Upload
nguyencong
View
213
Download
0
Embed Size (px)
Citation preview
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Loan Estimate (LE) TILA-RESPA Integrated Disclosure (TRID) Rule Requirements
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
• New Rule creates new definition of – Covered Loan – Loan Application – Consummation (Closing)
• New Rule creates new work flow – More documentation – Tighter time lines
• New Rule creates new forms – Loan Estimate – Closing Disclosure
New Definitions; New Forms New Work Flow
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
• No longer RESPA definition • All TILA and Regulation Z
– Loan to natural person (includes trusts) – Proceeds for personal, family of household use – Collateral is dwelling attached to land
• Includes 25 acres or more if above applies
Covered Loan
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Loan Application
Six pieces of information 1. Consumer’s name 2. Consumer’s monthly income 3. Consumer’s SSN 4. Property address 5. Estimate of property value 6. Loan amount sought
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Consummation
• The target date around which disclosure requirements revolve
• CFPB explains: – Commonly occurs at closing or settlement – Legally distinct event:
• “Occurs when the consumer becomes contractually obligated to the creditor on the loan”
• Lender will likely dictate the date of consummation
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
• Lender and Broker fees must be exact • All other fees quoted
– Including Homeowner Association Dues if known (example)
• Must be in Good Faith – Best information reasonably available to the
creditor – Obtained through due diligence
Accuracy of Disclosures
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Loan Estimate (LE) Provision
Provided to the consumer by: • Creditor/Lender • Mortgage broker Delivery • 3 business days after application • 7 business days before consummation • If mailed add 3 days for receipt
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY
16
17 18 19 Application Received Can be either creditor or broker 6 specific items
20 Customer can withdraw/Lender can reject Application
21 Customer can withdraw/Lender can reject Application
22 Lender is not open for customer facing business so Saturday does not count for Loan Estimate preparation
23 Sunday doesn’t count
24 Loan Estimate must be mailed or hand delivered If in hand= LE Delivery Date
25 LE Mail Day 1 Earliest Day Closing Disclosure can be mailed or delivered in hand If in hand= CD Delivery Date
26 LE Mail Day 2 CD Mail Day 1 CD In hand Disclosure Day 1
27 LE Mail Day 3= Delivery Date (presumed) CD Mail Day 2 CD In hand Disclosure Day 2
28 CD Mail Day 3= Delivery Date (presumed) CD in hand Disclosure Day 3
1 CD Mail Disclosure Day 1
2 Sunday doesn’t count
3 CD Mail Disclosure Day 2
4 CD Mail Disclosure Day 3= okay to close Earliest day for closing assuming LE mailed or delivered on 24th
5 6 7 8 LE expires
Application Timeline
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Page One
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
General
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Loan Terms & Projected Payments
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
• Refinance transaction – Includes check boxes From and To Borrower
Costs at Closing
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Page Two
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Loan Costs
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Other Costs
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Calculating Cash to Close
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Adjustable Payment (AP) Table
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Adjustable Interest Rate (AIR) Table
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Page Three
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Contact Information
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Other Considerations & Receipt
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Shopping Service Providers
• Can Shop For a settlement service, subject to reasonable requirements
• It’s NOT shopping for a provider when – Consumer is required to choose from a written
list of providers – OR – If consumer voluntarily chooses from a written
list of providers
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Revised Loan Estimate (LE)
• Six different types of changes 1. Changed circumstances affecting settlement
charges 2. Changed circumstances affecting eligibility 3. Revisions requested by consumer 4. Interest rate dependent changes 5. Loan Estimate expires 6. Delayed settlement date on a construction
loan
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
• If a Changed Circumstance/ Tolerance exceeded – However cannot be ‘piece-meal’ – Must be provided to consumer within three
business days of receiving information sufficient to establish the changed circumstance.
– Consumer must receive the revision no later than 4 days before closing
– May not issue after Closing Disclosure
Revised Disclosure-Loan Estimate
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
New Tolerances
Rule Expands zero tolerance group: • Amounts disclosed on the Loan Estimate for the following
services cannot increase (Zero Tolerance): 1. Transfer Taxes 2. Fees paid to the creditor or broker 3. Fees paid to an affiliate of the creditor or broker 4. Fees paid for services for which the lender or broker does not permit
the consumer to shop
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Tolerances
The 10% group: • Amounts disclosed on the Loan Estimate for the following
services cannot increase by more than 10 percent (aggregate):
1. Third Party Fees for services: – Required by the Lender – The Lender provides a written list – Where the Consumer may shop for the service provider, (not on
the list) and – The Consumer selects a provider from the Lender’s written list
of provider's
2. Recording Fees
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Tolerances
Unlimited Tolerance • Amounts disclosed on the Loan Estimate for the following services may
increase: 1. Prepaid Interest 2. Property Insurance Premiums 3. Amounts in Escrow 4. Third Party Fees for services:
– Required by the Lender – Where the Consumer may shop for the service provider, and – The Consumer selects a provider not on the Lender’s written list of provider's
5. Third Party Fees for services – Not required by the Lender – Even if paid to an affiliate
The creditor may still impose reasonable qualifications for providers.
– Example: Provider must be licensed
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Tolerances- summary Paid to the lender or mortgage broker
If required by the lender
Paid to a third party required to be used by the lender
Paid to a third party NOT required to be used by the lender, BUT on the lender’s list
The consumer selects a provider from the lender’s list
The consumer does not select a provider so the lender chooses
AND
If NOT required by the lender
Unlimited Tolerance
The consumer selects a provider NOT on the lenders’ list
Zero Tolerance
10% Tolerance
AND
©2015 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
• TILA ▫ Private right of action for violations (with attorney’s fees and costs)
▫ Statutory penalties of up to $4,000 for failures to properly provide certain disclosures (including finance charge and APR)
• RESPA ▫ No private right of action for GFE and HUD-1 disclosures
• Dodd-Frank ▫ CFPB enforcement of consumer financial laws (incl. TILA and RESPA)
▫ $5,000 per day per violation; $25,000 per day for reckless violations; $1M per day for knowing violations
Liability