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ABA BRIEFING | PARTICIPANT’S GUIDE

TRID Audit 5: Cash-to-Close and Loan Calculations

Tuesday, October 18, 2016 Eastern Time

2:00 p.m.–4:00 p.m. Central Time

1:00 p.m.–3:00 p.m. Mountain Time

12:00 p.m.–2:00p.m. Pacific Time

11:00 a.m.–1:00 p.m.

American Bankers Association TRID Audit Series TRID Audit 5: Cash-to-Close and Loan Calculations Tuesday, October 18, 2016 ▪ 2:00 – 4:00 p.m. ET

DISCLAIMER This Briefing/Webcast will be recorded with permission and is furnished for informational use only. Neither the speakers, contributors nor ABA is engaged in rendering legal nor other expert professional services, for which outside competent professionals should be sought. All statements and opinions contained herein are the sole opinion of the speakers and subject to change without notice. Receipt of this information constitutes your acceptance of these terms and conditions.

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Please call 1-800-BANKERS if you have any questions about this resource or ABA membership.


II

Table of Contents

TABLE OF CONTENTS ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II

SPEAKER & ABA STAFF LISTING ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III

SPEAKER BIOGRAPHY ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV

PROGRAM OUTLINE ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V

CONTINUING EDUCATION CREDITS INFORMATION ... . . . . . . . . . . . . . . . . . . . . . . . . VI

CPA SIGN-IN/SIGN-OUT SHEET ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII

INSTRUCTIONS FOR RECEIVING CERTIFICATES OF ATTENDANCE .. VIII

PROGRAM INFORMATION ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENCLOSED

PLEASE READ ALL ENCLOSED MATERIAL PRIOR TO BRIEFING. THANK YOU.

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III

Speaker and ABA Staff Listing

Speaker Patti Joyner Blenden, CRCM President and Founder Financial Solutions for Growing Companies, Inc. PO Box 159 Lake Lure, NC 28746 (843) 870-7725 [email protected]

ABA Briefing/Webcast Staff Cari Hearn Senior Manager (202) 663-5393 [email protected] Linda M. Shepard Senior Manager (202) 663-5499 [email protected]

American Bankers Association 1120 Connecticut Avenue, NW Washington, DC 20036 www.aba.com

mailto:[email protected]



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IV

Speaker Biography

PATTI JOYNER BLENDEN, CRCM Patti Joyner Blenden founded Financial Solutions in 1990 to provide community financial institutions with effective solutions for the ever increasing need for cost-effective regulatory risk management. The company provides compliance reviews, in-house training, compliance policy and procedure development and other special projects for bank clients. Patti firmly believes that community bank has very little to do with your asset size, but everything to do with your heart! Patti’s ability to transform complex requirements into simple, practical solutions is bound by a deep conviction that “excellence is not optional” which translates into effective answers for community bankers. She has a thorough understanding of the current regulatory environment and is able to integrate, streamline and automate related priorities without compromising compliance or performance. Ms. Blenden is a frequent presenter for the American Bankers Association where she serves as a faculty member of its prestigious Stonier Graduate School of Banking and National, Intermediate and Graduate Compliance Schools. Additionally, Patti partnered with Lucy Griffin in the fall of 2013 to develop and deliver a four-part ABA briefing/webcast series on the new mortgage requirements which took effect in January 2014. She also works extensively with many state and regional banking associations, has been an invited speaker for various State and Federal regulatory agencies, and law enforcement agencies. In addition, Patti speaks at many national and state compliance seminars, schools and conferences, conducts in-bank training and is a published compliance resource. Patti has a B.S. degree in Accounting from Louisiana Tech University, has over 35 years of banking experience. She is a Certified Regulatory Compliance Manager (CRCM).


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PROGRAM OUTLINE TIMES SESSION AND SPEAKERS

1:45 – 2:00 p.m. ET

Pre-Seminar Countdown

2:00 – 2:02 p.m.

Welcome and Speaker Introduction 1Source International

2:02 – 2:05 p.m.

Opening Comments Patti Blenden, CRCM Financial Solutions for Growing Companies, Inc.

2:05 – 2:15 p.m.

Summaries of Transactions

2:15 – 2:45 p.m.

Calculating Cash-to-Close

2:45 – 3:00 p.m.

Alternative Cash-to-Close

3:00 – 3:10 p.m.

Payoffs and Payments

3:10 – 3:15 p.m.

Loan Calculations

3:15 – 3:25 p.m.

Total of Payments

3:25 – 3:35 p.m.

Finance Charge

3:35 – 3:40 p.m.

Amount Financed

3:40 – 3:45 p.m.

Annual Percentage Rate (APR)

3:45 – 3:55 p.m.

Total Interest Percentage (TIP)

3:55 – 4:00 p.m.

Closing Issues Questions and Answers


VI

Continuing Education Credits Information

The Institute of Certified Bankers™ (ICB) is dedicated to promoting the highest standards of performance and ethics within the financial services industry.

The ABA Briefing/Webcast, “TRID Audit 5: Cash-to-Close and Loan

Calculations” has been reviewed and approved for 2.5 continuing education credits towards the CRCM designation.

To claim these continuing education credits, ICB members should visit the Member Services page of the ICB

Website at http://www.icbmembers.org/login.aspx. You will need your member ID and password to access your personal information. If you have difficulty accessing the Website and/or do not recall your member ID and

password, please contact ICB at [email protected] or 202-663-5092.

American Bankers Association is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org.

2.0 CPE credit hours (Management Advisory Services) will be

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VII

CPA Required Sign-in/Sign-out Sheet

CPAs may receive up to 2.0 hours of Continuing Professional Education (CPE) credit for participating in this group-live Briefing/Webcast.

INSTRUCTIONS: 1. Each participating CPA must sign-in when he/she enters the room and sign-out when he/she

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Form (instructions found on page VIII). 5. Individuals who do not complete both forms and submit them to ABA will not receive their

Certificate of Completion.

This CPE Sign In/Out Sheet must be scanned and uploaded with the CPE / CPA Request for

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American Bankers Association is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org.

Please note: CPE credits are ONLY awarded to those who have listened to the live broadcast of this Briefing/Webcast.

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VIII

Instructions for Receiving Certificates of Attendance

CPA/CPE Certificate of Attendance

Submission of a sign-in/sign-out sheet AND electronic request for a certificate of attendance are required for the validation process to be completed.

NASBA requires ABA to validate your attendance BEFORE

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ABA TRID Audit Briefing ‐ Part 5: TRID Calculating Cash to Close & Loan Calculations

ABA: TRID Audit Part 5 – October 18, 2016

aba.com 1-800-BANKERS

TRID Audit Briefing Part 5: Cash to Close & Loan Calculations

ABA Briefing Tuesday, October 18, 20162:00 – 4:00 p.m. ET


Disclaimer

This Briefing will be recorded with permission and is furnishedfor informational use only. Neither the speakers, contributorsnor ABA is engaged in rendering legal nor other expertprofessional services, for which outside competentprofessionals should be sought. All statements and opinionscontained herein are the sole opinion of the speakers andsubject to change without notice. Receipt of this informationconstitutes your acceptance of these terms and conditions.

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Presenter

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Patti Joyner Blenden, CRCMPresident and Founder Financial Solutions for Growing Companies, Inc.

http://www.finsolinc.com/pattib.htmhttp://www.finsolinc.com/compliancetools.htm


Agenda

• Opening Comments

• Summaries of Transactions

• Calculating Cash to Close

• Alternative Cash to Close

• Payoffs and Payments

• Loan Calculations – Total of Payments

– Finance Charge

– Amount Financed

– Annual Percentage Rate (APR)

– Total Interest Percentage (TIP)

• Closing Comments

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CFPB Proposed TRID Amendments

• Anywhere you see this image throughout the presentation, reference is made to key provisions of the July 2016 proposed amendments that are not yet final.

• We have tried to point out the areas where the proposal clarifies or formalizes guidance informally provided by the CFPB through webinars or other outlets

• CFPB stated in the preamble that it expects to issue final rule by April 1, 2017. An implementation period of 4 months was proposed for the final rule. – Leaves us with a potential effective date of August 1, 2017

– Military Lending Act credit card rules are effective October 3, 2018

– Don’t forget that new HMDA data collection begins January 1, 2018

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TRID Audit ChallengeCalculating Cash to Close

• Calculating Cash to Close should accurately reflect the amount of cash the consumer should bring to the closing table. Many of the forced calculations (always report as a positive number, etc.) ignored the possibility of real life scenarios frequently encountered.

• CFPB has proposed many revisions that will accommodate actual scenarios. This will be a big improvement.

• To understand Cash to Close, you must first understand the Summaries of Transactions that is on the bottom of CD page 3. – If using the Alternative Cash to Close (no seller), refer to the Payoffs and

Payments table instead of a Summaries of Transactions.

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Summaries of Transactions (Page 3)

• Disclose the transaction amounts and closing costs. Distribute between the consumer and the seller to equal the amounts due from or payable to the consumer and seller at closing.

• Separate CD can be provided to the consumer and seller that do not reflect the other party’s costs and credits by omitting certain disclosures on each separate CD.

• The Seller’s column is omitted for refinances or other transactions without a Seller.

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• Two unique areas that are very important to Calculating Cash to Close amount for the borrower

– Due from Borrower at Closing• Adjustments

• Adjustments for Items Paid by Seller in Advance

– Paid Already By or on Behalf of Borrower at Closing• Adjustments

• Adjustments for Items Unpaid by Seller

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Summaries of Transactions: Adjustments

• Adjustments Due From the Borrower are disclosed in 2 places on the Summary.

• First, borrower-owed amounts that are neither disclosed on the CD page 2 nor specifically disclosed as Due From Borrower at Closing. – Example items include rent collected by the consumer after closing

for Seller’s interim rent or balance in a seller’s reserve account transferred to consumer in conjunction with assumed loan.

• Second, additional adjustments are disclosed along with the time-period associated with the adjustment item. – Examples include taxes paid in advance for an entire year, flood or

hazard insurance premiums when Borrower is being substituted for the Seller with an assumed loan, fuel or other supplies on hand purchased by the Seller which the Borrower will use upon taking possession of the property.

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Summaries of Transactions: Adjustments

• Adjustments Paid by or on Behalf of the Borrower are disclosed in 2 places on the Summary.

• First, borrower-owed amounts that are neither disclosed on the CD page 2 nor specifically disclosed as Due From Borrower at Closing. – Example items include rent paid by the consumer after closing for Seller’s

interim rent or balance in a seller’s reserve account transferred to consumer in conjunction with assumed loan.

• Second, additional adjustments are disclosed along with the time-period associated with the adjustment item. – Examples include unpaid taxes due from the seller to reimburse the

consumer for city/town, county or other taxes; or description of items not yet paid and the consumer is expected to pay after real estate closing, but which are attributable in part to a period of time prior to closing.

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Calculating Cash to Close Table

Standard Table (with or without a Seller)

Alternative Table (only without a Seller)

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Examples include Refinances, Construction-only where customer already owns land, etc.

Examples include Purchases, Constructionloans where land is being purchased, too, etc.

“Notably, the amounts disclosed in the calculating cash to close table are not subject to the specific tolerances under §1026.19(e)(3) or §1026.22(a).” CFPB Proposal p. 89



Calculating Cash to Close (CD Page 3)

• The table includes 9 line items and 3 descriptive columns per item: LE estimated amount rounded to nearest dollar, final amount and a statement of whether the item changed or not. If YES, indicate where the consumer can find details about the changed items.

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Note that this amount matches the calculation at bottom of Summaries of Transactions.

Only new line item in the CD’s Calculating Cash to Close

CD Alternative Calculating Cash to CloseLender Credit Required for Excess > Legal Limit

• When the Final CD costs exceed the legal limit (variations) compared to the LE, the table must include a statement identifying the increase that must be cured by a Lender Credit.

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Example of Alternative Cash to Close table, accompanied by a Payoffs and Payments table.




Calculating Cash to CloseTotal Closing Costs

• Total amount from page 2 of the Loan Estimate

• Sum ofLoan Costs (D)

+ Other Costs (I)– Lender Credits = Total Closing Costs

1 - Total Closing Costs (J)

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Total Closing Costs

• Lender credits are netted against total Closing Costs when calculating Cash-to-Close.

• Creditors must use Lender Credits to provide a refund for an amount that exceeds the limitations on increases in closing costs under §1026.19(e)(3).

• Some contractual or other legal obligations of the creditor, such as the requirements of a government loan program or the purchase criteria of an investor, may prohibit refunding cash to the consumer as Lender Credits.

• The CFPB proposed providing options for the disclosure of principal curtailments to provide refunds related to the good faith analysis. The disclosure would contain a statement conveying that the disclosed amount includes a refund for an amount that exceeds the limitations on increases in closing costs.

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LE Calculating Cash to CloseClosing Costs Financed

• This is a calculated field.

• On standard version with a Seller, cost is always a negative number or $0.

• Sum ofLoan Amount (face amount of note)

- Payments to 3rd Parties Not Disclosed

in Total Closing Costs

= Closing Costs Financed (Paid from your Loan Amount)

2 - Closing Costs Financed (Paid from your Loan Amount)

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TIP: Think of this category as more than closing costs, it includes other third party payments that were not included in closing costs!


Calculating Cash to CloseClosing Costs Financed (Paid from Your Loan Amount)

• Closing Costs Financed (Paid from Your Loan Amount) is calculated by subtracting the estimated total amount of payments to third parties not otherwise disclosed in the Loan Costs and Other Costs tables from the Loan Amount.

• Loan Amount - Payments to 3rd Parties Not Disclosed in Total Closing Costs = Closing Costs Financed (Paid from your Loan Amount)

– Examples of Payments to 3rd Parties Not Disclosed in Total Closing Costs

• Sales Price in a purchase transaction

• Construction Contract in a Construction Loan

• Tax lien for delinquent state, federal or other taxes

• Credit card debt or other loans paid off

• If the result of the calculation is a positive number, Closing Costs Financed (Paid from Your Loan Amount) is that amount, disclosed as a negative number, but only to the extent that it does not exceed the amount of Total Closing Costs.

• If the result of the calculation is zero or negative, then Closing Costs Financed(paid from Your Loan Amount) is disclosed as $0.

– (Comment 37(h)(1)(ii)-1)

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Closing Costs Financed

• Proposed comments 37(h)(1)(ii)-2 and 38(i)(3)-2 would clarify that the Loan Amount used in this calculation would not be reduced by amount of financed mortgage insurance premiums.

• Additionally, CFPB proposes additional comment to clarify that the calculation subtracts the total amount of third party payments not disclosed as Closing Costs. – A positive number is disclosed as a negative number, but only up

to the amount of closing costs disclosed under 1026.38(h)(1).

– A negative number is disclosed as $0.00.

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Closing Costs Details (CD Page 2)

• Comprised of the same 3 parts as its LE counterpart– Loan Costs

– Other Costs

– Total Closing Costs • [(Loan Costs + Other Costs) +/- Lender Credits

• Disclose amounts paid by the Consumer, the Seller and any other third parties in the appropriate column – Be sure to tie back the distribution of payments to file

documentation!

• Portions of fees paid by different parties (both at and before closing) must be entered in multiple columns to accurately reflect who paid which costs and impacts Cash to Close.

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CD Page 2 – Loan Costs

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Notice no subtotals for Sellers & Others!

CD Page 2: Other Costs

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Paid by consumer before the first scheduled payment

Taxes paid at separate times can be disclosed separately. Comply with RESPA if it is applicable.

RESPA’s Aggregate Adjustment



aba.com 1-800-BANKERS 23


Calculating Cash to CloseDown Payment / Funds from Borrower

• In a Purchase transaction, Down Payment/Funds from Borrower is the difference between the purchase price of the property and the principal amount of the loan, disclosed as a positive number. (§ 1026.37(h)(1)(iii)(A))

– Purchase Price – Loan Amount = Down Payment

• When the loan amount exceeds the purchase price of the property, disclose $0 as Down Payment/Funds from Borrower. (Comment 37(h)(1)(iii)-1)

– Loan Amount > Purchase Price = $ 0

– Cash back to Borrower or 3rd Party

3 – Down Payment/Funds from Borrower

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NOTE: This original calculation does not account for transactions where the Loan Amount is greater than the Sales Price in Purchase transactions. The CFPB Proposal addresses this.




Calculating Cash to Close: Down Payment/Funds from Borrower

• Purchase Transactions (Construction Loans with Land Purchase)

• Down Payment/Funds from Borrower is the difference between the purchase price of the property and the principal amount of the loan, disclosed as a positive number. (§1026.37(h)(1)(iii)(A))

– Purchase Price – Loan Amount = Down Payment

• When the loan amount exceeds the purchase price of the property, disclose $0 as Down Payment/Funds from Borrower. (Comment 37(h)(1)(iii)-1)

– Loan Amount > Purchase Price = $ 0

– Cash back to Borrower or 3rd Party

• All Other Transactions (Refinances, Cash Out Refinances, etc.)

• Subtract the principal amount of credit extended (excluding any amount disclosed as Closing Costs Financed (Paid from Your Loan Amount)) from the total amount of all existing debt being satisfied in the transaction. When this calculation yields an amount that is positive, Down Payment/Funds from Borrower is that amount.

– Total Amount of All Existing Debt Satisfied – [Loan Amount – Closing Costs Financed]

– If the calculation yields a result that is negative or $0, Down Payment/Funds from Borrower is $0. (§1026.37(h)(1) (iii)(B))

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Down Payment/Funds from BorrowerFunds for Borrower

• Treatment of Assumptions in the Down Payment calculation was clarified by the CFPB proposals. Subtract the sum of the Loan Amount and any assumed loans from the Sale Price to calculate Down Payment.

• To accommodate transactions such as when loan amount exceeds sales price, the CFPB’s proposal would revise the calculation such that:– If result is a positive number, disclose under Down

Payment/Funds from Borrower– If result is a negative number, disclose under Funds for Borrower– If result is zero, disclose in both “Funds From” and “Funds For”

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Down Payment Calculation

• The Down Payment is calculated as the difference between the sale price of the property and the sum of the loan amount and any amount of existing loans assumed or taken subject to that will be disclosed on the Closing Disclosure.

• Minimum cash investments required of consumers under some loan programs are not necessarily reflected, and accurate disclosure of the down payment under §1026.37(h)(1)(iii)(A)(1) does not affect compliance or non-compliance with such loan programs’ requirements.

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Calculating Cash to CloseDeposit

• In a Purchase transaction, Deposit is the amount, disclosed as a negative number, that is paid to the seller or held in trust or escrow by an attorney or other party under the terms of the contract for sale of the property. (§1026.37(h)(1)(iv)(A))

• All other transactions, Deposit is $0. (§ 1026.37(h)(1)(iv)(B))

• Refer to Summaries of Transactions for this number in the “Paid Already by or on Behalf of Borrower at Closing”

4 – Deposit (e.g. Earnest money)

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Calculating Cash to CloseFunds for Borrower

• In a Purchase transaction, Funds for Borrower is $0 when a Down Payment. (Comment 37(h)(1)(v)-1)

– Refinance with Cash Out Negative or $ 0 amount

• In all other transactions, subtract the principal amount of debt extended (excluding any amount disclosed as Closing Costs Financed (Paid from Your Loan Amount)) from the total amount of all existing debt being satisfied in the transaction.

– Total Amount of Debt Satisfied - [Loan Amount –Closing Costs Financed]

• If calculation yields a negative amount, then Funds for Borrower is that amount.

• If the calculation yields a positive amount or $0, then Funds for Borrower is $0. (§1026.37(h)(1)(v))

5 – Funds for Borrower

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Calculating Cash to CloseSeller Credits

• Seller Credits is the total amount that the seller will pay for items included in the Loan Costs and Other Costs tables, to the extent known, disclosed as a negative number.

• (§1026.37(h)(1)(vi))

6 – Seller Credits

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Seller Credits

• Seller credits for specific charges. To the extent known by the creditor at the time of delivery of the Loan Estimate, specific seller credits, i.e., seller credits for specific items disclosed as Loan Costs or Other Costs, may be either disclosed under Seller Credits or reflected in the amounts disclosed for those specific items as Loan Costs or Other Costs.

– For example, if the creditor knows at the time of the delivery of the Loan Estimate that the seller has agreed to pay half of a $100 required pest inspection fee, the creditor may either disclose the required pest inspection fee as $100 under § 1026.37(f) with a $50 seller credit disclosed under § 1026.37(h)(1)(vi) or disclose the required pest inspection fee as $50 under § 1026.37(f), reflecting the specific seller credit in the amount disclosed for the pest inspection fee.

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Calculating Cash to CloseAdjustments and Other Credits

• Adjustments and Other Credits is the total amount of all items in the Loan Costs and Other Costs tables that are paid by persons other than the loan originator, creditor, consumer, or seller, together with any other amounts that are required to be paid by the consumer at closing pursuant to the contract of sale (if any), disclosed as a negative number.

• (§1026.37(h)(1)(vii))

7 – Adjustments and Other Credits

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Adjustments and Other Credits

• Total amount of all items in the Loan Costs and Other Costs tables that are paid by persons other than the loan originator, creditor, consumer, or seller

– Gifts from family members, and

– Credits from home builder or developer for items in Loan Costs and Other Costs table. (Comment 37(h)(1)(vii)-1 & -2)

– Funds provided to the consumer from the proceeds of subordinate financing, local or State housing assistance grants, or other similar sources. (Comment 37(h)(1)(vii)-5)

– LESS

• Adjustments - Other amounts paid by the consumer at closing per sale contract. Adjustment and Other Credits is reduced by any such additional charges. (Comment 38(h)(1)(vii)-6)

– Personal property purchased by the consumer from the seller

– Property taxes or homeowner’s association dues prorated to consumer

– Delinquent taxes to be paid by the borrower

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Adjustments and Other Credits

• Original calculation assumes that the amount required to be paid by the consumer at consummation pursuant to a purchase and sale contract will be greater than the amount of credits, which, the Bureau understands, may not always be the case. Therefore, the Bureau is proposing to revise §1026.37(h)(1)(vii) to eliminate the requirement that the amount disclosed be a negative number and to make corresponding revisions to comment 37(h)(1)(vii)-6.

• The Bureau is also proposing to revise – Comment 37(h)(1)(vii)-1 to clarify that amounts expected to be provided to

consumers in advance of consummation are not required to be disclosed,

– Comment 37(h)(1)(vii)-5 to clarify that subordinate financing must be disclosed on the first-lien transaction Loan Estimate, and

– Comment 37(h)(1)(vii)-6 to clarify what amounts are included in the adjustments and other credits calculation under §1026.37(h)(1)(vii).

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TRID Audit ChallengeAlternative Cash to Close

• If the creditor elected to use the Alternative Cash to Close option for transactions not involving a seller, you must be consistent from beginning to the end of the transaction!

• Don’t start using the Cash to Close tables and decide at Closing that you will use the Alternative tables!

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Transactions With Seller Mandatory to Use These Forms

Transactions Without SellerOptional to Use Alternate Forms

Costs at Closing – Page 1Costs at Closing – Page 1

(Includes □ From □ To Borrower)

Calculating Cash to CloseAlternative Calculating

Cash to Close

Summaries of Transactions Payoffs and Payments


Alternative Costs at Closing

• The Alternative version is for transactions without a seller and is disclosed at bottom of page 1.

• Use this version including the check boxes to indicate whether the amount of cash is due from or to the Borrower.

• Must also use the Alternative Calculating Cash to Close table and the Payoffs and Payments table on page 3.

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Alternative Calculating Cash to Close Table Transactions Without a Seller [Refinance]

• This Alternative Calculating Cash to Close table replaces the Standard Table General Method (§1026.37(h)(2))

• A creditor that uses the optional Alternative Calculating Cash to Close table must also use the alternative disclosure provisions of the Alternative Costs at Closing table on Loan Estimate page 1. (Comment 37(h)(2)-1)

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Alternative Calculating Cash to CloseTotal Closing Costs

• Total Closing Costs disclosed under §1026.38(e)(2)(ii) reflect an amount owed by the consumer. The TRID rules mandated that the total closing costs be disclosed as a negative number.

• In reality, Lender Credits under may sometimes exceed the subtotal of closing costs, resulting in a net credit to the consumer. In that case, the Total Closing Costs should be disclosed as a positive number, to reflect the expected benefit to the consumer.

• The CFPB has proposed revisions to facilitate correct treatment– If Lender Credits exceed closing costs and results in a refund to the borrower,

disclose Total Closing Costs as a negative amount on the Cash to Close –No cash needed from borrower to cover closing costs.

– If Lender Credits don’t exceed closing costs, disclose Total Closing Costs as a positive amount on the Cash to Close – Cash needed from borrower to cover closing costs.

38



39


Alternative Calculating Cash to CloseEstimated Total Payoffs and Payments

• Estimated Total Payoffs and Payments total amounts to be paid to third parties not otherwise disclosed as items in the Loan Costs or Other Costs tables, disclosed as a negative number. (§ 1026.37(h)(2)(iii))

• Examples can include:– Payoffs of existing liens secured by the property such as mortgages, deeds of trust,

judgments that have attached to the property,

– Mechanics’ and materialmans’ liens,

– Local, State, and Federal tax liens,

– Payments of unsecured outstanding debts of the consumer, and

– Payments to other third parties for outstanding debts of the consumer as required to be paid as a condition for the extension of credit. (Comment 37(h)(2)(iii)-1)

• Payments to the builder for constructing the home

40




Payoffs and Payments

• The CFPB proposed comment 38(t)(5)(vii)(B)‐1 to clarify that amounts paid by third parties who provide funds on behalf of the consumer can be disclosed as credits in the Payoffs and Payments table using negative numbers. – Examples of such amounts includes, but is not limited to, “gift

funds, grants, and proceeds from loans exempt under 1026.3(h).”

• On the Closing Disclosure for a first-lien transaction that also has a simultaneous loan for subordinate financing, the proceeds of the subordinate financing are included in the payoffs and payments table as a negative number.

41


Alternative Calculating Cash to ClosePayoffs and Payments

• Section 1026.38(e)(4)(ii) currently mandates that the total amount of payoffs and payments made to third parties disclosed to the extent known, is always disclosed as a negative number.

• The mandate to always disclose as a negative number assumes the net Payoffs and Payments amount will always be a positive number. The CFPB has proposed revisions to allow for the disclosure of a negative or positive amount, based on the facts and circumstances of the transaction.

42




Alternative Calculating Cash to Close Table Transactions Without a Seller [Refinance]

• This Alternative Calculating Cash to Close table replaces the Standard Table General Method (§1026.37(h)(2))

• A creditor that uses the optional Alternative Calculating Cash to Close table must also use the alternative disclosure provisions of the Alternative Costs at Closing table on Loan Estimate page 1. (Comment 37(h)(2)-1)

43


Alternative Calculating Cash to Close: Closing Costs Financed• Sum of Loan Amount LESS Payoffs and Payments

• BUT, only to the extent the amount is > $0 and < sum of Total Closing Costs. (§1026.37(h)(2)(v))

44

Example 1 Example 2 Example 3

Loan Amount * + $ 100,000 + $ 100,000 + $ 100,000

Payoffs and Payments - $ 80,000 - $ 95,000 - $ 110,000

Net Amount Available to Cover Closing Costs

$20,000 $5,000 ($ 10,000)

Total Closing Costs + $ 10,000 + $ 10,000 + $ 10,000

Closing Costs Financed $ 10,000 $ 5,000 $ 0

* Face amount of the note.



Loan Calculations (Page 5)

• Key Disclosures that are important to the accuracy of your disclosures

45

§ 1026.38(o))


Total of Payments

• Total the consumer will have paid after all scheduled payments of:– Principal,

– Interest,

– Mortgage insurance, and

– Loan costs (ONLY those paid by the borrower).

• Comment 38(o)(1)-1 explains that the Total of Payments is calculated like the LE’s “In 5 Years” disclosure, except that the ToP amount reflects the total payments through the end of the loan term and excludes charges for loan costs designated on the Closing Disclosure as paid by seller or paid by others. (includes clarifying language in proposal)

46




TRID Audit ChallengeTotal of Payments

• There has been a lot of industry concern over the fact that Loan Costs includes items that are and are not Finance Charges. Additionally, some Finance Charges are not included if they are not 1 of the 4 components above. Confusing!

• The ToP disclosure is a material TILA disclosure for liability purposes and is therefore very important! CFPB clarified it believes the Finance Charge tolerances should continue to apply to the Total of Payments disclosure since it is impacted by the Finance Charge.

• Proposed clarifying comment revisions are intended to ensure application of the accuracy tolerance to the Total of Payments as a whole, rather than to various components.

• Additional clarifications proposed state that specific credits (paid by lender, seller, others) are included in the ToP calculation. General credits, which the proposal will now allow on the CD, are NOT included in the ToP calculation.

47


Total of Payments Tolerance

• Continued industry confusion led the CFPB to propose a specific tolerance for the Total of Payments, including a tolerance for rescission during foreclosure purposes.

• Proposing a comment to clarify that the Finance Charge and the Total of Payments tolerances are separate and operate independently.– In other words, Loan Costs that are not finance charges can be

understated making the Total of Payments inaccurate, but the Finance Charge remains accurate.

48




Total of Payments ToleranceRegular and Certain Refinances

• The CFPB proposed to disclose that it is accurate if it is:– Understated by no more than the greater of ½ of 1% of loan or $100; or

– Is greater than the amount required to be disclosed (overstated).

• Tolerance for a Refinance meeting these conditions:– Not a Section 32 (HOEPA/HCML) loan

– New creditor

– No new advance, and

– No consolidation of existing loans.

• The qualifying Refinance would be accurate if it is:– Understated by no more than the greater of 1% of loan or $100; or


49


Total of Payments Foreclosure Rescission Tolerance

• CFPB has proposed revisions to provide that the existing rescission tolerances for the finance charge and disclosures impacted by the finance charge also apply to the Total of Payments in its entirety.

– Understated by no more than $35, or


50




Rescission Right in ForeclosureSpecial Tests for Accuracy

• §1026.23(h) Special rules for foreclosures.

• (1) Right to rescind. After the initiation of foreclosure on the consumer's principal dwelling that secures the credit obligation, the consumer shall have the right to rescind the transaction if:

i. A mortgage broker fee that should have been included in the finance charge was not included; or

ii. The creditor did not provide the properly completed appropriate model form in Appendix H of this part, or a substantially similar notice of rescission.

• (2) Tolerance for disclosures. After the initiation of foreclosure on the consumer's principal dwelling that secures the credit obligation, the finance charge and other disclosures affected by the finance charge (such as the amount financed and the annual percentage rate) shall be considered accurate for purposes of this section if the disclosed finance charge:

i. Is understated by no more than $35; orii. Is greater than the amount required to be disclosed.

51


Finance Charge (§1026.4)

• The finance charge is a measure of the cost of consumer credit represented in dollars and cents. Along with APR disclosures, the disclosure of the finance charge is central to the uniform credit cost disclosure envisioned by the TILA.

• The finance charge does not include any charge of a type payable in a comparable cash transaction. Examples of charges payable in a comparable cash transaction may include taxes, title, license fees, or registration fees paid in connection with an automobile purchase.

• Finance charges include any charges or fees payable directly or indirectly by the consumer and imposed directly or indirectly by the financial institution either as an incident to or as a condition of an extension of consumer credit. The finance charge on a loan always includes any interest charges and often, other charges.

52

“Cost of Credit”




Commentary 38(o) Loan Calculations

• 1. Examples. Section 1026.38(o)(1) and (2) sets forth the accuracy requirements for the total of payments and the finance charge, respectively. The following examples illustrate the interaction of these provisions:

• i. Assume that loan costs that are designated borrower-paid at or before closing and that are part of the finance charge (see §1026.4 for calculation of the finance charge) are understated by more than $100.

• For example, assume that borrower-paid loan origination fees (see §1026.4(a)) are cumulatively understated by $150, resulting in the amounts disclosed as the total of payments and the finance charge both being understated by more than $100.

• Both the disclosed total of payments and the disclosed finance charge would not be accurate for purposes of § 1026.38(o)(1) and (2), respectively.

53


Commentary 38(o) Loan Calculations

• 1. Examples. Section 1026.38(o)(1) and (2) sets forth the accuracy requirements for the total of payments and the finance charge, respectively. The following examples illustrate the interaction of these provisions:

• …

• ii. Assume that loan costs that are designated borrower-paid at or before closing and that are not part of the finance charge are understated by more than $100.

• For example, assume that borrower-paid property appraisal and inspection fees that are excluded from the finance charge under §1026.4(c)(7)(iv) are cumulatively understated by $150, resulting in the amount disclosed as the total of payments being understated by more than $100.

• The disclosed total of payments would not be accurate for purposes of §1026.38(o)(1), but the disclosed finance charge would be accurate for purposes of §1026.38(o)(2).

54




Amount Financed

• The amount financed is the net amount of credit extended for the consumer’s use. It should not be assumed that the amount financed under the regulation is equivalent to the note amount, proceeds, or principal amount of the loan.

– Amount financed normally equals the total of payments less the finance charge

• To calculate the amount financed, all transaction amounts and charges, paid separately or included in note amount, must first be identified. Then calculate any prepaid, precomputed, or other finance charge.

• The amount financed must not include any finance charges. If finance charges have been included in the obligation (either prepaid or precomputed), they must be subtracted from the face amount of the obligation when determining the amount financed. The resulting value must be reduced further by an amount equal to any prepaid finance charge paid separately. The final resulting value is the amount financed.

55


Amount Financed

• When calculating the amount financed, finance charges (whether in the note amount or paid separately) should not be subtracted more than once from the total amount of an obligation.

• Charges not in the note amount and not included in the finance charge (e.g., an appraisal fee paid separately in cash on a real estate loan) must not be included in the amount financed.

• The amount financed is not necessarily equivalent to the loan amount.

• For example, if the consumer must pay at closing a separate 1% loan origination fee (prepaid finance charge) on a $100,000 residential mortgage loan, the loan amount is $100,000, but the amount financed would be $100,000 less the $1,000 loan fee, or $99,000.

56




Annual Percentage Rate

• The APR is the percentage representation of the Finance Charge that was expressed as $$$

– Disclose the APR, together with a brief descriptive statement, in CD’s Loan Calculations.

• TRID rule made no changes to APR calculation or its tolerance!

• The CD’s APR should be updated from the amounts disclosed on the Loan Estimate to reflect the final terms of the legal obligation at consummation.

57


Total Interest Percentage (TIP)

• The TIP is the total amount of interest that the consumer will pay over the loan term, expressed as a percentage of the loan amount. (§1026.37(l)(3))

• For example, if the Loan Amount is $100,000 and the total amount of interest that the consumer will pay over the Loan Term is $50,000, then the TIP is 50%.

• The CD’s TIP amount should be updated from the amounts disclosed on the Loan Estimate to reflect the terms of the legal obligation at consummation.

– The CFPB proposed to amend Comment 37(l)(3)-1 to clarify that prepaid interestis included in the TIP.

58



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TRID Cash to Close & Loan Calculations

TRID Audit Briefing - Part 5 Toolkit

Tuesday, October 18, 2016

ABA TRID Audit Briefing 5 Toolkit - Page 1

FEBRUARY 7, 2014

H-25(B) Mortgage Loan Transaction Closing Disclosure – Fixed RateLoan Sample

TILA RESPA Integrated Disclosure

This is a sample of a completed Closing Disclosure for the fixed rate loan illustrated by form H-24(B). The purpose, product, sale price, loan amount, loan term, and interest rate have not changed from the estimates provided on the Loan Estimate. The creditor requires an escrow account and that the consumer pay for private mortgage insurance for the transaction.


Projected Payments

Loan Terms Can this amount increase after closing?

Loan Amount $162,000 NO

Interest Rate 3.875% NO

Monthly Principal & InterestSee Projected Payments below for your Estimated Total Monthly Payment

$761.78 NO

Does the loan have these features?

Prepayment Penalty YES • As high as $3,240 if you pay off the loan during the first 2 years

Balloon Payment NO

Costs at Closing

CLOSING DISCLOSURE PAGE 1 OF 5 • LOAN ID # 123456789

Payment Calculation Years 1-7 Years 8-30

Principal & Interest

Mortgage Insurance

Estimated EscrowAmount can increase over time

$761.78

+ 82.35

+ 206.13

$761.78

+ —

+ 206.13

Estimated Total Monthly Payment $1,050.26 $967.91

Estimated Taxes, Insurance & AssessmentsAmount can increase over timeSee page 4 for details

$356.13a month

See Escrow Account on page 4 for details. You must pay for other property costs separately.

This estimate includes In escrow?x Property Taxes YESx Homeowner’s Insurance YESx Other: Homeowner’s Association Dues NO

Closing Costs $9,712.10 Includes $4,694.05 in Loan Costs + $5,018.05 in Other Costs – $0in Lender Credits. See page 2 for details.

Cash to Close $14,147.26 Includes Closing Costs. See Calculating Cash to Close on page 3 for details.

Transaction InformationBorrower Michael Jones and Mary Stone

123 Anywhere StreetAnytown, ST 12345

Seller Steve Cole and Amy Doe321 Somewhere DriveAnytown, ST 12345

Lender Ficus Bank

Loan InformationLoan Term 30 yearsPurpose PurchaseProduct Fixed Rate

Loan Type x Conventional FHA VA _____________

Loan ID # 123456789MIC # 000654321

Closing InformationDate Issued 4/15/2013Closing Date 4/15/2013Disbursement Date 4/15/2013Settlement Agent Epsilon Title Co.File # 12-3456Property 456 Somewhere Ave

Anytown, ST 12345 Sale Price $180,000

This form is a statement of final loan terms and closing costs. Compare this document with your Loan Estimate.Closing Disclosure


Borrower-Paid Seller-Paid Paid by OthersAt Closing Before Closing At Closing Before Closing

A. Origination Charges $1,802.0001 0.25 % of Loan Amount (Points) $405.0002 Application Fee $300.0003 Underwriting Fee $1,097.0004 05 06 07 08 B. Services Borrower Did Not Shop For $236.5501 Appraisal Fee to John Smith Appraisers Inc. $405.0002 Credit Report Fee to Information Inc. $29.8003 Flood Determination Fee to Info Co. $20.0004 Flood Monitoring Fee to Info Co. $31.7505 Tax Monitoring Fee to Info Co. $75.0006 Tax Status Research Fee to Info Co. $80.0007 08 09 10 C. Services Borrower Did Shop For $2,655.5001 Pest Inspection Fee to Pests Co. $120.5002 Survey Fee to Surveys Co. $85.0003 Title – Insurance Binder to Epsilon Title Co. $650.0004 Title – Lender’s Title Insurance to Epsilon Title Co. $500.0005 Title – Settlement Agent Fee to Epsilon Title Co. $500.0006 Title – Title Search to Epsilon Title Co. $800.0007 08 D. TOTAL LOAN COSTS (Borrower-Paid) $4,694.05Loan Costs Subtotals (A + B + C) $4,664.25 $29.80

Loan Costs


J. TOTAL CLOSING COSTS (Borrower-Paid) $9,712.10Closing Costs Subtotals (D + I) $9,682.30 $29.80 $12,800.00 $750.00 $405.00Lender Credits

Closing Cost Details

Other CostsE. Taxes and Other Government Fees $85.0001 Recording Fees Deed: $40.00 Mortgage: $45.00 $85.0002 Transfer Tax to Any State $950.00F. Prepaids $2,120.8001 Homeowner’s Insurance Premium ( 12 mo.) to Insurance Co. $1,209.9602 Mortgage Insurance Premium ( mo.)03 Prepaid Interest ( $17.44 per day from 4/15/13 to 5/1/13 ) $279.0404 Property Taxes ( 6 mo.) to Any County USA $631.8005 G. Initial Escrow Payment at Closing $412.2501 Homeowner’s Insurance $100.83 per month for 2 mo. $201.6602 Mortgage Insurance per month for mo.03 Property Taxes $105.30 per month for 2 mo. $210.6004 05 06 07 08 Aggregate Adjustment – 0.01H. Other $2,400.0001 HOA Capital Contribution to HOA Acre Inc. $500.0002 HOA Processing Fee to HOA Acre Inc. $150.0003 Home Inspection Fee to Engineers Inc. $750.00 $750.0004 Home Warranty Fee to XYZ Warranty Inc. $450.0005 Real Estate Commission to Alpha Real Estate Broker $5,700.0006 Real Estate Commission to Omega Real Estate Broker $5,700.0007 Title – Owner’s Title Insurance (optional) to Epsilon Title Co. $1,000.0008 I. TOTAL OTHER COSTS (Borrower-Paid) $5,018.05Other Costs Subtotals (E + F + G + H) $5,018.05


Calculating Cash to Close

BORROWER’S TRANSACTION

K. Due from Borrower at Closing $189,762.30

01 Sale Price of Property $180,000.0002 Sale Price of Any Personal Property Included in Sale03 Closing Costs Paid at Closing (J) $9,682.3004 Adjustments05 0607Adjustments for Items Paid by Seller in Advance08 City/Town Taxes to 09 County Taxes to10 Assessments to11 HOA Dues 4/15/13 to 4/30/13 $80.0012 131415

L. Paid Already by or on Behalf of Borrower at Closing $175,615.0401 Deposit $10,000.0002 Loan Amount $162,000.0003 Existing Loan(s) Assumed or Taken Subject to04 05 Seller Credit $2,500.00Other Credits06 Rebate from Epsilon Title Co. $750.0007 Adjustments0809 10 11 Adjustments for Items Unpaid by Seller12 City/Town Taxes 1/1/13 to 4/14/13 $365.0413 County Taxes to 14 Assessments to15 1617

CALCULATION

Total Due from Borrower at Closing (K) $189,762.30Total Paid Already by or on Behalf of Borrower at Closing (L) – $175,615.04

Cash to Close x From To Borrower $14,147.26

SELLER’S TRANSACTION

M. Due to Seller at Closing $180,080.00

01 Sale Price of Property $180,000.0002 Sale Price of Any Personal Property Included in Sale03 04 05 06 07 08Adjustments for Items Paid by Seller in Advance09 City/Town Taxes to 10 County Taxes to11 Assessments to12 HOA Dues 4/15/13 to 4/30/13 $80.0013141516

N. Due from Seller at Closing $115,665.0401 Excess Deposit02 Closing Costs Paid at Closing (J) $12,800.0003 Existing Loan(s) Assumed or Taken Subject to04 Payoff of First Mortgage Loan $100,000.0005 Payoff of Second Mortgage Loan06 07 08 Seller Credit $2,500.0009 10111213Adjustments for Items Unpaid by Seller14 City/Town Taxes 1/1/13 to 4/14/13 $365.0415 County Taxes to 16 Assessments to17 1819

CALCULATION

Total Due to Seller at Closing (M) $180,080.00Total Due from Seller at Closing (N) – $115,665.04

Cash From x To Seller $64,414.96



Loan Estimate Final Did this change?

Total Closing Costs (J) $8,054.00 $9,712.10 YES • See Total Loan Costs (D) and Total Other Costs (I)

Closing Costs Paid Before Closing $0 – $29.80 YES • You paid these Closing Costs before closing

Closing Costs Financed (Paid from your Loan Amount) $0 $0 NO

Down Payment/Funds from Borrower $18,000.00 $18,000.00 NO

Deposit – $10,000.00 – $10,000.00 NO

Funds for Borrower $0 $0 NO

Seller Credits $0 – $2,500.00 YES • See Seller Credits in Section L

Adjustments and Other Credits $0 – $1,035.04 YES • See details in Sections K and L

Cash to Close $16,054.00 $14,147.26

Use this table to see a summary of your transaction.

Use this table to see what has changed from your Loan Estimate.

Refer to Summaries of TransactionsSales price less loan amount for this example

Adjusts total above foramounts paid before closing


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AssumptionIf you sell or transfer this property to another person, your lender

will allow, under certain conditions, this person to assume this loan on the original terms.

will not allow assumption of this loan on the original terms.

Demand FeatureYour loan

has a demand feature, which permits your lender to require early repayment of the loan. You should review your note for details.

does not have a demand feature.

Late PaymentIf your payment is more than 15 days late, your lender will charge a late fee of 5% of the monthly principal and interest payment.

Negative Amortization (Increase in Loan Amount)Under your loan terms, you

are scheduled to make monthly payments that do not pay all of the interest due that month. As a result, your loan amount will increase (negatively amortize), and your loan amount will likely become larger than your original loan amount. Increases in your loan amount lower the equity you have in this property.

may have monthly payments that do not pay all of the interest due that month. If you do, your loan amount will increase (negatively amortize), and, as a result, your loan amount may become larger than your original loan amount. Increases in your loan amount lower the equity you have in this property.

do not have a negative amortization feature.

Partial PaymentsYour lender

may accept payments that are less than the full amount due (partial payments) and apply them to your loan.

may hold them in a separate account until you pay the rest of the payment, and then apply the full payment to your loan.

does not accept any partial payments.If this loan is sold, your new lender may have a different policy.

Security InterestYou are granting a security interest in 456 Somewhere Ave., Anytown, ST 12345

You may lose this property if you do not make your payments or satisfy other obligations for this loan.


Loan Disclosures

Escrow AccountFor now, your loan

will have an escrow account (also called an “impound” or “trust” account) to pay the property costs listed below. Without an escrow account, you would pay them directly, possibly in one or two large payments a year. Your lender may be liable for penalties and interest for failing to make a payment.

Escrow

Escrowed Property Costs over Year 1

$2,473.56 Estimated total amount over year 1 for your escrowed property costs:Homeowner’s InsuranceProperty Taxes

Non-Escrowed Property Costs over Year 1

$1,800.00 Estimated total amount over year 1 for your non-escrowed property costs:Homeowner’s Association Dues

You may have other property costs.

Initial Escrow Payment

$412.25 A cushion for the escrow account you pay at closing. See Section G on page 2.

Monthly Escrow Payment

$206.13 The amount included in your total monthly payment.

No Escrow

Estimated Property Costs over Year 1

Estimated total amount over year 1. You must pay these costs directly, possibly in one or two large payments a year.

Escrow Waiver Fee

will not have an escrow account because you declined it your lender does not offer one. You must directly pay your property costs, such as taxes and homeowner’s insurance. Contact your lender to ask if your loan can have an escrow account.

In the future, Your property costs may change and, as a result, your escrow pay-ment may change. You may be able to cancel your escrow account, but if you do, you must pay your property costs directly. If you fail to pay your property taxes, your state or local government may (1) impose fines and penalties or (2) place a tax lien on this property. If you fail to pay any of your property costs, your lender may (1) add the amounts to your loan balance, (2) add an escrow account to your loan, or (3) require you to pay for property insurance that the lender buys on your behalf, which likely would cost more and provide fewer benefits than what you could buy on your own.

Additional Information About This Loan

x

x

x

x

x


Contact Information

Confirm Receipt

Other Disclosures

AppraisalIf the property was appraised for your loan, your lender is required to give you a copy at no additional cost at least 3 days before closing. If you have not yet received it, please contact your lender at the information listed below.

Contract DetailsSee your note and security instrument for information about

• what happens if you fail to make your payments, • what is a default on the loan,• situations in which your lender can require early repayment of the

loan, and • the rules for making payments before they are due.

Liability after ForeclosureIf your lender forecloses on this property and the foreclosure does notcover the amount of unpaid balance on this loan,

state law may protect you from liability for the unpaid balance. If you refinance or take on any additional debt on this property, you may lose this protection and have to pay any debt remaining even after foreclosure. You may want to consult a lawyer for more information.

state law does not protect you from liability for the unpaid balance.

RefinanceRefinancing this loan will depend on your future financial situation, the property value, and market conditions. You may not be able to refinance this loan.

Tax DeductionsIf you borrow more than this property is worth, the interest on the loan amount above this property’s fair market value is not deductible from your federal income taxes. You should consult a tax advisor for more information.

By signing, you are only confirming that you have received this form. You do not have to accept this loan because you have signed or received this form.

Applicant Signature Date Co-Applicant Signature Date


Total of Payments. Total you will have paid after you make all payments of principal, interest, mortgage insurance, and loan costs, as scheduled. $285,803.36

Finance Charge. The dollar amount the loan will cost you. $118,830.27

Amount Financed. The loan amount available after paying your upfront finance charge. $162,000.00

Annual Percentage Rate (APR). Your costs over the loan term expressed as a rate. This is not your interest rate. 4.174%

Total Interest Percentage (TIP). The total amount of interest that you will pay over the loan term as a percentage of your loan amount. 69.46%

Loan Calculations

x

Lender Mortgage Broker Real Estate Broker (B)

Real Estate Broker (S)

Settlement Agent

Name Ficus Bank FRIENDLY MORTGAGE BROKER INC.

Omega Real Estate Broker Inc.

Alpha Real Estate Broker Co.

Epsilon Title Co.

Address 4321 Random Blvd.Somecity, ST 12340

1234 Terrapin Dr.Somecity, MD 54321

789 Local LaneSometown, ST 12345 45

987 Suburb Ct.Someplace, ST 12340

123 Commerce Pl.Somecity, ST 12344

NMLS ID 222222

ST License ID Z765416 Z61456 Z61616

Contact Joe Smith JIM TAYLOR Samuel Green Joseph Cain Sarah Arnold

Contact NMLS ID 12345 394784

Contact ST License ID

P16415 P51461 PT1234

Email [email protected]

JTAYLOR@ FRNDLYMTGBRKR.CM

[email protected] [email protected] sarah@ epsilontitle.com

Phone 123-456-7890 333-444-5555 123-555-1717 321-555-7171 987-555-4321

Questions? If you have questions about the loan terms or costs on this form, use the contact information below. To get more information or make a complaint, contact the Consumer Financial Protection Bureau at www.consumerfinance.gov/mortgage-closing?


FEBRUARY 7, 2014

H-25(E) Mortgage Loan Transaction Closing Disclosure – Refinance Transaction Sample


This is a sample of a completed Closing Disclosure for the refinance transaction illustrated by form H-24(D). The purpose, loan amount, loan term, and interest rate have not changed from the estimates provided on the Loan Estimate. The outstanding balance of the existing mortgage loan securing the property was less than estimated on the Loan Estimate. The creditor requires an escrow account and that the consumer pay for private mortgage insurance for the transaction.


Projected Payments





$737.91

NO


Prepayment Penalty NO

Balloon Payment NO

Costs at Closing

Closing Costs $5,757.57 Includes $3,495.50 in Loan Costs + $2,762.07 in Other Costs – $500 in Lender Credits. See page 2 for details.





Mortgage Insurance


$737.91

+ 82.35

+ 206.13

$737.91

+ —

+ 206.13


Estimated Taxes, Insurance & AssessmentsAmount can increase over timeSee details on page 4

$356.13a month

See page 4 for escrowed property costs. You must pay for other property costs separately.

This estimate includes In escrow?x Property Taxes YESx Homeowner’s Insurance YESx Other: HOA Dues NO

From x To Borrower

Transaction InformationBorrower Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST 12345Lender Ficus Bank

Loan InformationLoan Term 30 yearsPurpose RefinanceProduct Fixed Rate Loan Type x Conventional FHA

VA _____________Loan ID # 123456789MIC # 009874513

Closing InformationDate Issued 4/15/2013Closing Date 4/15/2013Disbursement Date 4/15/2013Settlement Agent Zeta TitleFile # 12-3456Property 123 Anywhere Street Anytown, ST 12345 Appraised Prop. Value $180,000



Borrower-Paid Paid by OthersAt Closing Before Closing

A. Origination Charges $1,950.0001 .5 % of Loan Amount (Points) $750.0002 Application Fee $250.0003 Origination Fee $450.0004 Underwriting Fee $500.0005 06 07 08 B. Services Borrower Did Not Shop For $610.0001 Appraisal Fee to John Smith Appraisers Inc. $405.0002 Credit Report Fee to Information Inc. $30.0003 Flood Determination Fee to Info Co. $20.0004 Flood Monitoring Fee to Info Co. $45.0005 Tax Monitoring Fee to Info Co. $65.0006 Tax Status Research Fee to Info Co. $45.0007 08 09 10 C. Services Borrower Did Shop For $935.5001 Pest Inspection Fee to Pests Co. $85.0002 Title – Insurance Binder to Epsilon Title Co. $50.0003 Title – Lender’s Title Policy to Epsilon Title Co. $250.5004 Title – Settlement Agent Fee to Epsilon Title Co. $350.0005 Title – Title Search to Epsilon Title Co. $200.0006 07 08 D. TOTAL LOAN COSTS (Borrower-Paid) $3,495.50Loan Costs Subtotals (A + B + C) $3,060.50 $435.00

Loan Costs


J. TOTAL CLOSING COSTS (Borrower-Paid) $5,757.57Closing Costs Subtotals (D + I) $5,822.57 $435.00Lender Credits – $500.00


Other CostsE. Taxes and Other Government Fees $60.0001 Recording Fees Deed: Mortgage: $60.00 $60.0002 F. Prepaids $2,125.1201 Homeowner’s Insurance Premium ( 12 mo.) to Insurance Co. $1,209.9602 Mortgage Insurance Premium ( mo.)03 Prepaid Interest ( $17.71 per day from 4/15/2013 to 5/1/2013 ) $283.3604 Property Taxes ( 6 mo.) to Any County USA $631.8005 G. Initial Escrow Payment at Closing $576.9501 Homeowner’s Insurance $100.83 per month for 2 mo. $201.6602 Mortgage Insurance $82.35 per month for 2 mo. $164.7003 Property Taxes $105.30 per month for 2 mo. $210.6004 05 06 07 08 Aggregate Adjustment – $0.01H. Other01 02 03 04 05 06 07 08 I. TOTAL OTHER COSTS (Borrower-Paid) $2,762.07Other Costs Subtotals (E + F + G + H) $2,762.07



TO AMOUNT

01 Rho Servicing to pay off existing loan $115,000.00

02

03

04

05

06

07

08

09

10

11

12

13

14

15

K. TOTAL PAYOFFS AND PAYMENTS $115,000.00

Payoffs and Payments Use this table to see a summary of your payoffs and payments to others from your loan amount.



Loan Amount $150,000.00 $150,000.00 NO

Total Closing Costs (J) – $5,099.00 – $5,757.57 YES • See Total Loan Costs (D) and Total Other Costs (I)

Closing Costs Paid Before Closing $0 $435.00 YES • You paid these Closing Costs before closing

Total Payoffs and Payments (K) – $120,000.00 – $115,000.00 YES • See Payoffs and Payments (K)

Cash to Close $24,901.00

From To Borrower

$29,677.43

From To Borrower Closing Costs Financed (Paid from your Loan Amount) $5,322.57


x x
















does not accept any partial payments. If this loan is sold, your new lender may have a different policy.

Security InterestYou are granting a security interest in 123 Anywhere Street, Anytown, ST 12345



Loan Disclosures



Escrow


$2,473.56 Estimated total amount over year 1 for your escrowed property costs:Property Taxes, Homeowner’s Insurance


$1,800.00 Estimated total amount over year 1 for your non-escrowed property costs:HOA Dues






No Escrow



Escrow Waiver Fee




x

x

x

x

x


Contact Information

Confirm Receipt

Other Disclosures


















Loan Calculations

x

Lender Mortgage Broker Settlement Agent

Name Ficus Bank Zeta Title


321 Uptown Dr. Anytown, ST 12345

NMLS ID 222222

ST License ID P76821

Contact Joe Smith Joan Taylor

Contact NMLS ID 12345

Contact __ License ID


[email protected].

Phone 123-456-7890 555-321-9876



FEBRUARY 7, 2014

H-25(G) Mortgage Loan Transaction Closing Disclosure – Refinance Transaction With Cash From Consumer at Consummation


This is a sample of a completed Closing Disclosure for a refinance transaction in which the consumer must pay additional funds to satisfy the existing mortgage loan securing the property and other existing debt to consummate the transaction.






$726.97

NO


Prepayment Penalty NO

Balloon Payment NO




Mortgage Insurance


$726.97

+ 82.35

+ 206.13

$726.97

+ —

+ 206.13


Estimated Taxes, Insurance & AssessmentsAmount can increase over timeSee page 4 for details

$206.13a month

Projected Payments

See Escrow Account on page 4 for details. You must pay for other property costs separately.

This estimate includes In escrow?x Property Taxes YESx Homeowner’s Insurance YES

Other:

Closing Costs $6,156.60 Includes $3,800.50 in Loan Costs + $2,856.10 in Other Costs – $500 in Lender Credits. See page 2 for details.


Costs at Closing

x From To Borrower

Transaction InformationBorrower Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST 12345Lender Fir Bank

Loan InformationLoan Term 30 yearsPurpose RefinanceProduct Fixed Rate Loan Type x Conventional FHA

VA _____________Loan ID # 123456789MIC # 009874513

Closing InformationDate Issued 4/15/2013Closing Date 4/15/2013Disbursement Date 4/15/2013Settlement Agent Zeta TitleFile # 12-3456Property 123 Anywhere Street Anytown, ST 12345 Appraised Prop. Value $180,000



Borrower-Paid Paid by OthersAt Closing Before Closing

A. Origination Charges $2,250.0001 1 % of Loan Amount (Points) $1,500.0002 Application Fee $750.0003 04 05 06 07 08 B. Services Borrower Did Not Shop For $620.0001 Appraisal Fee to John Smith Appraisers Inc. $405.0002 Credit Report Fee to Information Inc. $35.0003 Flood Determination Fee to Info Co. $25.0004 Flood Monitoring Fee to Info Co. $45.0005 Tax Monitoring Fee to Info Co. $65.0006 Tax Status Research Fee to Info Co. $45.0007 08 09 10 C. Services Borrower Did Shop For $930.5001 Pest Inspection Fee to Pests Co. $80.0002 Title – Insurance Binder to Epsilon Title Co. $50.0003 Title – Lender’s Title Policy to Epsilon Title Co. $250.5004 Title – Settlement Agent Fee to Epsilon Title Co. $350.0005 Title – Title Search to Epsilon Title Co. $200.0006 07 08 D. TOTAL LOAN COSTS (Borrower-Paid) $3,800.50Loan Costs Subtotals (A + B + C) $3,360.50 $440.00

Loan Costs


J. TOTAL CLOSING COSTS (Borrower-Paid) $6,156.60Closing Costs Subtotals (D + I) $6,216.60 $440.00Lender Credits – $500.00


Other CostsE. Taxes and Other Government Fees $80.0001 Recording Fees Deed: Mortgage: $80.00 $80.0002 F. Prepaids $2,199.1501 Homeowner’s Insurance Premium ( 12 mo.) to Insurance Co. $1,209.9602 Mortgage Insurance Premium ( 1 mo.) to MI Co. $82.3503 Prepaid Interest ( $17.19 per day from 4/15/2013 to 5/1/2013 ) $275.0404 Property Taxes ( 6 mo.) to Any County USA $631.8005 G. Initial Escrow Payment at Closing $576.9501 Homeowner’s Insurance $100.83 per month for 2 mo. $201.6602 Mortgage Insurance $82.35 per month for 2 mo. $164.7003 Property Taxes $105.30 per month for 2 mo. $210.6004 05 06 07 08 Aggregate Adjustment – $0.01H. Other01 02 03 04 05 06 07 08 I. TOTAL OTHER COSTS (Borrower-Paid) $2,856.10Other Costs Subtotals (E + F + G + H) $2,856.10



TO AMOUNT

01 Rho Servicing to pay off existing loan $124,000.00

02 Beta Card Inc. to pay down credit card balance $5,000.00

03 Bob’s Home Improvement to pay off mechanic’s lien $12,000.00

04 State of Anywhere to pay off tax lien $10,000.00

05

06

07

08

09

10

11

12

13

14

15

K. TOTAL PAYOFFS AND PAYMENTS $151,000.00

Payoffs and Payments Use this table to see a summary of your payoffs and payments to others from your loan amount.



Loan Amount $150,000.00 $150,000.00 NO

Total Closing Costs (J) – $5,691.00 – $6,156.60 YES • See Total Loan Costs (D) and Total Other Costs (I)

Closing Costs Paid Before Closing $0 $440.00 YES • You paid these Closing Costs before closing

Total Payoffs and Payments (K) – $120,000.00 – $151,000.00 YES • See Payoffs and Payments (K)

Cash to Close $24,309.00

From To Borrower

$6,716.60

From To Borrower Closing Costs Financed (Paid from your Loan Amount) $5,691.00


x x
















does not accept any partial payments.If this loan is sold, your new lender may have a different policy.

Security InterestYou are granting a security interest in 123 Anywhere Street, Anytown, ST 12345



Loan Disclosures



Escrow


$2,473.56 Estimated total amount over year 1 for your escrowed property costs:Property Taxes, Homeowner’s Insurance


Estimated total amount over year 1 for your non-escrowed property costs:






No Escrow



Escrow Waiver Fee




x

x

x

x

x


Contact Information

Confirm Receipt

Other Disclosures


















Loan Calculations

x

Lender Mortgage Broker Settlement Agent

Name Fir Bank Zeta Title


321 Uptown Dr. Anytown, ST 12345

NMLS ID 222222

ST License ID P76821

Contact Joe Smith Joan Taylor

Contact NMLS ID 12345

Contact __ License ID


[email protected].

Phone 123-456-7890 555-321-9876



ABA BRIEFING

2016 TRID Audit Briefings: Parts 1-5 RECORDINGS NOW AVAILABLE

On July 28, 2016 the CFPB issued proposed amendments to federal TILA and RESPA mortgage disclosure requirements also known as TRID. But audit efforts cannot be postponed until these proposed amendments are finalized—we need to have a strong monitoring and audit program in place NOW for the new TRID disclosures—with or without comprehensive guidance on all the applicable issues! Get a head start on analyzing the impact of the proposed changes and identify where we still need clarification during these recordings. These recordings work through the guidance we do have, crisply make clear which items are subject to rule changes and also highlight areas yet to be clarified. During these 2-hour recordings, Patti Blenden, CRCM, will provide you with a comprehensive review of information to help you ensure your customers understand key disclosures for one of the most important transactions in their personal lives. Each data point must be gathered, rounded or not rounded, bolded or not bolded…and somewhere between all of that data, the product descriptions, estimates and calculations must be right on target and compliant with the CFPB’s current TRID rules. Aired: October 18—TRID Audit 5: Cash-to-Close and Loan Calculations Calculating Cash-to-Close

o Total Closing Costs (J) o Closing Costs Paid

before Closing o Closing Costs Financed

(Paid from your Loan Amount)

o Down Payment / Funds from Borrower

o Deposit o Funds for Borrowers o Seller Credits o Adjustments and Other

Credits

Alternative Cash-to-Close Loan Calculations

o Total of Payments o Finance Charge o Amount Financed o Annual Percentage Rate

(APR) o Total Interest Percentage

(TIP)

Aired: September 29—TRID Audit 4: Construction Loans Construction Only Loans Construction – Permanent Loans

o Loan Estimate Issues Calculating Cash to Close and

Summaries of Transactions (Page 3)

Additional Information About This Loan (Page 4)

Loan Calculations and Other Disclosures (Page 5)

Other Considerations

RECORDING FEES ABA/ICB/Service Member $265 per recording Nonmember $395 per recording

Streaming Online Recording or CD-ROM are available for purchase.

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Call 1-800-BANKERS (1-800-226-5377)

GET THE CREDIT YOU DESERVE! These recordings have been approved for 2.5 CRCM credits.

You are receiving this fax communication because of your established business relationship with the American Bankers Association. Our objective is to provide you with the most relevant information, opportunities and issues impacting the financial services industry. If you would like to change your communication preferences, unsubscribe or receive additional information please contact 1-800-BANKERS or email your request to [email protected]. Your request will be processed within 30 days of receipt, as required by law.


Aired: September 14—TRID Audit 3: Closing Disclosure Closing Disclosure Calculations Loan Terms, Projected Payments

and Costs at Closing (Page 1) Closing Costs Details (Page 2) Settlement Service Shopping

Results Tolerances and Variations

o Rescission Tolerances

Calculating Cash to Close and Summaries of Transactions (Page 3)

Additional Information About This Loan (Page 4)

Loan Calculations and Other Disclosures (Page 5)

Other Considerations Aired: September 1—TRID Audit 2: Loan Estimates Loan Estimate Calculations Loan Terms, Projected Payments

and Costs at Closing (Page 1) Closing Costs Details (Page 2) Settlement Service Shopping

Considerations

Written List of Providers Revised Loan Estimates and

Variations Comparisons and Other

Considerations (Page 3)

Aired: July 27—TRID Audit 1: TRID General Rules TRID Coverage and Purpose Property Valuations Product Descriptions TRID Timing

Disclosure Formatting Rules Pre-qualifications and Preapprovals Changes in Circumstances E-Sign Delivery

Speaker: Patti J. Blenden, CRCM, President, Financial Solutions for Growing Companies, Inc.

Who Will Benefit from these Recordings?

Chief Lending Officer Mortgage Lenders Mortgage Loan Managers Chief Risk Managers Risk Management Professionals Chief Auditors Audit Professionals Chief Operating Officers Settlement Professionals and Attorneys Compliance Officers & Managers Operations Managers Loan Operations Staff Senior Bank Managers CRCMs

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