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Disclaimer: The following information is intended for general information purposes with the goal of assisting Ellie Mae’s customers in complying with the new KBYO regulations. This information is provided as a courtesy to Ellie Mae’s customers and Ellie Mae makes no representation or warranty regarding the accuracy of the information set forth herein, and you may not rely on this information to ensure your company’s compliance with the KBYO regulations. This FAQ should not be construed as legal advice or opinion on any specific facts or circumstances, including the application of the KBYO regulations. You are advised to consult your own compliance staff or attorney regarding your specific residential mortgage lending questions or situation to ensure your compliance with all applicable laws and regulations.
Part 1: Rule Applicability Part 2: Definition of Application (with questions pertaining to Pre-Approval and Pre-Qualification) Part 3: Loan Estimate – Miscellaneous Questions Part 4: Loan Estimate – Timing & Consumer Receipt Part 5: Loan Estimate – Details of Disclosure Completion Part 6: Loan Estimate – Intent to Proceed Part 7: Loan Estimate – Variance Part 8: Loan Estimate – Change of Circumstance Part 9: Revised Loan Estimate – Revisions/Re-Disclosure (including Timing & Delivery) Part 10: Closing Disclosure – General Information Part 11: Closing Disclosure – Timing & Consumer Receipt Part 12: Closing Disclosure – Details of Disclosure Completion Part 13: Closing Disclosure – Variances versus the Loan Estimate Part 14: Closing Disclosure – Revisions/Re-Disclosure (including Timing and Receipt) Part 15: Other Disclosure Effects – Other than the Loan Estimate and Closing Disclosure Part 16: Miscellaneous Other Questions

Part 1: Rule Applicability

When do the new disclosures become effective and for which transactions?
The new disclosures are effective for applications received on or after October 3, 2015. They apply to all closed-end loans securing real property. The following loans are excluded: ...
Do you define “exempt” to mean we are not “allowed” to use the new forms or not “required” to use them? Can we send the new forms on a HELOC for example in lieu of the old? Can we use the new disclosures on all transactions?
Exempt meaning not applicable under the requirements of §1026.19(e), (f) & (g) regarding the use of the Loan Estimate and Closing Disclosure. However, the use of the model forms is allo...
Can you confirm coops are excluded from the new disclosures since they are not secured by real property?
It would depend on whether an individual state has any provisions in which a cooperative unit is defined or considered "real property." Citation(s): §1026.28(a)(1); 78 FR 7...
Are transactions with 25 acres and more exempt?
No, the current provisions providing an exemption under RESPA (§1024.5(b)(1)) for properties of 25 acres or more is eliminated (reserved) under the rule. Citati...
When can we start the new disclosures?
The Loan Estimate, Closing Disclosure, and other relevant disclosures implemented by the rule are effective on October 3, 2015. They cannot be used until that date since the provisions g...
Do manufactured (mobile home) loans still require the use of the Good Faith Estimate, Truth in Lending Statement, and the HUD-1? Do we have the option to use the Loan Estimate and Closing Disclosure?
It depends. If the manufactured home is or will be attached to real property and therefore considered "real property" it would be considered a covered loan under the rule. If the manufac...
So if we have a down payment assistance program that generates a 2nd lien do we disclose the first using the new disclosures or the old?
If the first lien is a closed-end transaction secured by real property, then you would use the Loan Estimate and Closing Disclosure. If the second lien is an exempt transaction (see prev...
What if a loan starts off as an Investment Property and old disclosures are sent but later changes to Owner Occupied. Can we then send new disclosures?
Yes. In this case you would refer to the policies established by your organization regarding such changes. Generally speaking, such a change would most likely trigger an adverse action n...
We are a Non-Profit Lender that does Rehabilitation Loans/Grants. Do you know how these changes will affect us?
It depends on whether the specific transaction falls within the partial exemption provisions established under §1026.3(h) regarding certain mortgage loans that would be specifically exe...
In a correspondent loan situation where the correspondent purchaser of the loan is performing the underwriting for the seller of that loan, does the correspondent purchaser have any obligation around the Loan Estimate or Closing Disclosure?
There is not sufficient information to completely answer this question. However, based on the wording of the question it appears as though the concern stems from determining who is consi...
If I issue a Loan Estimate or a Closing Disclosure am I obligated to make the loan?
Neither the Loan Estimate or the Closing Disclosure mandates an obligation to make a loan. The consumer must continue to qualify for the loan as determined by your approval/commitment to...
Is there a penalty for providing both the current and new disclosures post October 3?
It would certainly be recommended that you not issue both sets of disclosures. Although the provisions under the rule do not specifically address this issue, it would no doubt be confusi...
So for states that use an open-end mortgage this rule would not apply?
It depends on the provisions contained within the security instrument for the particular state. In many cases an open-end mortgage is simply a title used for the instrument, but it does ...
How does the rule apply to loans receiving adverse action or loan cancellation prior to issuing the Loan Estimate?
The Loan Estimate is not required under 1026.19(e)(1)(i) as long as the adverse action occurs prior to the expiration of the three general business day requirement after receipt of the a...
If our document provider is aware of the changes that are coming and provides for the correct docs to be used why do we need to prepare 3 months in advance of the actual change taking place? Can you enlighten us as to any concerns we should have?
There are many issues you should consider for advance preparation prior to October 3, including (but not limited to): service provider oversight of your LOS provider and appropriate test...
Does part of this regulation pertain to appraisers? I didn’t hear any mention of an appraisal portion.
The responsibilities for compliance with the disclosure requirements do not affect the property appraiser, nor does the rule contain any revisions to valuation independence. ...

Part 2: Definition of Application (with questions pertaining to Pre-Approval and Pre-Qualification)

What is an “Application” for purposes of issuing a Loan Estimate?
Under Regulation Z and therefore for purposes of providing a Loan Estimate, receipt of ALL six pieces of information defined as an application include: Consumer...
Regarding web applications – how do you prevent the borrower from entering all six pieces of information so as not to trigger receipt of an “Application”, which triggers the requirement to provide a Loan Estimate?
If you are taking the application from the consumer via internet, then you would want to capture as much information necessary for you to compliantly provide a Loan Estimate, as well as ...
Why would you issue a Loan Estimate without a property address?
The six items listed above define an "Application" under Regulation Z and if those items are received a Loan Estimate must be issued; however, you are not prohibited from issuing a Loan ...
How can you mail the Loan Estimate if no mailing address is required for an application?
Although receipt of the six items constitutes an "Application" under Regulation Z, you are not restricted from requesting the additional information necessary to compliantly provide the ...
What date should go on the bottom of the 1003, the date that all six RESPA items are gathered?
Since the Residential Loan Application (1003) is not a regulated form under either RESPA or TILA, but rather a widely-used industry form (remember that an "Application" could occur orall...
Today is September 26th and I’ve collected five of the six RESPA items. On October 4th I get the sixth item. Do I need to use the new Loan Estimate or do I use the 2010 Itemization?
That depends on how your organization defines an application (see previous question above and the note regarding the Regulation X definition). If based on a policy that receipt of the si...
Can a Loan Estimate be issued with “to be determined” (TBD) as a property address? Is so, does a zip code or lot number constitute a property address?
This depends on how your organization defines an application (see previous questions above on this subject). If based on a policy that receipt of the six items under Regulation Z is the ...
Can you discuss implementing the new requirements with a true preapproval program which does not have a property address, yet income/assets are verified?
You may need to analyze your processes and policies regarding the difference between a preapproval and a prequalification (presently and on the effective date of October 3, 2015). Also r...
Can you restate the reference to prohibitions on requiring W-2’s, etc.?
Regulation Z prohibits the collection of any documentation to verify information contained on the application prior to providing the Loan Estimate (effective on October 3, 2015). ...
We generally get proof of income for applicants prior to issuing a GFE currently; with the new forms can we ask for proof of income before issuing a Loan Estimate (we don’t charge any fees until loan closing)?
Refer to the response to the previous question. Citation(s): §1003.2(b)(2); CFPB Frequently Asked Questions; for present requirements see §1024.7(a)(5); FAQ’s (page 11 &...
Can a Mortgage Broker order and pay for the appraisal report on a purchase transaction before the applicant communicates their intention to proceed and before the Good Faith Estimate or Loan Estimate is provided to the consumer?
This scenario could be problematic for several reasons: The prohibition against verifying any information contained on the application prior to issuing either d...
Is there still going to be a fee worksheet type of document to be used or is the Loan Estimate the only allowable document even if the 6 items are not provided?
A written estimate of terms or costs (pre-application estimate) is authorized prior to providing the Loan Estimate. If a pre-application estimate is used there are specific requirements ...
If the Fee worksheet is used, how will the APR be disclosed?
Other than the required use of the APR in an oral response to a consumer’s inquiry regarding the cost of credit (both closed-end and open-end credit) under §1026.26(a) & (b), or the provisions as...

Part 3: Loan Estimate – Miscellaneous Questions

Are these forms eSignable?
Yes, both disclosures can be provided in electronic form subject to compliance with E-Sign provisions; however, there is no regulatory requirement that either the Loan Estimate or the Cl...
Can a wholesale lender accept a Loan Estimate with a different Lender name listed?
It’s not recommended for a creditor to accept a Loan Estimate disclosing a different creditor since the creditor is ultimately responsible for the accuracy of the Loan Estimate if issu...
What if you do not plan to act as a mortgage broker initially but end up doing so after a counter-offer to a brokered product later in the process?
It would depend on whether the counter-offer was initiated by a subsequent request by the borrower or other valid change of circumstance affecting eligibility, or whether you as the cred...
How do you view the responsibility for the Loan Estimate on the part of the lender in a wholesale transaction as being different than it is currently other than the lender name and loan number on the document?
In a standard wholesale transaction in which the wholesale lender is the creditor, there is no substantive difference between the issuance of the Good Faith Estimate (GFE) and Truth in L...
If a lender provides multiple Loan Estimates, would it be a good idea to have the borrower certify which one is chosen? If so, then the lender should probably document and retain the borrower selection, right?
There are two assumptions made regarding this question: 1) the intent of the question regarding "multiple Loan Estimates" was assumed to mean an initial Loan Estimate and subsequent revi...

Part 4: Loan Estimate – Timing & Consumer Receipt

When does the Loan Estimate have to be provided to the consumer?
The creditor shall deliver or place in the mail the Loan Estimate no later than the third [general] business day after receipt of the consumer’s application. If a mortgage broker recei...
Is the Initial Loan Estimate at a minimum required 7 days prior to consummation?
Yes, the creditor (or mortgage broker – see above) must deliver or place in the mail the Loan Estimate no later than the seventh [specific] business day before consummation of the tran...
What happens if the Loan Estimate doesn’t get delivered within 3 days, can you start over again?
No. There is no cure for timing of disclosure issuance, once you have the 6 items defined as an application the clock starts regarding the three (general) business days regarding providi...
What are the differences between a Creditor's (General) Business Day and the more specific Business Day?
General Business Day (for purposes of the question "creditor’s business day"): A day on which the creditor’s offices are open to the public for carrying on substantially...
When a federal holiday is observed on a different day, which day do you count? For example, the 4th of July is on Saturday but is observed on Friday.
It depends on whether you are talking about a general or specific business day. If general, for timing of initial issuance of the Loan Estimate, it would depend on whether y...
If my teller line is open on a Saturday, is Saturday a business day?
Saturday would be considered a general business day if your offices are open to the public for carrying on substantially all of your business functions. You should consult your complianc...
What if the state where you are lending considers Saturday a business day but you as a creditor are closed? Would the state’s ruling take precedent?
You should refer to the specific state laws and regulations in this case, as well as your compliance expert or attorney. However, for purposes of federal compliance it would not be consi...
If the application is taken on the same day the loan is locked, does the 3-day delivery rule apply? Or, does the Loan Estimate need to be disclosed by the end of the next business day?
Effective on October 3, 2015, no later than three business days after the date the interest rate is locked, the creditor shall provide a revised version of the Loan Estimate to the consu...
If the transaction has a mortgage broker, who should provide the Loan Estimate?
If a mortgage broker receives a consumer’s application either the creditor or the mortgage broker may provide a consumer with the Loan Estimate. If the mortgage broker provides the Loa...
If there is a broker in a transaction, is the Loan Estimate trigger date the date the broker received the application or when the creditor receives the application?
The date the mortgage broker receives the application. There is only one application date per transaction. Citation(s): §1026.19(e)(1)(ii) and Commentary ¶19(e)(1)(ii)-1; ...
Does the way I provide or deliver the initial Loan Estimate affect the timing of providing the Loan Estimate?
No, not in terms of time of providing the Loan Estimate. However, see questions below regarding "receipt" of the disclosure by the consumer. In terms of providing the Loan Estimate, the ...
When is a consumer considered to have received the Loan Estimate?
If not provided in person, receipt is assumed 3 [specific] business days after providing the disclosure by: Mail delivery Overnight Mail (FedEx, UPS) ...
Can a creditor rely on evidence of receipt to shorten the 3-day mailbox rule?
Yes. Example 1: If creditor sends the Loan Estimate via overnight mail on Monday and consumer signs for receipt on Tuesday, the creditor can demonstrate the Loan...
For delivery, if we are doing eSigning in person with the borrower, can it be assumed as received as well?
Yes, see the previous question above regarding the use of electronic delivery. Citation(s): Commentary ¶19(e)(1)(iv)-2; Commentary ¶19(f)(1)(iii)-2
Does this include via email on the original Loan Estimate?
Yes, see the previous question above regarding the use of electronic delivery. Citation(s): Commentary ¶19(e)(1)(iv)-2
Can you talk about how eDisclosures may be impacted by this rule? For example, if a consumer does not consent to electronic delivery in the first 3 days are we obligated to drop the disclosures in the mail?
Yes, if a creditor delivers the Loan Estimate to a consumer via email, but the creditor did not obtain the consumer’s consent to receive disclosures via email prior to delivering the d...
If the borrower does not have email for delivery, what will be acceptable form of delivery on the next day, FedEx or put in the mail?
Regulation Z provides that if any disclosures required are not provided to the consumer in person then the consumer is considered to have received the disclosures three specific business...
Who should receive the Loan Estimate if the transaction has multiple consumers?
If there is more than one consumer the Loan Estimate may be provided to any consumer who is primarily liable on the obligation. If one consumer is merely a surety or guarantor then the L...
If you are emailing and there are two consumers, is emailing to one email considered sufficient?
It depends on whether you are talking about the Loan Estimate or the Closing Disclosure. Loan Estimate: If there is more than one consumer then the Loan Estimate may be prov...
How would you know on a joint application that both borrowers received a Loan Estimate? (We are a wholesale lender.)
As the creditor (lender) you will need to ascertain any applicable information and/or documentation, as applicable, from your business partners since you are ultimately responsible for t...
What happens in October when your final forms are new but initials are old?
The new forms are driven via an Application date, so if a creditor provides a Good Faith Estimate (application received prior to 10/3/2015) then closing documents would be HUD-1 and Fina...
If you deny an application within 3 days of triggering an application, are there any disclosures that are required other than a notice of denial?
There could be. In terms of the Loan Estimate no, as long as the adverse action notice has been provided to the consumer. However, there are disclosures specific to timing related to the...

Part 5: Loan Estimate – Details of Disclosure Completion

What name is used for the Creditor/Lender?
For transactions without a mortgage broker; the creditor making the disclosures must be identified as the creditor. Creditor is a person who regularly extends consumer credit that is subject to a fi...
How will state auditors look upon disclosures with no lender name or identifier? Are you doing anything to obtain CFPB guidance on this issue?
See also the answer to the previous question, "What name is used for the Creditor/Lender?" The mortgage broker must make a good faith effort to disclose the name and address of the creditor, but if ...
If we are a broker and close in our name and use our warehouse line to fund the loan, but then the loan is purchased from us after the closing, which name will go on the Loan Estimate as creditor?
There is not sufficient information to completely answer this question. In many cases, as long as the "broker or mini-correspondent" is acting in the capacity as a creditor in a true secondary mark...
What date is placed in the Date Issued field?
The date the Loan Estimate is delivered to the consumer or placed in the mail. The method of delivery does not affect the Date Issued. For example: Creditor hand delivers LE...
Regarding the Date Issued field, what if there is a mortgage broker?
In this case date the mortgage broker mails or delivers Loan Estimate to the consumer should be used, if the mortgage broker receives the application. Citation(s): Commenta...
Do you update the Date Issued field to the current date if a revised Loan Estimate is delivered?
Yes. Regulation Z defines the date issued as the date the creditor or mortgage broker mails or delivers the Loan Estimate to the consumer. Therefore if a revised disclosure is issued it needs to ref...
What information is placed in the Property field if the address is unavailable?
The address including the zip code of the property that secures or will secure the transaction (complete address for purposes of the U.S. Postal Service) should be entered. If the address is unavail...
If FIRREA allows for a real estate evaluation vs. an appraisal, do you disclose the evaluation's value as an estimated property value or as the appraised value?
At the time of delivery of the Loan Estimate, "If the creditor has obtained any appraisals or valuations of the property for the application at the time the disclosure is issued to the consumer, the...
For Loan Term can you use months or can you use decimals instead?
The Loan Term should be stated in years or months, or both, as applicable. For example: Term >= 24 months and not equal to a whole number of years...
What would I disclose as Purpose on a construction-permanent combined disclosure?
Construction, unless the transaction also is associated with the purchase of the property. Citation(s): Commentary ¶37(a)(9)
What information is placed in the Loan ID# field?
A Loan ID Number determined by the creditor should be entered. Because it must allow for the identification of the particular credit transaction, a creditor must use a unique loan identification num...
What information is placed in the Loan ID# field if the creditor is unknown?
Assuming the Creditor's Loan ID# is not reasonably available to the mortgage broker it may be left blank. CFPB staff has said this is consistent with official commentary, which states the creditor's...
What Time and Time Zone is disclosed for the Rate Lock and Loan Estimate expiration date/time?
The disclosure requires the applicable time zone for all times provided, as determined by the creditor. For example: A creditor is located in New York and determines that t...
Do we need to change the Time Zone if daylight savings is in effect?
The disclosure requires the applicable time zone for all times provided, as determined by the creditor. The time zone itself would not change as result of daylight savings time being in effect. ...
What if the broker doesn’t know to which investor they will be sending the loan so they don’t know the time zone of the creditor?
The Loan Estimate is a creditor required disclosure; if a mortgage broker issues the Loan Estimate the creditor still maintains responsibility for ensuring that the requirements of §1026.19(e) have...
Do we have to change CDT to CST when time changes in the areas where there is daylight savings vs. standard time?
The creditor should use the time zone appropriate to the actual time zone at the time. For instance, in the example provided under the commentary to the rule states, "if the creditor is located in N...
If the Rate Lock Box is checked "YES", why is the additional verbiage appearing in these screen samples? It kind of doesn't make sense to display that on a locked rate except for the expiration date.
The additional language regarding "Before closing, your interest rate, points, and lender credits can change unless you lock the interest rate", is promulgated language contained in the model forms....
On a Loan Estimate for a locked rate, how does the consumer know the rate lock expires for funding on a refinance?
There is no allowance for placing a notice on the Loan Estimate regarding the distinction that the rate lock expiration date for a refinance is tied to the funding date (disbursement date) rather th...
The Rate Lock box on the Loan Estimate has a "yes or no" option. We primarily do home equity lending and there is no "lock" and no points. How is that handled?
In the case of a closed-end transaction where the purpose is a Home Equity Loan (meaning not a purchase money, refinance or construction loan), you would disclose the interest rate lock as "no" for ...
Does rounding take place in every single step of the calculations or only at the final result?
If a dollar amount that is required to be rounded has component unrounded numbers, the unrounded numbers are added up and then the resulting amount is rounded. If an amount that is required to be ro...
Is everything rounded up?
When rounding is required the number is rounded to the nearest dollar, whether it’s up or down. Citation(s): §1026.37(o)(4)(i)
Does the whole dollar amount round up or down to the nearest whole dollar or percent?
The rule uses standard rounding (less than 5 is down, 5 and more is up). Citation(s): Commentary ¶37(o)(4)(i)(A)
It’s understood that if a text field is blank then do not use N/A, but if a numeric field is blank should we use 0 (zero)?
It depends on the section of the Loan Estimate. Certain sections, like the numeric fields for the Projected Payments Table, require "0" in some circumstances and "-" in others. In the Calculating Ca...
How do I disclose an Interest Rate on the Loan Terms table?
Unrounded number. It may be disclosed out to 2 or 3 decimals. If it is a whole number truncate at decimal point. Examples: 3.5%, 3.000...
How does one disclose an interest rate of 3.5% on the Loan Terms table? Would it be 3.5% or 3.50%?
It would be disclosed out to two decimals as 3.50%. Citation(s): §1026.37(o)(4)(ii)
Can the "Estimated Total Monthly Payment" row use a different periodic type, for example, "Estimated Total Yearly Payment"?
Yes. Wherever "monthly" is used to describe the frequency of any payments or uses "month" to describe the applicable unit-period the creditor can substitute the appropriate term to reflect the fact...
How will USDA monthly payments be reflected in the projected payments since it decreases every year?
The loan estimate requires the creditor to disclose the initial periodic payment or range of payments. The disclosure required is of the actual periodic payment or range of payments that corresponds...
Is Flood Insurance disclosed in the Projected Payments Table?
Yes. It would be reflected in the Projected Payments Table Estimated Escrow row, if applicable. It also would be reflected in the Estimated Taxes, Insurance & Assessments section. Section §1026.37(...
What fees and charges are disclosed on the Loan Estimate?
The Loan Estimate contains good faith estimates of the fees and charges that will be paid by or imposed on the consumer. A charge ‘‘paid by or imposed on the consumer’’ refers to the final a...
Can you talk about the use of estimates on a loan estimate? What if a lender has made a good faith effort to obtain a fee, but can't obtain it? How do we indicate the amount reflected on the Loan Estimate is an estimate?
The disclosures 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 sha...
The Loan Estimate has a fixed number of fee lines and it was said that if you have more fees than lines, you will have to combine them. Is there any recommendation on what can/should be combined or is it all up to the Lender?
An addendum to the Loan Estimate may not be used for items described under "Origination Charges" or "Services you cannot shop for". If the creditor is not able to itemize every service and every cor...
Are the settlement services listed in random order?
In disclosing the "Closing Cost Details" all loan costs associated with the transaction are to be labeled using terminology that describes each item, subject to the requirements of paragraphs §1026...
Will the Origination Charges now be broken down for individual fees?
Creditors determine the level of itemization of "Origination Charges" that is appropriate. The creditor may use a general label that uses terminology that clearly and conspicuously describes the ser...
Can an origination fee be disclosed as a percent?
Origination charges other than "points" are disclosed using the dollar amount. For purposes of the Loan Estimate and Closing Disclosure, "points" are charged in connection with the transaction to re...
Where would Home Owners Association (HOA) fees be located?
It depends on type of payment. Specific fees should be placed under the following categories: B. Services Cannot Shop For ...
If our customer does not escrow do we still need to disclose HOA fees over the first year?
What will be required is a statement that the consumer will not have an escrow account, the reason why an escrow account will not be established, a statement that the consumer must pay all property ...
Where may Conventional PMI, FHA MIP, VA Funding Fee, and USDA/RHS Guarantee Fee be found on the Loan Estimate?
It depends on the type of payment: Specific fees can be found under the following scenarios: Services Did Not Shop For - Fee charged at consummation and is not ...
For banks that have a large footprint and if every loan has a different title company, so how would they be able to know fees upfront?
You will either need to ascertain the fees charged by each of these title companies, you have the option of using "average charges", or the use of estimates in "good faith". ...
Regarding tax proration accuracy on the Loan Estimate – will this be reflected in other cost and can this be updated without re-disclosure but updated to actual cost on Closing Disclosure?
Depending on the transaction, for purposes of the Calculating Cash to Close Section, Adjustments and Other Credits line, Commentary ¶37(h)(1)(vii)-6 states: "Adjustments that require additional fun...
If we have additional recording fees being charged to the borrower, where should they be itemized?
Under the subheading "Taxes and Other Government Fees," on the first line, the sum of all recording fees and other government fees and taxes (except for transfer taxes paid by the consumer and discl...
Currently our document preparation fee is reflected under the 801 charges. Which section would our document preparation fee now appear?
The document preparation fee would still be considered an origination charge and be located on the Loan Estimate under the "Closing Cost Details – Origination charges" section. Under the subheadin...
Where would a real estate commission or owner’s title policy paid by the consumer be disclosed on the Loan Estimate?
Under "Other Costs, H. Other". Any other amounts 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 ...
Where would I place a tax proration from the seller to the buyer?
Under "Other Costs, H. Other". Any other amounts 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 ...
Should real estate commissions paid by the borrower be disclosed on the loan estimate?
Yes, in "Other Costs, H. Other". Any other amounts 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 credito...
Where are Lender Credits disclosed?
In Section J. Total Closing Costs represent the sum of non-specific lender credits and specific lender credits. Non-specific lender credits are generalized payments from the creditor to the consumer...
Do loans containing closing costs paid by the Lender require any fees to be disclosed since they are not paid by the borrower?
The Loan Estimate applies to all estimated closing costs disclosed in good faith whether the charge was paid by or imposed on the consumer. Citation(s): §1026.19(e)(3)(i) a...
You mention that lender credits are not included in the "Total of Payments" are seller paid fees. Are they also excluded if identified separately and listed in seller column?
To the extent known by lender, disclose as Seller Credits under Calculating Cash to Close. Citation(s): §1026.37(h)(1)(vi) and Commentary ¶37(h)(1)(vi)
Where are Seller Credits disclosed?
To the extent known by lender, disclose as Seller Credits under Calculating Cash to Close. Seller Credits are the total amount the seller will pay for total loan costs as determined by §1026.37(f)(...
If the borrower isn't paying for the Owner's Title Policy, does it even have to be disclosed at all?
Yes. It would appear either as a Lender Credit under the total closing costs or as a Seller Credit under the "Calculating Cash to Close" section. Citation(s): §1026.37(g)(6...
If the contract states the Seller is to pay for the owner’s title policy, would that mean that it would not need to be disclosed on the Loan Estimate?
It still needs to be disclosed. It would appear as a Seller Credit under the "Calculating Cash to Close" section. Citation(s): §1026.37(h)(1)(vi) and Commentary ¶37(h)(1)(...
What about the fees charged by Title Companies? Those are not known at the point of sale or even in the middle of the process necessarily.
Disclosures may be estimated when the exact information is unknown at the time disclosures are made. Information is unknown if it is not reasonably available to the creditor at the time the disclosu...
Do we need to disclose fees that we know will be paid by the lender?
Yes. There also would be an associated lender credit (non-specific) disclosed under the total closing costs. Citation(s): §1026.37(g)(6)
If we are doing a one-time close construction loan, would the interest only payments during construction be included in the AP table?
Not necessarily. The Adjustable Payment Table is disclosed when the periodic principal and interest payment may change after consummation. If the loan does not contain these features, the AP Table i...
The construction period interest rate may also differ from the start rate/initial rate. How is that seen on this form, if at all?
If the interest rate may increase after consummation, a separate table under the master heading "Closing Cost Details" and under the heading "Adjustable Interest Rate (AIR) Table" that contains the ...
Could a contact have both a state license ID and an NMLS ID#?
Yes, although the NMLSR ID should be entered for the appropriate party if one has been assigned. In the event the creditor or the mortgage broker has not been assigned an N...
What goes in the blanks before the word "License ID" in the far left column?
The state abbreviation for the associated license number. Citation(s): §1026.37(k)(1)(2)
Are discount points paid included in TIP?
TIP = total amount of interest (including prepaid interest). Discount points are prepaid finance charges but they are not "interest" for purposes of the TIP. Citation(s): §...
I am not able to get my numbers to match on the TIP. Can you please repeat the formula?
You will need to look at the amortization schedule. Add up all of the "interest payments" for the life of loan, then add the amount of per diem interest, and finally divide that amount by the note a...
For the Total Interest Percentage (TIP) calculation, is the loan amount the same as the Amount Financed or the Total Loan Amount?
The TIP is a percentage of the amount of credit extended which would correspond to the Note Amount. Amount Financed is a defined term in Regulation Z, and has its own calculation and meaning. ...
Any thoughts on how to explain the Total Interest Percentage (TIP) to consumers?
The Total Interest Percentage (TIP) = The total amount of interest that is paid over the loan term as a percentage of the loan amount. For example, if the Loan Amount is $100,000 and the total amoun...
Does the Total Interest Percentage (TIP) base the calculation on information compiled from the Amortization schedule?
When calculating the total interest percentage, the creditor assumes that the consumer will make each payment in full and on time, and will not make any additional payments. The figures provided by ...
Does the Total Interest Percentage (TIP) calculation follow the same tolerance requirement as the APR calculations?
There is no tolerance specified regarding the TIP. Citation(s): §1026.37(l)(3)
How does calculating the TIP occur on ARM loans?
By using a composite rate. Citation(s): Commentary ¶17(c)(1)-8 and Commentary ¶37(l)(3)-2
Is the Total Interest Percentage (TIP) a life-of-loan field? Must it be retained in a servicing system?
There are no provisions requiring use or disclosure of the TIP beyond disclosure on the Loan Estimate and Closing Disclosure. Citation(s): Commentary ¶37(l)(3)
For the contact information table, if there's no mortgage broker, may that column and header be omitted?
If there is no mortgage broker involved in the transaction, the column for the Mortgage Broker is left blank; but the column remains on the Closing Disclosure Contact Information table. In the event...
Must the initial or revised Loan Estimate be signed by applicant?
Signature lines are optional and their use is determined solely by the creditor. Citation(s): ¶1026.37(n)(1) & (2)
For property-related costs (specifically insurance) on a construction loan where escrow will not be established, often builder’s risk insurance is not in place until vertical construction begins. Would we still need to disclose the builder’s risk under property related costs?
If the cost of the builder’s risk insurance is being paid by the consumer and the costs are known prior to consummation for the construction loan, or can be estimated at the time of consummation, ...
Is the rule's prohibition on using "N/A" or a "-" when fees don't apply pre-emptive of state requirements regarding no blanks spaces on disclosures?
Section §1026.28 provides information regarding inconsistent disclosure requirements where there is a conflict between federal and state laws. This section additionally allows for a state to reques...

Part 6: Loan Estimate – Intent to Proceed

Can a consumer indicate their Intent to Proceed prior to receiving the Loan Estimate?
No, the consumer cannot indicate intent to proceed until after receipt of the Loan Estimate. Otherwise, there is nothing in which to base the intent to proceed. This is also stated under the provisi...
Is signing the Loan Estimate considered Intent to Proceed?
No. The optional signature lines are for confirming receipt of the disclosure not for indicating intent to proceed with the transaction (see the next question also). Citatio...
So how does a consumer indicate an Intention to Proceed?
In any manner the consumer chooses, unless a particular manner is required by the creditor. The creditor must document this communication to satisfy the record keeping requirements of §1026.25. For...
Is documenting intent to proceed new?
No, this is applicable today under Regulation X. Citation(s): §1024.7(a)(4)
When a revised Loan Estimate is issued and Intent to Proceed has not been captured, what should be reflected as the fee expiration date?
The expiration date regarding the closing costs reflected in the Loan Estimate is for the initial delivery. Intent to proceed is only required once and not for subsequent revised Loan Estimates, the...
If fees are not charged until the time of closing do you still need the Intent to Proceed?
Yes. Commentary to rule provides that the consumer must have received the disclosures required under §1026.19(e)(1)(i), and indicated an intent to proceed with the transaction described by those di...
Does the borrower only have to indicate his or her intention to proceed with the transaction one time or every time a Loan Estimate is re-disclosed?
One time. There is no requirement to obtain evidence of a consumer’s intent to proceed for each Loan Estimate issued, only after issuance of the initial Loan Estimate. ...
Why didn't the CFPB include an “intent to proceed” section on the Loan Estimate?
From the preamble under the rule: “With respect to the request that the Loan Estimate contain a signature line that could be signed by the consumer to indicate the consumer’s intent to proceed, ...
Can we order the appraisal prior to receiving the Intent to Proceed as long as we don’t collect any fees prior to the documented Intent to Proceed?
Except for obtaining a credit report, neither a creditor nor any other person may impose a fee on a consumer in connection with the consumer's application for a mortgage transaction before the consu...

Part 7: Loan Estimate – Variance

If a creditor realizes after disclosing the Loan Estimate that the fees are out of tolerance can they deny the application or must they close the loan and cure the fees?
It would require a valid reason for denial. A creditor may use a revised estimate of a charge instead of the estimate of the charge originally disclosed under paragraph (e)(1)(i) of this section if ...
How does rounding the loan estimate fees affect the variance testing when the true amount of the fee is charged on the Closing Disclosure?
To conduct the good faith analysis required under §1026.19(e)(3)(i) and (ii), Regulation Z requires the creditor to use unrounded numbers to compare the actual charge paid by or imposed on the cons...
Can the fees decrease regardless of the Variance Category they’re in?
Fees can decrease for all categories except for Lender Credits. Lender Credits can change only under specific circumstances. The actual total amount of lender credits, whet...
Are the variance categories different than the RESPA tolerance categories?
Yes, there are some variance differences effective on 10/3/15 for applicable loans under the new rule. Here are the new variances: Variance Categories ...
If the borrower chooses the title company on the provider list provided by the creditor, does the Lender's Title Insurance then become subject to zero tolerance if it’s included in the “items the borrower cannot shop for” area on the Closing Disclosure?
If the creditor permits the consumer to shop for a settlement service, Regulation Z requires the creditor to provide a SSPL identifying at least one available provider of that service and stating th...
With the restructure of fees on page 2, do the same tolerance requirements apply? Such as Origination being a zero tolerance field?
Tolerances/variances are slightly different under the TILA/RESPA Integrated Mortgage Disclosure Rule. There are additional amounts applied to the “zero” variance category. ...
What is going to happen to Abstracting fees? Fees vary, heard this was going to be zero tolerance item?
The answer depends on whether the consumer is permitted to shop for, or cannot shop for the specific service. The creditor may identify on the written list providers of services for which the consum...
Have you heard that Lender Tolerance Cures are not going to be done in the future?
No, we have no information on the potential of such an event at this time. Citation(s): N/A
What are the citations for the Lender Cure?
Regulatory citations regarding the curing of violations under the rule are found under §1026.19(f)(2)(iii), (iv) & (v). Changes due to events occurring after consummation....
Is there any acceptable variance in APR?
Inaccurate APR is defined under Regulation Z (§1026.18 & §1026.22) and depends on whether the loan is a “regular” (.125%) or "irregular" (.25%) transaction. Citation(s...
Do we need to wait three days if an APR changes at all or by 1/8th?
If the APR becomes "inaccurate" under section §1026.22 of Regulation Z (“regular” (.125%) or "irregular" (.25%) transaction), then the three business day waiting period applies. ...
Will the current APR tolerances apply to the new Loan Estimate and Closing Disclosure forms?
Yes. APR tolerances are not changing under this rule. Citation(s): §1026.22(a)
Does disclosed APR becoming inaccurate apply if the APR goes lower than the tolerance?
Yes, if the APR falls within the definition of an “inaccurate” APR for a mortgage loan. Regulation Z states: “As a general rule, the annual percentage rate shall be co...
If the APR goes down, do we still have to wait three days, since under Regulation Z there is no penalty for that?
See response to previous question regarding when the APR becomes inaccurate. You should additionally seek legal counsel or your compliance expert’s policy guidance regarding this scenario. ...
Does the requirement for a revised Loan Estimate apply when a lock is extended?
Yes. The revised disclosures may reflect increased charges only to the extent that the reason for revision, as identified in §1026.19(e)(3)(iv)(A) through (F), actually increased the particular cha...
Can we include a cure to tolerance under this new form?
Yes. Refund of fees paid in excess of actual amount may be shown on the closing disclosure as lender credit. In addition, a statement regarding the differences with a reference to the variation comp...
When lender or seller credits are assigned to APR fees, will it continue to exclude those fees from the finance charge?
The new disclosure rule did not change any APR calculations. Citation(s): §1026.22(a)

Part 8: Loan Estimate – Change of Circumstance

Is the selection of a creditor a valid change of circumstance?
No. Valid reasons for a revised Loan Estimate include: (A) Changed circumstance affecting settlement charges Example: Appr...
Is a change in creditor and loan number but with the same rate and fees considered a change in circumstance?
No. See the response to the previous question regarding valid changes of circumstance. The mortgage broker should elect not to place a creditor’s name or Loan ID on the Loan Estimate if the credit...
How about if the closing is re-scheduled, are there any circumstances which would allow sending a new Loan Estimate after the initial Closing Disclosure has been sent?
No. A revised Loan Estimate cannot be provided on or after the date the Closing Disclosure has been delivered. Citation(s): Commentary ¶19(e)(4)(ii)-1
Can a creditor use a Closing Disclosure to document a change in circumstance in order to reestablish a baseline for disclosure charges in good faith?
Yes, with a valid changed circumstance under certain conditions and timing. Commentary ¶19(e)(4)(ii) states: “If, however, there are less than four business days between the time the revised vers...
What if the loan amount changes after the Closing Disclosure is delivered? Isn’t that a changed circumstance that would require a revised Loan Estimate, or would there just be a revised Closing Disclosure?
Closing Disclosure, with a valid changed circumstance and specific timing. Commentary ¶19(e)(4)(ii) states: “If, however, there are less than four business days between the time the revised versi...
If you have a changed circumstance do you need to issue a completely revised Loan Estimate (or Closing Disclosure), or only disclose revisions regarding the affected terms or charges?
An initial or revised Loan Estimate must be provided in good faith. If a creditor uses a revised Loan Estimate for the purpose of determining good faith, Regulation Z says the creditor must provide ...
If the interest rate has been locked on a transaction which includes a Lender Credit, and under a changed circumstance the loan amount is subsequently reduced, can the Lender Credit be reduced?
We recommend you discuss this issue with your in-house compliance experts or outside counsel. The actual total amount of lender credits, whether specific or non-specific, provided by the creditor th...
Say that the lender is doing a marketing campaign saying that they will pay the appraisal fee of $400.00. What if the appraisal comes in at $357.00 – how is that handled? Is a revised LE needed?
The creditor must refund the excess to the consumer no later than 60 calendar days after consummation. Also, see the previous question regarding decreasing a lender credit. ...

Part 9: Revised Loan Estimate – Revisions/Re-Disclosure (including Timing & Delivery)

When must the consumer receive the final revised Loan Estimate?
A consumer must receive a final revised Loan Estimate not later than 4 [specific] business days prior to consummation. A creditor cannot provide a revised Loan Estimate on or after the date the Clos...
Are we supposed to do a final Loan Estimate prior to closing on all loans? Or just for a change of circumstance only?
Creditors must provide the Closing Disclosure which reflects the actual terms of the transaction. Loan Estimate is required to provide the consumer with an estimate of the costs. If there is no chan...
When the rate is locked are we supposed to send a new Loan Estimate the same day or the day after?
When the rate is locked a creditor must provide a revised version of the Loan Estimate within 3 business days after the locking of the interest rate. Citation(s): §1026.19...
When is a revised Loan Estimate provided to the consumer?
A revised Loan Estimate must be provided within 3 business days of receiving information sufficient to establish a changed circumstance. When the rate is locked a creditor must provide a revised ver...
How should differences between Loan Estimate and Closing Disclosure information be handled? For example, if there is no loan ID number at time of Loan Estimate is it okay to leave it blank then have a loan ID number on the Closing Disclosure?
If the Creditor's Loan ID number is not reasonably available to the mortgage broker it may be left blank. CFPB staff has said this is consistent with official commentary, which states the creditor's...
What if the locked rate is less than the rate disclosed on the application, do you have to give a new Loan Estimate reflecting what the actual rate is even though it is less the application?
Yes. Commentary ¶19(e)(3)(iv)(D) states that when interest rate is not locked when the Loan Estimate is provided, a valid reason for revision exists when the interest rate is subsequently locked. N...
Would re-disclosing a Loan Estimate for a re-lock or lock extension need to be done on the same day too?
The creditor must provide a revised Loan Estimate no later than 3 business days after the date the rate is locked. There is no differentiation in the rule for initial rate locking versus any subsequ...
So are you saying if a loan interest rate is floating and locks later in the process you MUST re-disclose?
Yes. When the rate is locked a creditor must provide a revised version of the Loan Estimate within 3 business days after the locking of the interest rate. Citation(s): §10...
If there are no changes to the Loan Estimate do you still have to send a final "revised" Loan Estimate?
No. If a Loan Estimate is initially issued with a locked interest rate and there is no subsequent change of circumstance prior to delivery of the Closing Disclosure the Regulation does not require i...
If the fees decrease, do we need to send a revised Loan Estimate?
The rule only identifies requirements regarding a revised Loan Estimate for fee increases exceeding the variances provided in the rule. However, a consumer’s decision to select his or her own serv...
What if no lender credits are decided until the loan closing, does a new Loan Estimate need to be provided to reflect this?
There are a number of items to address with such a question. Let’s take the issues one at a time: 1. The final Loan Estimate must be received by the consumer no later than...
If 'points' (origination fee) are being charged that are not discount points and the loan amount changes, can the origination fee change?
No. A change to an origination fee paid to the creditor or mortgage broker falls within the zero tolerance category, since it disclosed as a dollar amount and is not an interest rate dependent charg...
When a loan is re-disclosed all fees are re-disclosed, shouldn’t only the fee(s) associated with the change of circumstance be re-disclosed?
An initial or revised Loan Estimate must be provided in good faith. If a creditor uses a revised Loan Estimate for the purpose of determining good, Regulation Z says the creditor must provide a revi...
If the Lender Credit is associated with the rate and an extension is required, can the lender credit decrease?
Yes. Within three business days of the date the interest rate is locked the creditor must provide a revised version of the disclosure to the consumer with the revised interest rate, the points discl...
If loan amount changes, then can the lender credits change?
The revised disclosures may reflect increased charges only to the extent that the reason for revision, as identified in §1026.19(e)(3)(iv)(A) through (F), actually increased the particular charge. ...
If a loan is locked and then is extended, is a revised Loan Estimate required?
A revised Loan Estimate would not be necessary unless there are changes to interest rate dependent charges. If a rate lock extension fee is being charged, then a revised Loan Estimate would be issue...

Part 10: Closing Disclosure – General Information

We know that the disclosures prior to closing will be changing, as well as the rules regarding those disclosures. Will the forms used at closing, such as the HUD, TIL, Note and Mortgage, be changing as well as a result?
The HUD-1 and TIL Statement would only be used for transactions exempt from the rule. In terms of the Note and Mortgage there are cases, particularly regarding security instruments (Mortgage, Deed o...
If there is no loan ID number at time of Loan Estimate, is it okay to leave it blank then have a loan ID number on the Closing Disclosure?
Assuming the question is posed by a mortgage broker, then yes, it is acceptable to leave the Loan ID field blank if the creditor is unknown when the mortgage broker delivers the Loan Estimate. This ...
Closing Disclosure must be provided within 3 days of closing. If there is a change can the consumer(s) waive the 3-day period to proceed?
Just to clarify, the Closing Disclosure must be received by the appropriate consumers a minimum of three specific business days prior to the loan closing (also don’t forget the seven specific busi...
Can you shorten the 7 days before consummation requirement by attaining consumer acknowledgement?
Yes, in the case of a bona fide personal financial emergency. It is recommended you use caution in applying this waiver in particular if you sell loans on the secondary market, since it is a rare oc...
Some states take months to record documents, how would this comport with the 60 day requirement if there is a recording fee refund?
It is recommended that in this case you (or an agent on your behalf, such as the settlement agent or title company) ascertain the actual recording fees when the documents are submitted for recording...
Regarding consummation, when you refer to state law are you referring to contract laws or the laws that apply in a wet vs. dry state?
This will vary by state for those limited states that may address consummation date. There are many states where this date is not clearly defined (when the consumer becomes obligated on the loan). Y...
On a rescindable transaction would the borrower become obligated after the 3 days is past or is that also subject to state contract law?
This is subject to state law. You will need to rely on guidance from your legal counsel or compliance experts to determine the consummation date for purposes of each state in which you do business. ...
If you have 2 sets of borrowers, wouldn't you deliver a Closing Disclosure for each borrower set?
It depends on whether or not the transaction is rescindable. Commentary ¶17(d)-2, states “When two consumers are joint obligors with primary liability on an obligation, the disclosures may be giv...
Will settlement agents and attorneys be required to purchase a software package that contains all of the required documents and new forms? We don’t prepare our own documents.
Whether or not settlement agents and attorneys obtain a software program to generate the disclosures is completely up to them. If they are generating the disclosure and delivering them to the consum...
Does the loan ID number on the Loan Estimate and Closing Disclosure have to be the same loan ID number an investor must use once they purchase the loan?
Regulation Z only addresses the Loan ID number relative to the Loan Estimate and Closing Disclosure. It does not address Loan ID numbers for purposes of investor purchasing, servicing, etc., once th...
How would you handle a construction to permanent loan? Should there be a Closing Disclosure for the construction and a Closing Disclosure for the modification to permanent or would you suggest treating them as two separate transactions?
The rule allows for one or separate disclosures regarding loans with multiple advances for financing the construction of a dwelling. The policy on such disclosures should be established by your legal...

Part 11: Closing Disclosure – Timing & Consumer Receipt

When do I need to provide a Closing Disclosure to a consumer?
The creditor shall ensure that the consumer receives the disclosure no later than three specific business days before consummation. If the Creditor or Settlement Agent does not provide in person, th...
When does the consumer need to receive the Closing Disclosure?
The Closing Disclosure must be received by the consumer no later than three specific business days before consummation. If the Creditor or Settlement Agent does not provide in person, then the consu...
The Closing Disclosure must be provided within 3 days of closing. If there is a change affecting the Closing Disclosure can parties waive the 3-day period to proceed?
It depends. The Closing Disclosure must be received by the appropriate consumers a minimum of three specific business days prior to the loan closing, and if there is a change to: 1) the APR, violati...
The Closing Disclosure should be provided 3 days prior to consummation. Does this include the day of consummation?
This does not include the day of closing (consummation). The Closing Disclosure must be received by the appropriate consumers a minimum of three specific business days prior to the loan closing. ...
If the Closing Date indicated is 6 days after the date the disclosure was sent however, we can prove that the borrower received the CD before the 6th day, can consummation occur prior to the indicated Closing Date?
For purposes under this rule, the closing date and consummation date are the same. However, there are allowances under the rule for documenting receipt versus reliance on the mailbox rule (received ...
If the Closing Disclosure must be received by the borrower 3 business days prior to closing, can I assume their closing will be delayed if they don't sign it until the day before the scheduled closing?
There is no requirement for the Closing Disclosure to be executed (signed) by the consumer under the rule, but you should ascertain whether or not this may be required by a specific loan program or ...
How would the previous scenario regarding the Closing Disclosure affect the borrower's adjourning on a loan at the closing table and potentially rescheduling the closing for a later date?
There is not enough detailed information to adequately answer this question. It is recommended you follow the rule requirements with regard to timing of delivery of the Closing Disclosure and subseq...
Does a non-borrowing spouse have to sign the Closing Disclosure three days prior to closing as well or just sign it at closing?
There is no requirement for the Closing Disclosure to be executed (signed) by the consumer under the rule, but you should ascertain whether or not this may be required by a specific loan program or ...

Part 12: Closing Disclosure – Details of Disclosure Completion

What date is placed in the Date Issued field?
The date the Closing Disclosure is delivered to the consumer. Commentary ¶38(a)(3)(i)-1 says for general guidance on identifying the date issued for the Closing Disclosure, see the commentary to §...
We have to give disclosure 3 business days before closing, what day do we date the form?
Date issued. The date the disclosures required by this section are delivered to the consumer, labeled “Date Issued.” Typically, that’s going to be the date either the form is being given in pe...
What is the Closing Date?
The date of consummation. Consummation means the time a consumer becomes contractually obligated on a credit transaction. State law governs when th...
In the case of a refinance, is closing date the signing date or the disbursement date? Assume this is a primary residence with 3 day rescission.
Closing Date = Consummation which is defined §1026.2(a)(13). Consummation means the time that a consumer becomes contractually obligated on a credit transaction (state law governs when a consumer b...
The date on the model Closing Disclosures for the date issued is indicated as 4-15-2013, and the closing date is the same. Shouldn't the date issued be at least 3 business days in advance?
In the model forms, it most likely is an example of a revised Closing Disclosure provided at the closing table, where the revisions are not material (no change in APR, Product Description, or additi...
Will the CFPB come out with a clear definition of the closing/consummation date that applies to all transactions, refinance, and purchase? It seems the term “closing date” varies across geographic regions.
There is no indication, at this time, of future rulemaking or guidance intended to provide a federal consummation date, other than the definition under Regulation Z. The definition of “consummatio...
What is the “Disbursement Date”?
The date the amounts disclosed pursuant to §1026.38(j)(3)(iii) and (k)(3)(iii) are expected to be paid in a purchase transaction under §1026.37(a)(9)(i) to the consumer and seller, respectively, a...
The disbursement date is often dependent on escrow/title as to when they can close/disburse the loan, is the lender now responsible for these dates?
The closing and disbursement dates would need to be coordinated between the creditor and the settlement agent; however, the creditor continues to remain responsible for the Closing Disclosure compli...
Who is the “Settlement Agent”?
The name of the settlement agent company conducting the closing. Citation(s): §1026.38(a)(3)(iv)
What is the File#?
The number assigned to the transaction by the settlement agent for identification purposes. Citation(s): §1026.38(a)(3)(v)
What is the Loan ID#?
A number that may be used by the creditor, consumer, and other parties to identify the transaction. Citation(s): §1026.37(a)(12) and §1026.38(a)(5)(v)
What is the difference between the File# and the Loan ID# on the top of Page 1 on the Closing Disclosure? Where would the File# come from?
The Loan ID is assigned by the creditor and is used to identify the transaction. The File ID is assigned by the settlement agent and used for identification purposes. Citat...
When the Loan ID# is disclosed on the Loan Estimate, is it required to remain the same on the Closing Disclosure? Is there any reason that it can change?
The Loan ID# must be the same Loan ID# on both the Loan Estimate and Closing Disclosure. There is an allowance granted for adding versioning such as by use of a hyphen and numbering sequence for mul...
If you do not have a Loan ID number at time of the Loan Estimate, is it okay to leave that blank and then have a Loan ID number on the Closing Disclosure?
If the Loan Estimate is delivered to the consumer by a mortgage broker, and at the time of delivery the creditor is unknown, the Loan ID may be left blank. However, if the Loan Estimate is initially...
What does this look like for Mortgage Brokers? If they are changing Lenders and have to reflect the same Loan ID number on the Loan Estimate versus the Closing Disclosure?
Assuming the Creditor's Loan ID# is not reasonably available to the mortgage broker it may be left blank. CFPB staff has said this is consistent with official commentary, which states the creditor's...
Is there anywhere in the Closing Disclosure that the percentage of the Prepayment Penalty is shown or does the CFPB only require the dollar amount be shown on page 1 in the Loan Terms table?
A prepayment penalty amount may be disclosed under the heading “Loan Terms”. Section 1026.37(b)(7)(i) requires disclosure of the maximum amount of the prepayment penalty that may be imposed unde...
When is a fee considered “paid to” a person? How does this affect where the fee is disclosed on the Closing Disclosure?
For purposes of §1026.19(e), a fee is not considered ‘‘paid to’’ a person if the person does not retain the fee. For example, if a consumer pays the creditor transfer taxes and recording fe...
When a specific fee is paid by the creditor, it’s placed in the “Paid By Others” column. Do I need to give it any sort of designation?
Charges that are designated as paid by others under § 1026.38(f) and (g) may include the letter “L” in parentheses, i.e. “(L)” to the left of the amount in the column to designate those cha...
Is the “Paid by Others” column assumed as paid by creditor if a fee is input there?
The amount of charges that are “paid by others” includes the creditor, but is not exclusive to the creditor. It could include other entities such as an employer or real estate agent, etc. ...
Where is a tax proration from the seller to the buyer placed?
This information would be found on page 3 of the Closing Disclosure. The reconciliation of taxes would be in sections “L” & “N”. Citation(s): §1026.38(j)(1) & (2) ...
Where may Conventional PMI, FHA MIP, VA Funding Fee, and USDA/RHS Guarantee Fee be found on the Closing Disclosure?
It depends on the type of payment:Services Did Not Shop For Fee charged at consummation and is not a prepayment of future premiums over a specific future time p...
Is a lender required to disclose other 3rd party fees (i.e. HOA contributions, short sale negotiator)?
Yes, the Closing Disclosure must disclose charges “paid by or imposed on the consumer”. Citation(s): Commentary ¶19(e)(3)(i)-2
Is Flood Insurance reflected in the estimated payment?
Yes. It would be reflected in the Projected Payments Table Estimated Escrow row, if applicable. It also would be reflected in the Estimated Taxes, Insurance & Assessments section. Section §1026.37(...
Can a settlement agent add additional lines to a section of the Closing Disclosure?
Section §1026.38(t)(5)(iv)(A), permits the deletion of unused lines from the disclosures required by §1026.38(f)(1) through (3) and (g)(1) through (4), if necessary, to allow the addition of lines...
Does the "Summaries of Transactions" replace the final Hud-1 itemization sheet?
It replaces page 1 of the HUD-1, however, settlement agents may need to develop other documents to disburse funds. Citation(s): §1026.19(f)
Not all late fees are 15/5%, can that section be altered as needed?
Many State laws authorize the calculation of late charges as either a percentage of the delinquent payment amount or a specified dollar amount, and permit the imposition of the lesser or greater of ...
What must be included as late charges?
Section §1026.37(m)(4) requires a disclosure if charges are added to an individual delinquent installment by a creditor that otherwise considers the transaction ongoing on its original terms. Late ...
Will any seller and/or realtor credits be required on the Closing Disclosure when it must be received a minimum of three business days prior to the closing?
1026.38(f), (g), and (h) require under the Closing Disclosure heading “Closing Cost Details” a disclosure of whether a charge was borrower-paid at or before closing, seller-paid at or before clo...
What is “Liability after Foreclosure”? How do we know which box to check for each state?
Comment 1 of ¶38(p)(3)–1 provides the following example: “If the creditor forecloses on the property and the proceeds of the foreclosure sale are less than the unpaid balance on the loan, wheth...
What is the minimum number of contacts that must be listed?
For the Closing Disclosure with a seller, the Contact Information table must contain the following sub-headers with their own columns: Lender Mortgage Broker ...
So in the contact information column, if the column is blank, it shouldn't show at all, correct?
For purposes of compliance with the Closing Disclosure, the columns regarding contacts must remain. However, where no such person is participating in the transaction, the column is left blank. In th...
What about signature lines for sellers?
The signature line is optional and intended for the consumer(s) on the transaction to acknowledge receipt for the benefit of the creditor. There is no requirement for a signature by the seller. You ...
If a seller agreed to pay a specific dollar amount towards the buyer's closing costs, should those items be placed in the seller's column of the Closing Disclosure or as a lump sum in the cash to close section?
It depends on whether the seller credit is a specific credit or a general credit. Commentary ¶38(i)(7)(ii) states, “the ‘‘Final’’ amount of ‘‘Seller Credits’’ reflects any change,...

Part 13: Closing Disclosure – Variances versus the Loan Estimate

Can a creditor use a Closing Disclosure to document a change in circumstance?
Under certain circumstances. The creditor shall not provide a revised Loan Estimate on or after the date on which the creditor provides the Closing Disclosure. The consumer must receive a revised Lo...
How does rounding the Loan Estimate fees affect the variances when the actual amount is disclosed on the Closing Disclosure? In particular, fees like Line 1 and Transfer Taxes, which have a zero variance allowance?
To conduct the good faith analysis required under §1026.19(e)(3)(i) and (ii), the creditor should use unrounded numbers to compare the actual charge paid by or imposed on the consumer for a settlem...
Can the fees decrease regardless of the Variance Category they are in?
Fees can decrease for all categories except for Lender Credits. When an interest rate is locked between the consumer and the creditor, a revised Loan Estimate must be provi...
Are the variance categories different than the RESPA tolerance categories?
Yes, there are some variance differences effective on 10/3/15 for applicable loans under the new rule. Here are the new variances: Variance Categories ...
If the borrower chooses the title company on the provider list provided by the creditor, does the Lender's Title Insurance then become subject to zero tolerance since it appears to be included in the items the borrower cannot shop for area on the Closing Disclosure?
Section 1026.19(e)(3)(ii) provides that if the creditor requires a service in connection with transaction and permits the consumer to shop for that service, but the consumer either does not select a...
Is it likely that a lender will need to prove whether the borrower selected a service provider to define the “shop for/did not shop for” on those costs that could go either way, such as the title costs?
Yes. A creditor shall retain evidence of compliance with the requirements of §1026.19(e) and (f) for three years after the later of the date of consummation, the date disclosures are required to be...
Have you heard that Lender Tolerance Cures are not going to be allowable in the future?
No, we have no information on the potential of such an event at this time. Citation(s): §1026.19(f)(2)(iii), (iv) & (v)
What are the citations for the Lender Cure?
Regulatory citations regarding the curing of violations under the rule are found under §1026.19(f)(2)(iii), (iv) & (v). Changes due to events occurring after consummation....
Is there any acceptable variance in APR?
Inaccurate APR is defined under Regulation Z (§1026.18 & §1026.22) and depends on whether the loan is a “regular” (.125%) or "irregular" (.25%) transaction. Citation(s...
Do we need to wait three days if APR changes at all or by 1/8th?
If the APR becomes "inaccurate" under section §1026.22 of Regulation Z (“regular” (.125%) or "irregular" (.25%) transaction), then the three business day waiting period applies. ...
Will the current APR tolerances apply to the new Loan Estimate and Closing Disclosure forms?
Yes. APR tolerances are not changing under this rule. Citation(s): §1026.22(a)
Does disclosed APR becoming inaccurate apply if the APR goes lower than the tolerance?
Regulation Z states: “As a general rule, the annual percentage rate shall be considered accurate if it is not more than 1/8 of 1 percentage point above or below the annual...
If the APR goes down, do we still have to wait three day, since under Regulation Z there is no penalty for that?
See response to previous question regarding when the APR becomes inaccurate. You should additionally seek legal counsel or your compliance expert’s policy guidance regarding this scenario, as well...
Can we include a cure for a tolerance on the Closing Disclosure?
Refund of fees paid in excess of actual amount may be shown on the closing disclosure as lender credit. In addition, a statement regarding the differences with a reference to the variation compared ...
If the Loan Estimate has combined fee values and the Closing Disclosure has individual fees listed, how are the fees compared?
To conduct the good faith analysis required under §1026.19(e)(3)(i) and (ii) the creditor should use unrounded numbers to compare the actual charge paid by or imposed on the consumer for a settleme...

Part 14: Closing Disclosure – Revisions/Re-Disclosure (including Timing and Receipt)

Would you explain under what circumstances a revised Closing Disclosure must be delivered to borrowers requiring an additional three business-day waiting period?
A revised Closing Disclosure may be delivered at or before consummation reflecting any changed terms, unless: The disclosed APR becomes inaccurate. The Loan Pro...
If the closing date is modified after issuance of the Closing Disclosure, does that trigger a three business day waiting period? Or does it only apply to fees and terms of the loan?
The requirement for the additional three business-day waiting period once the Closing Disclosure has been delivered applies under three specific scenarios: 1) an inaccurate APR, which violates the e...
Could you clarify the statement: “A product type change on the closing disclosure would mean a three day wait for closing?” There are also 2 more items that would incur a new three-day waiting period, what are they?
The three items are: 1) the APR becomes inaccurate (violates tolerances); 2) the addition of prepayment penalty; and, 3) a loan product change. These three items require redisclosure and a new waiti...
Would changing from a 30 year fixed-rate loan to a 15 year fixed-rate loan be a loan program change requiring an additional three day waiting period if the APR does not change enough to violate tolerances?
A change from a 30 year fixed rate loan to a 15 year fixed rate loan would be a loan program change and would therefore require the additional three-day waiting period regardless of being within APR...
If a loan amount changes but does not affect the APR over the tolerance do we still need to re-disclose the Closing Disclosure?
1026.19(f)(2)(i) states that except for a redisclosure based upon an inaccurate APR, the addition of prepayment penalty, or a loan product change, “the creditor shall provide corrected disclosure...
I would like to confirm that we do need to re-disclose a Closing Disclosure if the fees change but that no additional waiting period is required for the fees that do not have a tolerance such as borrowers insurance policies.
In this case, if known prior to consummation, a revised Closing Disclosure would be required at or before consummation. If discovered after consummation since it affects the amount actually paid by ...
What are the cures for the Closing Disclosure post consummation?
Events after consummation An event in connection with settlement occurs within 30 calendar days following consummation causing the Closing Disclosure to become inaccurate. ...
How about if the closing is re-scheduled, are there any circumstances which would allow sending a new Loan Estimate after the initial Closing Disclosure has been sent?
No. A revised Loan Estimate cannot be provided on or after the date the Closing Disclosure has been provided. Citation(s): Commentary ¶19(e)(4)(ii)-1
If redisclosure occurs after the closing disclosure has been mailed, for tolerance purposes, are the fees disclosed on the Closing Disclosure compared to the last compliant loan estimate provided or compared to the previous disclosed Closing Disclosure?
It depends on whether you have established a valid changed circumstance and done so within the time frame allowed for a revised Closing Disclosure (see comments below). In ...
If there is no tolerance on the Total Interest Percentage (TIP), does that mean if interim interest changes by a day or two a new Closing Disclosure would be required?
Revisions to the TIP is not an item which requires re-disclosure prior to consummation, so if the TIP requires revision it may be provided prior to or at the time of consummation. ...

Part 15: Other Disclosure Effects – Other than the Loan Estimate and Closing Disclosure

In the "Other Disclosures" section it states that the lender is required to give the borrower a copy of the appraisal at least 3 days before closing; what if the borrower waived this right? How would this be addressed?
The Appraisal statement “may” be omitted if it does not apply. So, when it is not required it can remain and does not have to be removed, however, if desired, it may be removed if it does not ap...
Are CHARM booklets needed for applications received on and after 10/3/2015? What about special information booklets?
Yes, both booklets will continue to be required as applicable to the appropriate transaction. For purposes of the Loan Estimate and Closing Disclosures, the Settlement Cost Booklet has been promulga...

Part 16: Miscellaneous Other Questions

There is constant regulation placed upon the lender/creditor, and with this the amount of time it takes to close a loan will be expanded. Is anything being done to educate Realtors in this regard? Almost every purchase has a Realtor demanding a less than 30 day close.
The National Association of Realtors, as well as other industry advocacy groups and service providers such as Ellie Mae have been providing available training in written form, webinars ...
Disclaimer: The above information is intended for general information purposes with the goal of assisting Ellie Mae’s customers in complying with the new KBYO regulations. This information is provided as a courtesy to Ellie Mae’s customers and Ellie Mae makes no representation or warranty regarding the accuracy of the information set forth herein, and you may not rely on this information to ensure your company’s compliance with the KBYO regulations. This FAQ should not be construed as legal advice or opinion on any specific facts or circumstances, including the application of the KBYO regulations. You are advised to consult your own compliance staff or attorney regarding your specific residential mortgage lending questions or situation to ensure your compliance with all applicable laws and regulations.

CFPB announcement regarding the delay of TRID

The Consumer Financial Protection Bureau is delaying until October 3, 2015, the effective date of the TILA-RESPA Final Rule and the related TILA-RESPA Amendments. In light of certain procedural requirements under the Congressional Review Act (CRA), the TILA- RESPA Final Rule and the TILA-RESPA Amendments cannot take effect on August 1, 2015, as originally provided by those rules. To comply with the CRA and to help ensure the smooth implementation of the TILA-RESPA Final Rule, the Bureau is extending the effective date of both the TILA-RESPA Final Rule and the TILA-RESPA Amendments beyond the additional minimum period required by the CRA to October 3, 2015, as proposed. The Bureau is also making certain technical amendments to the Official Interpretations of Regulation Z to reflect the new effective date and technical corrections to two provisions of Regulation Z adopted by the TILA-RESPA Final Rule.

The full statement from CFPB Director Richard Cordray can be viewed here

Popular KBYO questions

When do the new disclosures become effective and for which transactions? Part 1: Rule Applicability What happens in October when your final forms are new but initials are old? Part 4: Loan Estimate – Timing & Consumer Receipt For electronic delivery of disclosures, after a borrower agrees to accept electronic delivery in compliance with the ESIGN Act must all disclosures be sent through an ESIGN compliant system, or can a lender email a scanned copy of a document through normal email? Can the borrower return the document by email as an attachment? Part 3: Loan Estimate – Miscellaneous Questions If an application is received prior to October 3, 2015 and a Good Faith Estimate was provided to a consumer should a HUD-1 Settlement Statement and Final TIL Disclosure Statement or a Closing Disclosure be provided to the consumer when the consummation date is on or after October 3, 2015? Part 1: Rule Applicability Do you define “exempt” to mean we are not “allowed” to use the new forms or not “required” to use them? Can we send the new forms on a HELOC for example in lieu of the old? Can we use the new disclosures on all transactions? Part 1: Rule Applicability Can you confirm coops are excluded from the new disclosures since they are not secured by real property? Part 1: Rule Applicability Are transactions with 25 acres and more exempt? Part 1: Rule Applicability When can we start the new disclosures? Part 1: Rule Applicability What if no lender credits are decided until the loan closing, does a new Loan Estimate need to be provided to reflect this? Part 9: Revised Loan Estimate – Revisions/Re-Disclosure (including Timing & Delivery) If loan amount changes, then can the lender credits change? Part 9: Revised Loan Estimate – Revisions/Re-Disclosure (including Timing & Delivery)