Construction-only loans Loans secured by vacant land or by 25 or more acres Credit extended to certain trusts for tax or estate planning purposes 7

IMPLEMENTATION AND SCOPE Exceptions - do not use the new forms for: HELOCs Reverse mortgages Mobile home mortgages Chattel-Dwelling Loans Loans made by a creditor who makes five or fewer mortgages in a year 8

PERMISSIVE/PROHIBITED USE OF FORMS You can use the forms for loans not covered by TILA or RESPA But you cannot use forms in place of HUD-1, GFE and TILA forms where the transaction is covered by TILA or RESPA (i.e., reverse mortgages) The rule exempts certain down payment assistance loans, but the transaction must meet criteria listed in the rule and corresponding RESPA exemptions 9

CONSUMMATION Consummation Not the same thing as closing or settlement May commonly occur at the same time as closing or settlement, but it is a legally distinct event Consummation occurs when the consumer becomes contractually obligated to the creditor on the loan, not, for example, when the consumer becomes contractually obligated to a seller on a real estate transaction. 10

THE PROCESS - SIMPLIFIED Borrower submits application Creditor provides LE within 3 days of application and at least 7 days before consummation Borrower accepts LE CD delivered to borrower at least 3 days before consummation CD errors corrected within 30 days Variance errors corrected within 60 days after consummation 11

LIMITATIONS ON PRE-LE CHARGES Cannot charge fees before the consumer has received the Loan Estimate and consented to proceed with the transaction Cannot require that consumers submit documents verifying information related to the application before providing the Loan Estimate Cannot provide written estimates of costs before issuing a Loan Estimate unless you provide a written statement that the terms and costs may change 12

DIFFERENCES BETWEEN PROPOSED RULE AND FINAL RULE Two proposed provisions omitted: No All-in APR No mandatory machine-readable record retention; the data standard wasn t specific enough Lenders must issue the Loan Estimate within 3 days of application Proposed rule included Saturdays in the 3-day period for LE Final Rule only counts days the lender is actually open for this purpose* * Does not apply when calculating time for CD 13

DIFFERENCES BETWEEN PROPOSED RULE AND FINAL RULE Proposed Rule required reissue CD/ restart 3-day waiting period whenever there was more than minor change Now 3-day waiting period restarts only if there are substantial changes to: APR Loan Product (fixed rate becomes adjustable rate or interest only mortgage) Prepayment penalty added 14

APPLICATION Submission of the application triggers obligation to provide Loan Estimate and consists of six pieces of information: Consumer s name Income Social Security Number Property address Estimated value of the property Mortgage loan amount sought Former catch-all provision ( any other information deemed necessary by the loan originator ) has been eliminated 15

APPLICATION Application can be complete without the consumer requesting a specific loan product or term CFPB expects creditors to be able to obtain additional information before issuing the LE If not specified, creditor can select product, term or other features to use when producing the LE (good faith still required) Creditor is not required to produce multiple Loan Estimates for different products 16

APPLICATION No special treatment of online applications Consumer can save an online application without submitting it Online application systems should not refuse applications for lack of preferred information Information from a previous or existing loan or loan application submission does not constitute submission 17

Application Submission 3 Days Issue Loan Estimate 18

LOAN ESTIMATE: SCOPE Loan Estimate required for any federally related mortgage loans Alternative Loan Estimate may be used if the transaction has no seller Must contain a good faith estimate of credit costs and: Be based on best information available at that time and due diligence Be In writing and contain the information described in 1026.37 19

LOAN ESTIMATE: DELIVERY The creditor is responsible for delivering the Loan Estimate or placing it in the mail no later than 3 business days after receiving the application Mortgage broker may deliver the LE if the broker received the application Business day means a day on which the creditor s offices are open to the public for carrying out substantially all of its business functions. 20

LOAN ESTIMATE: DELIVERY If not delivered in person, the consumer is considered to have received it 3 business days after it is delivered or placed in the mail Loan Estimate must be delivered or placed in the mail no later than 7 business days before consummation (This does not apply to revised disclosures) 21

LOAN ESTIMATE: PROVIDER LIST When LE is delivered, creditor must also provide a written list of providers that corresponds to the settlement services for which the consumer can shop (as disclosed on the Loan Estimate) The creditor may also identify on the written list of providers those services for which the consumer is not permitted to shop Services must be clearly and conspicuously distinguished 22

INFORMATION BOOKLET Creditors must deliver or place in the mail the special information booklet not later than 3 business days after receiving the consumer s loan application Booklet is not required if the consumer mortgage loan is not for the purpose of purchasing a one-to-four family residential property: A refinancing A closed-end loan secured by a subordinate lien A reverse mortgage 23

Application Submission Within 3 Days Issue Loan Estimate At least 7 days before Consummation 24

LOAN ESTIMATE: WAIVER OF WAITING PERIOD Consumer can waive the 7-business-day waiting period for a bonafide personal financial emergency Consumer must give the creditor a dated written statement that Describes the emergency Specifically modifies or waives the waiting period Is signed by all consumers primarily liable on the legal obligation 25

LOAN ESTIMATE: CONSUMER CONSENT A consumer indicates intent to proceed with the transaction when The consumer communicates, in any manner, that the consumer chooses to proceed after the Loan Estimate has been delivered Unless a particular manner of communication is required by the creditor 26

LOAN ESTIMATE: REVISIONS PERMITTED Revised Loan Estimates permitted only in certain specific circumstances: 1. Changed circumstances that occur after the Loan Estimate is provided to the consumer cause estimated settlement charges to increase more than is permitted under the TILA-RESPA rule 2. Changed circumstances that occur after the Loan Estimate is provided to the consumer affect the consumer s eligibility for the terms for which the consumer applied or the value of the security for the loan 3. Revisions to the credit terms or the settlement are requested by the consumer 27

LOAN ESTIMATE: REVISIONS PERMITTED Conditions (continued): 4. The interest rate was not locked when the Loan Estimate was provided, and locking the rate causes the points or lender credits disclosed on the Loan Estimate to change 5. The consumer indicates an intent to proceed with the transaction more than 10 business days after the Loan Estimate was originally provided 6. The loan is a new construction loan, and settlement is delayed by more than 60 calendar days, if the original Loan Estimate states clearly and conspicuously that at any time prior to 60 calendar days before consummation, the creditor may issue revised disclosures 28

LOAN ESTIMATE: DOES RATE LOCK REQUIRE REVISION? CFPB has said that the revised LE must be provided on the same business day the creditor and consumer enter into the rate lock agreement (not necessarily the date the lock is requested) The Bureau does not believe that creditors need that much time in situations where the interest rate is locked because the creditor controls when it executes the rate lock agreement. Re-disclosure is not triggered when the interest rate has been set but a rate lock agreement does not yet exist: The Bureau intended that 1026.19(e)(3)(iv)(D) only applies in situations where a rate lock agreement has been entered into between the creditor and the borrower or where such agreement has expired. 29

LOAN ESTIMATE: REVISIONS PERMITTED A creditor also may provide and use a revised Loan Estimate if 1. A changed circumstance affected the consumer s creditworthiness, or 2. A changed circumstance affected the value of the security for the loan, and 3. As a result of either condition, the consumer becomes ineligible for the disclosed estimated previously disclosed loan term 30

TIMELINE: REVISED LOAN ESTIMATE Creditor must deliver or place in the mail the revised LE no later than 3 business days after receiving the information that justifies revision The revised LE must be provided before the Closing Disclosure The creditor must ensure that the consumer receives the revised LE no later than 4 business days before consummation 31

LOAN ESTIMATE FORM

LOAN ESTIMATE PAGE 1 33

ALTERNATIVE LE FORM Creditors to use an alternative Loan Estimate and an alternative Closing Disclosure with fewer entries for transactions without a seller Adjusts and abbreviates two parts of the Loan Estimate: Cash to close amount on page 1 Calculating cash to close table on page 2 Discretionary in transactions without a seller 47

LOAN ESTIMATE AND GOOD FAITH Generally cannot issue revised LE due to technical errors, miscalculations, or underestimated charges Good Faith is determined by calculating the difference between: Estimated charges in the Loan Estimate and Actual charges imposed in the Closing Disclosure Always good faith if creditor charges less than the LE 48

VARIANCES There are some amounts that are permitted to increase between LE and CD Final Rule refers to variance (rather than tolerance ) Three categories of charges: No Cap on Variance 10% Cumulative Variance Allowed 0% Variance Allowed 49

NO CAP VARIANCES A creditor can charge more than the amount disclosed on the Loan Estimate (assuming otherwise in good faith) for the following: 1. Prepaid interest; property insurance premiums; amounts placed into an escrow, impound, reserve or similar account 2. For services required by the creditor if the creditor permits the consumer to shop and the consumer selects a third-party service provider not on the creditor s written list of service providers 3. Charges paid to third-party service providers for services not required by the creditor (may be paid to affiliates of the creditor) 50

10% CAP Charges for third-party services and recording fees paid by the consumer are subject to a 10% cumulative tolerance Creditor may charge more than the amount disclosed on the LE But only if the total charges added together does not exceed the total disclosed on the LE by more than 10% If a creditor failed to include a particular charge on the LE that is later imposed, it falls under the 10% cumulative variance rule 51

0% VARIANCE For all other charges, creditors are not permitted to charge consumers more than the amount disclosed on the Loan Estimate under any circumstances (absent certain changed circumstances): Fees paid to 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 Transfer taxes 52

EXPANDED 0% CATEGORIES Reg X previously prohibited variations in between the estimated amounts and the actual amounts of Origination charges Transfer taxes Final Rule expands the current zero percent tolerance category of settlement costs to include Affiliate fees Fees charged lender required service providers Unless it is a legitimate cost revisions such as changed circumstances or borrower-requested changes 53

CHARGES PAID TO CREDITOR, BROKER, OR AFFILIATE The term affiliate means any company that controls, is controlled by, or is under common control with another company A charge is paid to the creditor, mortgage broker, or an affiliate of either if it is retained by that person or entity A charge is not paid to one of these entities when it receives money but passes it on to an unaffiliated third party 54

VARIANCE - OWNER S TITLE INSURANCE Generally speaking, owner s title insurance not required by the creditor is not subject to the 10% cumulative tolerance The 10% category only includes recording fees and charges paid to unaffiliated third-party service providers Where the consumer is permitted to shop and chooses a provider from the creditor s written list of providers 55

VARIANCE - OWNER S TITLE INSURANCE Owner s title insurance is not called out as a charge subject to any categorical treatment under the tolerance rules Its category will depend on the other rules: Whether it is required by the creditor If required, is shopping is permitted and/or did it occur If owner s title is not required and is disclosed as optional, it is a variation permitted charges - not subject to tolerance. 56

VARIANCE - THRESHOLD VIOLATION 60 DAY CURE PERIOD If the amounts paid by the consumer at closing exceed the amounts disclosed on the Loan Estimate beyond the applicable tolerance threshold, the creditor must refund the excess to the consumer no later than 60 calendar days after consummation 57

CLOSING DISCLOSURE Creditor required to ensure that the consumer receives the Closing Disclosure no later than 3 business days before consummation: Must be in writing Generally must contain the actual terms and costs of the transaction For any loans subject to the TILA-RESPA rule that are federally related mortgage (which will include most mortgages) creditors must use the form H-25 58

CLOSING DISCLOSURE: BUSINESS DAY DEFINED Business day has a different meaning for the Closing Disclosure than for the Loan Estimate For purposes of the Closing Disclosure, business day means all calendar days except Sundays and the legal public holidays The loan may not be consummated less than three business days after the Closing Disclosure is received by the consumer If a settlement is scheduled during the waiting period, the creditor generally must postpone settlement, unless a settlement within the waiting period is necessary to meet a bona fide personal financial emergency 59

CLOSING DISCLOSURE: DELIVERY/TIMING CD can be delivered via hand delivery, mail, or email Creditor can use electronic signatures If provided in person, deemed received that day If mailed or delivered electronically, deemed received 3 business days after it is delivered or mailed If the creditor has evidence that the consumer received the CD earlier than 3 business days after mailing or delivery, it may rely on that evidence and deem it received on that date 60

CLOSING DISCLOSURE: DELIVERY/PREPARATION Creditors may contract with settlement agents to have the settlement agent provide the CD to consumer Creditors and settlement agents may divide responsibility for completing CD Creditor must communicate with agent to ensure requirements are satisfied Creditor remains legally responsible for any errors or defects The settlement agent is required to provide the seller with the Closing Disclosure reflecting the actual terms of the seller s transaction 61

CLOSING DISCLOSURE: ESTIMATED AMOUNTS Creditors may estimate disclosure amounts when the actual term or cost is not reasonably available when the disclosure is made if: Using the best information reasonably available Acting in good faith and using due diligence to obtain the information Creditor normally may rely on the representations of other parties in obtaining the information, including, for example, the settlement agent 62

CLOSING DISCLOSURE: USING AVERAGES An average charge can be used if it is no more than the average amount paid for that service by all consumers and sellers for a class of transactions Creditor or settlement service provider must: Define the class of transactions based on an appropriate period of time, geographic area, and type of loan Use the same average charge for every transaction within the defined class Do not use an average charge for any type of insurance, any charge based on the loan amount of property value, or as is prohibited by law 63

CLOSING DISCLOSURE: WAIVER OF WAITING PERIOD Consumers may waive or modify the three-business-day waiting period when: 1. The extension of credit is needed to meet a bona fide personal financial emergency 2. The consumer has received the Closing Disclosure 3. The consumer gives the creditor a dated written statement that: Describes the emergency Specifically modifies or waives the waiting period Bears the signature of all consumers who are primarily liable on the legal obligation 64

CLOSING DISCLOSURE: REDISCLOSURE Certain changes require creditors to re-disclose terms or costs on the CD Three categories of changes that require a corrected CD: 1. Changes that occur before consummation that require a new 3- business-day waiting period 2. Changes that occur before consummation and do not require a new 3-business-day waiting period 3. Changes that occur after consummation. 65

CLOSING DISCLOSURE: REDISCLOSURE/3-DAYS New 3-day waiting period required if there are substantial changes to: APR Loan Product (fixed rate becomes adjustable rate or interest only mortgage) Prepayment penalty added 66

CLOSING DISCLOSURE: REDISCLOSURE/NO 3-DAY PERIOD For any other changes before consummation that do not fall under the three categories above, the creditor still must: Provide a corrected Closing Disclosure with any terms or costs that have changed and ensure that the consumer receives it For these changes, there is no additional three-business-day waiting period required The creditor must ensure only that the consumer receives the revised Closing Disclosure at or before consummation 67

CLOSING DISCLOSURE: REDISCLOSURE FOR APR? Is an additional 3-business-day waiting period required if the APR decreases by more than ¼ or ⅛ percentage points? An additional three business day waiting period is required if the APR on the Closing Disclosure becomes inaccurate But assume an APR was overdisclosed due to an overdisclosed finance charge That situation should not require a new waiting period* * Based on oral guidance from CFPB 68

CLOSING DISCLOSURE: CONSUMER REQUEST TO INSPECT A consumer may request to inspect the Closing Disclosure the business day before consummation The corrected Closing Disclosure presented to the consumer must reflect any adjustments to the costs or terms that are known to the creditor at the time the consumer inspects it 69

CLOSING DISCLOSURE FOR SELLER In transactions with a seller, where the creditor may commonly have no relationship with the seller, the settlement agent shall provide the seller with the Closing Disclosures In this circumstance, the third-party settlement agent may provide the seller with the Closing Disclosure on a different document than that provided to the consumer by the creditor When the consumer and seller s disclosures are provided on separate documents, the settlement agent shall provide to the creditor, again assuming different parties, a copy of the disclosures provided to the seller 70

CLOSING DISCLOSURE AND RECORD RETENTION FOR SELLER The Rule does not does not state that settlement agents are required to provide the creditor with underlying records used to take the seller s disclosures Examples: Copies of agreements outside the purchase contract that may exist between the seller and buyer Any invoices or bills related to fees or costs paid by the seller but not on behalf of the borrower 71

CLOSING DISCLOSURE: CORRECTIONS REQUIRED Post-consummation, creditors must provide a corrected Closing Disclosure if, within 30-calendar days following consummation: An event in connection with the settlement occurs that causes the Closing Disclosure to become inaccurate And results in a change to an amount paid by the consumer from what was previously disclosed Creditor must deliver or place in the mail a corrected Closing Disclosure not later than 30 calendar days after receiving information sufficient to establish that such an event has occurred 72

CLOSING DISCLOSURE: CORRECTIONS POST-CONSUMMATION Settlement agents must provide a revised Closing Disclosure to seller if: An event related to the settlement occurs during the 30-day period after consummation that causes the Closing Disclosure to become inaccurate, and Results in a change to an amount actually paid by the seller from what was previously disclosed The settlement agent must deliver or place in the mail a corrected Closing Disclosure not later than 30 calendar days after receiving information sufficient to establish that such an event has occurred 73

CLOSING DISCLOSURE: CORRECTIONS FOR TOLERANCE VIOLATION Creditors must issue revised CD to correct non-numerical clerical errors and document refunds for tolerance violations no later than 60 calendar days after consummation An error is clerical if it does not affect a numerical disclosure and does not affect the timing and/or delivery If the creditor cures a tolerance violation by providing a refund to the consumer, the creditor must deliver or place in the mail a corrected Closing Disclosure that reflects the refund no later than 60 calendar days after consummation 74

CLOSING DISCLOSURE FORM

CLOSING DISCLOSURE PAGE 1 76

CD PAGE 2 RECORDING FEE ISSUES Difference in recording fees between the LE and the CD The LE requires recording fees to be disclosed as one item The CD requires the recording fees to be disclosed as one item, except: It requires that amounts for recording the deed and the mortgage be itemized Recording fees associated with any other documents, except for the deed and mortgage, are included in the total recording fees and not separately itemized 87

CLOSING DISCLOSURE PAGE 2 IDENTIFY TRANSFER TAXES How should creditors disclose the name of the government entity to whom a transfer tax is distributed? Creditors should disclose the name of the entity assessing the transfer tax, even if that is different from the payee of the check cut by the settlement agent. ( 1026.37(g)(1)(ii)). 91

CLOSING DISCLOSURE PAGE 3 Summaries of Borrower and Seller transactions Similar to current page 1 of HUD-1 The closing disclosure given to the seller must also be provided to the creditor by the settlement agent Lender s credits will not appear in the borrower s transaction table Lender credit will either show as individual settlement services paid by others or as a generalized lender credit at the bottom of Page 2 97

ESCROW NOTICE Creditor must provide a consumer notice not later than three business days before the consumer s escrow account is cancelled For loans subject to the escrow account cancellation notice requirement, creditor or servicer must disclose: When and why the escrow account will be closed That an escrow account may also be called an impound or trust account That without an escrow account the consumer must directly pay all property costs (i.e., taxes, homeowner s insurance) 108

ESCROW NOTICE Escrow account cancellation notice requirements (continued): A Cost to you table itemizing the amount of any fee imposed on the consumer in connection with the closure of the escrow account A statement that the fee is for closing the escrow account and under In the future, consequences for failure to pay property costs A telephone number for additional information Whether escrow account can be kept open Whether there is a deadline to request that the escrow account be kept open. 109

RECORD RETENTION After consummation, Creditor must retain: Loan Estimate for 3 years Closing Disclosure and all related documents for 5 years Post-Consummation Escrow Cancellation Notice (Escrow Closing Notice) for 2 years Post-Consummation Partial Payment Policy Disclosure for two years 110

RECORD RETENTION If mortgage is sold (and the creditor does not retain servicing rights), creditor must provide a copy of the Closing Disclosure to the purchaser Both entities are required to keep copies of the Closing Disclosure for the five year period. The creditor or servicer, if applicable, must retain all records and/or evidence of compliance with the Integrated Disclosure Rules for three years after the consummation of the transaction 111

CLOSING DISCLOSURE AND RECORD RETENTION FOR SELLER CFPB guidance: Creditors not required to collect the seller-specific records from the third-party settlement agent or retain them along with the Closing Disclosure If the creditor receives documentation related to the seller s disclosure, the creditor should adhere to the normal record retention requirements and retain those records Such as when the creditor is the settlement agent When seller-related documents are provided to the creditor by a third-party settlement agent along with the completed disclosure 112

TRID TIMELINES CFPB SCENARIO

TIME LINE EXAMPLE Assumptions The Creditor is not open for business on Saturdays. The property is located in a State where consummation is the day of closing, or signing of documents, between the Consumer and Seller. All parties are targeting a closing date of October 29. The Consumer s application is received by the Creditor on Monday, August 3, 2015. From CFPB: TILA RESPA Integration Disclosure Timeline Example (September 2014) 114

TIME LINE EXAMPLE For purposes of providing the Loan Estimate, or any revised Loan Estimate, a business day is a day on which the creditor s offices are open to the public for carrying out substantially all of its business functions. For all other purposes, business day means all calendar days except Sundays and legal public holidays specified in 5 U.S.C. 6103(a) such as, New Year s Day, the Birthday of Martin Luther King, Jr., Washington s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day. From CFPB: TILA RESPA Integration Disclosure Timeline Example (September 2014) 115

TIME LINE EXAMPLE This timeline shows the effect of the following events during the course of the origination of the loan: Receipt of an addendum to Contract modifying the allocation of transfer taxes between the Consumer and Seller. (August 28th) Appraisal provides a property value resulting in a loan-to-value ratio higher than 80%, triggering mortgage insurance. (September 4th) An updated credit report obtained by the Creditor shows a changed credit score, triggering a LLPA. (September 22nd) From CFPB: TILA RESPA Integration Disclosure Timeline Example (September 2014) 116

TIME LINE EXAMPLE Events (continued): A rate lock is requested by the Consumer. (October 5th) The 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) The recording fees collected were $100 more than needed when the documents are presented for recording after consummation. (October 30th) From CFPB: TILA RESPA Integration Disclosure Timeline Example (September 2014) 117

118 From CFPB: TILA RESPA Integration Disclosure Timeline Example (September 2014)

CURING VIOLATIONS The Bureau believes that providing creditors with sufficient time to obtain revised cost information, revise the integrated disclosures, prepare payments for such revised costs or the cures to be paid to consumers, and deliver such payments to consumers will facilitate compliance and ensure accurate disclosures and payments for consumers The final rule removes the condition that refunds and revised disclosures be provided as soon as reasonably practicable in favor of a bright-line standard by which revised disclosures must be mailed or delivered The Bureau lengthened the cure period to 60 days after consummation 123

CURING VIOLATIONS Final 1026.19(f)(2)(v) provides that: If amounts paid by the consumer exceed the amounts specified under 1026.19((e)(3)(i) or (ii), the creditor complies with 1026.19(e)(1)(i) if: The creditor refunds the excess to the consumer no later than 60 days after consummation, and The creditor complies with 1026.19(f)(1)(i) if the creditor delivers or places in the mail corrected disclosures that reflect such refund no later than 60 days after consummation. 124

CURING VIOLATIONS This proposed regulation will enable meaningful disclosure of credit terms, prevent circumvention and evasion of TILA, and will facilitate compliance with TILA by enabling creditors to refund amounts collected in excess of the good faith requirements, consistent with TILA section 105(a). This will also result in the meaningful advance disclosure of settlement costs and the elimination of kickbacks, referral fees, and other practices that tend to increase unnecessarily the costs of certain settlement services by enabling creditors to refund amounts collected in excess of the good faith requirements, thereby furthering the meaningfulness and reliability of the estimated disclosures, consistent with section 19(a) of RESPA. 125

GENERAL CONCERNS Challenges Significant challenge will be closing disclosure timing change - getting documents to consumer 3 days before consummation Today, a buyer might still be in negotiations with the seller, and things can change right up until the closing. Industry Integration Awareness and communication of expectations 126

TILA/RESPA Integrated Disclosures BRIAN A. NETTLEINGHAM Attorney Regulatory Compliance Group LINDSEY R. JOHNSON Attorney Regulatory Compliance Group