Retail Retail

New TILA and RESPA New TILA and RESPA RequirementsRequirements

Effective 7/30/2009Effective 7/30/2009

This information is not intended or should be construed as legal advice. Please consult your legal counsel for applicability.

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New TILA and RESPA New TILA and RESPA RequirementsRequirements

Upfront fees cannot be collected, imposed or paid for on Upfront fees cannot be collected, imposed or paid for on behalf of the borrower until the initial disclosures are behalf of the borrower until the initial disclosures are received.received.

The earliest closing date for any loan is seven (7) business The earliest closing date for any loan is seven (7) business days after the initial disclosures are issued.days after the initial disclosures are issued.

An increase or decrease of .125% (fixed rate loans) An increase or decrease of .125% (fixed rate loans) or .250% (adjustable rate loans) in the APR requires re-or .250% (adjustable rate loans) in the APR requires re-disclosure of the TIL. The re-disclosed TIL must be received disclosure of the TIL. The re-disclosed TIL must be received by the borrower at least three (3) business days prior to by the borrower at least three (3) business days prior to closing. closing.

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How the New How the New Requirements Impact YouRequirements Impact You

On Thursday July 30, 2009 federal regulations that amend On Thursday July 30, 2009 federal regulations that amend

the Truth in Lending Act (TIL) became effective.the Truth in Lending Act (TIL) became effective. The intent The intent of these changes is to help prevent deceptive lending of these changes is to help prevent deceptive lending practices and to improve communication of loan practices and to improve communication of loan information to consumers. information to consumers.

The major changes that impact WMC are:The major changes that impact WMC are:• Upfront (application) fees cannot be collected, imposed or paid for on Upfront (application) fees cannot be collected, imposed or paid for on

behalf of the borrower until the TIL and GFE disclosures have been behalf of the borrower until the TIL and GFE disclosures have been received by the borrower. received by the borrower.

Three business days if delivered through the postal mail Three business days if delivered through the postal mail Same business day if hand delivered in a face to face interviewSame business day if hand delivered in a face to face interview Same business day if delivered electronically (via email)Same business day if delivered electronically (via email) Next business day if delivered by overnight expressNext business day if delivered by overnight express

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How the New How the New Requirements Impact YouRequirements Impact You

• The earliest closing date for any loan is seven business The earliest closing date for any loan is seven business days after the TIL and GFE disclosures have been issued. days after the TIL and GFE disclosures have been issued.

• Any difference in terms and fees that results in a change Any difference in terms and fees that results in a change to the APR of .125% for fixed rate loans and .250% for to the APR of .125% for fixed rate loans and .250% for adjustable rate loans requires the TIL and GFE to be re-adjustable rate loans requires the TIL and GFE to be re-disclosed and reissued to the customer.  disclosed and reissued to the customer. 

If re-disclosure is required, the revised disclosures must be If re-disclosure is required, the revised disclosures must be provided to the customer at least three days prior to loan provided to the customer at least three days prior to loan closing. closing.

• All loan files must contain a copy of the appraisal invoice All loan files must contain a copy of the appraisal invoice and a copy of the itemized title company invoice.and a copy of the itemized title company invoice.

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Scheduling ClosingsScheduling Closings

Once the loan is approved by underwriting, the closing may Once the loan is approved by underwriting, the closing may be scheduled.be scheduled.• Loan closing may not occur until seven (7) business days after Loan closing may not occur until seven (7) business days after

the initial application disclosures are issued.the initial application disclosures are issued.• If re-disclosure is required, the borrower must receive the If re-disclosure is required, the borrower must receive the

disclosures no less than three (3) business days prior to loan disclosures no less than three (3) business days prior to loan closing.closing.

Changes in the APR that are the result of a difference between Changes in the APR that are the result of a difference between estimated and actual per diem interest only do not require re-estimated and actual per diem interest only do not require re-disclosure. disclosure.

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Scheduling ClosingsScheduling Closings

• The Settlement Agent or Title Company must forward the The Settlement Agent or Title Company must forward the sample HUD-1 to the WMC Closing Department no less than 96 sample HUD-1 to the WMC Closing Department no less than 96 hours prior to closing to allow sufficient time for re-disclosure, hours prior to closing to allow sufficient time for re-disclosure, if necessary.if necessary.

For Streamline Refinance loans, be sure to back into your closing For Streamline Refinance loans, be sure to back into your closing date, and allow enough time for re-disclosure. Often times, this will date, and allow enough time for re-disclosure. Often times, this will be approximately ten (10) business days prior to the scheduled be approximately ten (10) business days prior to the scheduled closing date.closing date.

The “wait period” is between disclosure and closing, not The “wait period” is between disclosure and closing, not funding/disbursement. Branches in escrow states will need to funding/disbursement. Branches in escrow states will need to obtain the initial HUD-1 before closing documents are released. In obtain the initial HUD-1 before closing documents are released. In addition, fees can no longer be estimated. If fees change and result addition, fees can no longer be estimated. If fees change and result in an increase or decrease in the APR of more than .125% (fixed in an increase or decrease in the APR of more than .125% (fixed rate) or .250% (ARM), it will result in re-disclosure of the TIL and a rate) or .250% (ARM), it will result in re-disclosure of the TIL and a further delay to the closing date.further delay to the closing date.