tila-respa integrated disclosures (trid) faqstila-respa integrated disclosures faqs . tila-respa...

1 Created 03/23/2015 Confidential – For use by FAMC customers only Revised 12/21/2015 TILA-RESPA Integrated Disclosures FAQs

TILA-RESPA Integrated Disclosures (TRID) FAQs

On July 21, 2015, the Consumer Financial Protection Bureau (CFPB) published the final rule to delay the effective date of the TILA-RESPA Integrated Disclosure (TRID) rule to October 3, 2015. Click here to view the CFPB press release. The CFPB has also created a list of commonly asked questions and answers related to TRID. Click here for the link. Information on this page is accurate as of the revision date. This information is for use by Franklin American Mortgage Company (FAMC) clients only and should not be distributed to or used by consumers or other third-parties. Information is accurate as of the revision date and is subject to change without notice. Official FAMC policies will be communicated via standard channel communications and Guide updates. In the case of conflict, the FAMC Guide is the controlling document. Recipients of this document should consult with their Compliance and legal counsel as to the specifics of the final rule. Nothing herein should be construed as legal advice and may not be relied upon as such.

http://www.consumerfinance.gov/newsroom/cfpb-finalizes-two-month-extension-of-know-before-you-owe-effective-date/

http://files.consumerfinance.gov/f/201508_cfpb_question-index-outlook-live-webinars-on-tila-respa-integrated-disclosure.pdf


TABLE OF CONTENTS Introductory Questions ................................................................................................................................. 7

1. With the CFPB’s published communication regarding a delay in enforcement, will we still need to provide a LE/CD for applications received on/after October 3, 2015? ....................................... 7

2. Do you consider loans secured by investment property as covered by TRID? ................................ 7 3. Are HELOCs subject to TRID? ........................................................................................................... 7 4. Will FAMC have the LE/CD available in alternate languages? ......................................................... 7 5. As a Wholesale Broker, am I considered the creditor or is FAMC? ................................................. 7

Applications................................................................................................................................................... 7 6. What are the 6 pieces of information needed for a complete application? ................................... 7 7. If a loan application is taken on October 2, 2015, will we need to provide the GFE/TIL/HUD or

the LE/CD? ....................................................................................................................................... 7 8. If a broker takes an application on Saturday (a day that FAMC does not consider a business

day), what day will FAMC consider the application taken? ............................................................. 8 9. With regards to the six pieces of information, if the borrower provides it verbally, does that

qualify as having received the information or does it have to be written evidence? ..................... 8 10. If a potential customer gives me all 6 pieces of information but I pull credit and it is a non-

qualifying credit history or score do I still have to issue a LE? ........................................................ 8 11. As part of the application, is income considered stated income or documented income? ............ 8 12. If we receive the 6 pieces of application via an online application process and miss the

notification of the new application within the 3 day timeframe, we would be out of compliance. Are we allowed to take out one of the 6 pieces information from our online application to avoid this? .................................................................................................................................................. 8

TBD Properties .............................................................................................................................................. 8 13. After 10/3/15, if the application’s property is TBD, will the creditor provide the LE? .................... 8 14. For TBD applications received prior to October 3, 2015 and a GFE/TIL has not been provided,

will an LE be issued when the borrower finds a property after October 3rd or will the 1003 date prior to October 3rd be the trigger to issue GFE and initial TIL? ..................................................... 9

15. If a GFE/TIL is provided on a TBD loan application before October 3rd, would an LE need to be provided once the property address is received after October 3rd? .............................................. 9

16. Since the LE is not issued until the address is provided, will FAMC underwrite loans with TBD properties? ....................................................................................................................................... 9

Loan Estimate (LE) ......................................................................................................................................... 9 17. If a borrower provides a creditor 6 pieces of the application, but does not authorize the

creditor to pull their credit report, does an LE need to be issued? ................................................. 9 18. What definition of a business day is used for purposes of providing an LE? .................................. 9 19. Does the date the borrower signs the initial 1003 matter as long as the loan officer is disclosing

the LE within 3 business days of receipt of all 6 pieces of information? ......................................... 9 20. If an applicant receives the LE in accordance with the timing requirements of TRID and gives

their intent to proceed with the application orally, what will FAMC require as sufficient documentation of the oral intent? .................................................................................................. 9

21. If the 6 pieces of information are received verbally, a credit report cannot be pulled because the borrower has not yet signed the credit authorization. How can an LE be issued? ................. 10


22. What is FAMC’s policy if an LE has not been issued within 3 days of a broker receiving an application? .................................................................................................................................... 10

23. Will FAMC require the LE to be signed? ........................................................................................ 10 24. Are we allowed to over disclose fees on the LE to ensure we do not exceed tolerances? ........... 10 25. What providers should be listed on the Settlement Service Provider List (SSPL)?........................ 10 26. Is the broker, FAMC, or both going to be completing the LE? ....................................................... 10 27. Will a LE be required as part of the skinny pack? .......................................................................... 10 28. When a fee has zero tolerance for variation does that mean it can’t go up or it can’t change at

all? .................................................................................................................................................. 11 29. If the loan number is not known at the time a Broker or EMB is completing the LE – can this be

left blank? If the loan number is disclosed initially as 1234 (for example), can it later be changed? ........................................................................................................................................ 11

30. For ARM loans, what interest rate will be disclosed in the Loan Terms section on the LE? ......... 11 31. What are the tolerances for each section of the LE? .................................................................... 11 32. Is a revised LE required at the time of the rate lock even if the rate, points or lender credits are

the same as the initial LE? ............................................................................................................. 12 33. On a purchase transaction, the closing attorneys/title companies typically quote owner’s title

as the main charge for title insurance and quote lender’s title for the simultaneous issues fee of $35-$50. How should these be disclosed on the LE?..................................................................... 12

34. According to the new rules, you must issue a LE once you have obtained your 6 key pieces of information even if the borrower has not given their OK to pull credit. How do you accurately complete the LE if you don’t know what kind pricing hits you will be subject to due to credit scores? ........................................................................................................................................... 12

35. Does the same estimated fee need to be disclosed to all borrowers? ......................................... 12 36. Our closing attorneys usually disclose the full insurance fee under owner’s title and the

simultaneous issue fee under lender’s title on purchases. Since the CFPB considers owner’s title to be optional, will they need to start disclosing the full title insurance fee under lender’s title for all purchase loans? ............................................................................................................ 12

37. Once the LE is sent to the borrower, when can we impose a fee? ............................................... 13 38. Will a Broker/EMB be allowed to run AUS on our website after October 3rd, without first

disclosing the loan to the borrower? ............................................................................................. 13 39. If the delivered LE is either non-compliant due to certain fees being incorrect (that doesn’t

warrant a valid COC) and/or isn’t delivered to the consumer within the 3 days, will FAMC allow for that loan to be declined and a new loan application to be taken and resubmitted? .............. 13

Fees ............................................................................................................................................................. 13 40. If we work with two AMC’s and ask the borrower which AMC they want to use, would the

appraisal fees be disclosed on Section C (Shoppable Services)? ................................................... 13 41. What about services borrowers typically do not shop for? Will they be required to have

options? ......................................................................................................................................... 13 42. If we typically do not pass the credit report fee onto the borrower, how should this be

disclosed on the LE and the CD? .................................................................................................... 13 43. Do we have to quote transfer tax/stamps to the buyer if typically and ALWAYS paid by the

seller? ............................................................................................................................................. 14 44. I understand that lender-paid compensation will not be listed on the LE but will be listed on the

CD. Will the compensation be included in the APR calculation? ................................................... 14


45. How is borrower paid single premium MI disclosed on the Loan Estimate and Closing Disclosure? ..................................................................................................................................... 14

46. How is borrower paid Split MI disclosed on the Loan Estimate and Closing Disclosure? ............. 14 47. How is Lender Paid Mortgage Insurance (LPMI) disclosed? .......................................................... 14 48. How is FHA MIP disclosed on the LE and CD? ................................................................................ 14 49. Is the USDA Rural Housing fee disclosed any differently? ............................................................. 14

Changed Circumstances .............................................................................................................................. 15 50. Will a new LE be given for ANY changed circumstance, or only if it effects the APR by more than

1/8 (fixed) or 1/4 (ARM)? ............................................................................................................... 15 51. Who will redisclose the LE when there is a valid changed circumstance? .................................... 15 52. In the case of the appraisal fee, what would happen if the borrower was charged more due to

issues with remote area, unusual property types, etc.? ............................................................... 15 53. When a credit supplement is required by underwriting, is it a valid changed circumstance to

increase the credit report fee and redisclose the LE? ................................................................... 15 54. How will an LO know to include a final inspection fee on the LE? ................................................ 15 55. What if we find out the property is in a flood zone after the LE has been issued? ....................... 15 56. If we accidentally disclose a VA Funding Fee on the LE as a first time use but it is actually a

subsequent use, is this changed circumstance? ............................................................................ 15 57. Can an applicant switch to a different type of coverage such as single premium to a split

premium? ....................................................................................................................................... 16 Lender and Seller Credits ............................................................................................................................ 16

58. How will Seller Paid closing costs be disclosed? ............................................................................ 16 59. I understand that lender credits need to be disclosed on the LE. If the initial LE discloses a

closing cost credit of $2,000 and the closing costs end up being only $1,800, what happens to the $200 over disclosure of our closing cost credit? My understanding is that we may revise all fees to the borrower downwards, except for the lender closing cost credit. ............................... 16

Your Home Loan Toolkit .............................................................................................................................. 16 60. The Settlement Cost Booklet will be replaced with the Your Home Loan Toolkit. Is FAMC ok with

the borrower receiving an electronic copy of the toolkit? ............................................................ 16 61. Will providing borrowers a link to the toolkit suffice as an electronic copy? ............................... 16

Electronic Delivery ...................................................................................................................................... 17 62. If FAMC sends the disclosures out by email and the borrower opens and acknowledges those

disclosures, is the process compliant with TRID requirements? ................................................... 17 63. If an EMB approved customer uses an FAMC approved E-Signature vendor, what specific

documentation will be required to confirm that the TRID disclosures were delivered within the required timeframes? .................................................................................................................... 17

64. Our doc provider allows us to electronically verify when the borrower(s) view the Closing Disclosure. Can you verify that this will be an acceptable verification of receipt? ....................... 17

Closing Disclosure (CD) ............................................................................................................................... 17 65. What definition of a business day is used for purposes of providing a CD? ................................. 17 66. How does FAMC define consummation? ....................................................................................... 17 67. Can you help me understand the requirement that the borrower receive the CD 3 days prior to

consummation? Do we send the borrower a copy and they sign it at closing? Will we be requiring the customer to come into our office to review and sign the disclosure? .................... 17


68. Does the borrower need to re-sign the same CD on the date of closing, assuming there are no changes from when they received it 3 days prior? ........................................................................ 18

69. If the CD has been provided and there is a valid changed circumstance, can a revised LE be provided? ....................................................................................................................................... 18

70. What happens if a lock is extended, the lender credits are reduced and the APR increases? ..... 18 71. If the lender prepares the CD for the buyer, what about the seller? Does the closing agent still

prepare some kind of similar document/HUD-1 for the seller? .................................................... 18 72. A non-borrowing spouse must sign the CD on a rescindable transaction. Will a non-purchasing

spouse be required to sign the CD on a purchase transaction as well? ........................................ 18 73. What if a fee is disclosed on the LE, but it does not end up being charged or disclosed on the

CD? ................................................................................................................................................. 18 74. If we send the CD to the borrower via our electronic delivery method and receive an E-Sign

compliant acknowledgment, do we still have to wait three days to close? .................................. 19 75. How does FAMC plan to issue the CD in regards to the 3 day timeframe before closing? ........... 19 76. When is day 1 of the 3 day waiting period? Is it the day disclosed? ............................................. 19 77. What about a cash sale where there is no lender? There would still be fees, such as attorney

fees, title insurance, transfer taxes, etc. that would need to be listed on a CD/HUD-1 type document. Would the closing agent prepare the CD in that case? ............................................... 19

78. How will the lender know what to put in for commissions, termite, inspection fees, or other charges that the buyer or seller may be responsible for? ............................................................. 19

79. Typically after receiving the appraisal, we normally do not have any fee changes. Therefore, as a broker, how do we engage with FAMC to issue the CD to the borrower and not wait until the 3 days prior to close? ..................................................................................................................... 19

80. There is a section on the Closing Disclosure to disclose the Lender’s partial payment policy. What is FAMC’s policy on this? ...................................................................................................... 20

81. As an EMB lender, can we send the CD prior to clear to close? .................................................... 20 82. Will FAMC allow the 3-day waiting period to be waived after the CD is provided due to a “bona

fide personal emergency”? ............................................................................................................ 20 83. We are an EMB lender and FAMC currently prepares our closing documents. Please confirm if

this will still be the same process and if FAMC will prepare and deliver the CD. .......................... 20 84. What will FAMC accept as documentation of early receipt of the CD? ........................................ 20 85. Currently, we are not collecting property taxes as a prepaid item. We only collect in the initial

escrow. Are we required to show 12 months of property taxes in the prepaid (F) section of the CD even though we are not collecting? ......................................................................................... 20

86. Since the lender is only responsible for providing the CD to the consumer and title is to provide the CD for the seller, if the 2 CDs don’t match, how will this be corrected at the consummation? Will there be tolerances % or will the title company be responsible to settle any differences? .. 20

87. Will FAMC be providing a CD directly to the realtors on purchase transactions? ........................ 20 88. Does the TRID rule require the loan process to be complete prior to the CD being sent? ........... 21 89. Is the Loan required to be locked with the borrower prior to issuance of the CD? In other

words is a locked LE required before we can issue a CD? ............................................................. 21 Q.disclosures ............................................................................................................................................... 21

90. Do we know the amount of appraisal fee’s that will be auto-populated? .................................... 21 91. There doesn’t appear to be a spot on the Q.disclosures to enter an aggregate credit? Can this

be entered in Q.disclosures as a credit somewhere? .................................................................... 21


92. Are we able to select just one Title Company for the” You Can Shop For” list versus having the 10 lowest or 10 closest? ................................................................................................................ 21

93. With the new roll out, will we allow the external Admin to control if an individual LO has the right to access the LE Portal? ......................................................................................................... 21

94. Will the broker be able to print/view all disclosures in our package to know what we provide? 22 95. If a broker gets started on an LE and realizes they do not have all of the information for fees is

there a ‘save’ feature? ................................................................................................................... 22 96. Was there a task counter (like in Q.Docs)? .................................................................................... 22 97. How is conventional MI calculated? I believe it is a 10% tolerance field, correct? ...................... 22 98. How many title companies are in Q.disclosures? .......................................................................... 22 99. Where do you see the biggest hiccups or highest percentage of errors being made on the LE so

we can train our partners correctly? ............................................................................................. 22


INTRODUCTORY QUESTIONS

1. With the CFPB’s published communication regarding a delay in enforcement, will we still need to provide a LE/CD for applications received on/after October 3, 2015? Yes. The CFPB did not delay the rule, they only promised leniency for an undetermined time period for lenders that make their best effort to comply. This would mean reduced fines and penalties to those that make their best effort to comply with the rule as of October 3rd. For any lenders that decided not to implement, they would be considered non-compliant and subject to the full fines and penalties.

2. Do you consider loans secured by investment property as covered by TRID? Investment properties for personal, family, or household purposes would be subject to these requirements. Refer to page 19 of the CFPB’s Small Entity Compliance Guide.

3. Are HELOCs subject to TRID? TRID does not apply to HELOC’s. The GFE/TIL/HUD will still be used for HELOC’s on/after 10/3.

4. Will FAMC have the LE/CD available in alternate languages? No, FAMC does not purchase or originate loans that are negotiated or originated in languages other than English.

5. As a Wholesale Broker, am I considered the creditor or is FAMC? For wholesale transactions, FAMC is the creditor. For EMB transactions, the EMB lender is the creditor.

APPLICATIONS

6. What are the 6 pieces of information needed for a complete application? As of October 3, 2015, once you receive the borrower’s name, income, social security number, property address, estimated value of the property and loan amount sought, you will have a completed application. 1026.2 (3)(ii)

7. If a loan application is taken on October 2, 2015, will we need to provide the GFE/TIL/HUD or the LE/CD? If a completed application is received on October 2nd, the loan will still use the GFE/TIL/HUD. If a partial application is received prior to 10/3 and the remaining application items are received on or after 10/3, the LE/CD will be provided.


8. If a broker takes an application on Saturday (a day that FAMC does not consider a business day), what day will FAMC consider the application taken? The definition of business day is based on when the creditor's office is open for business. Since FAMC is the creditor, we would consider the application received on Monday.

9. With regards to the six pieces of information, if the borrower provides it verbally, does that qualify as having received the information or does it have to be written evidence? If the applicant provides any of the application information verbally, it is considered received. No documents can be required of the applicant until after the LE has been provided.

10. If a potential customer gives me all 6 pieces of information but I pull credit and it is a non-qualifying credit history or score do I still have to issue a LE? If the creditor determines within the three-business-day period that the consumer’s application will not or cannot be approved on the terms requested by the consumer, or if the consumer withdraws the application within that period, the creditor does not have to provide the Loan Estimate. (Comment 19(e)(1)(iii)-3). However, if the creditor does not provide the Loan Estimate, it will not have complied with the Loan Estimate requirements under Regulation Z if it later consummates the transaction on the terms originally applied for by the consumer. (Comment 19(e)(1)(iii)-3).

11. As part of the application, is income considered stated income or documented income? Stated income. The borrower cannot be required to provide documents verifying information related to their application before they are provided an LE. 1026.19(e)(2)(iii)

12. If we receive the 6 pieces of application via an online application process and miss the notification of the new application within the 3 day timeframe, we would be out of compliance. Are we allowed to take out one of the 6 pieces information from our online application to avoid this? Yes. The preamble of the rule even suggests to strategically order the information you collect to ensure you receive the 6th piece of information after you've received anything else you want to collect before issuing an LE.

TBD PROPERTIES

13. After 10/3/15, if the application’s property is TBD, will the creditor provide the LE? If you do not have a property address, you do not have an application as defined by the rules and therefore, an LE is not required. Once you have the property address and the other pieces of information that make up an application, you have 3 business days to provide the LE. If you do provide an LE prior to having the property address, you are bound by it.


14. For TBD applications received prior to October 3, 2015 and a GFE/TIL has not been provided, will an LE be issued when the borrower finds a property after October 3rd or will the 1003 date prior to October 3rd be the trigger to issue GFE and initial TIL? If the property address is received on or after 10/3 for a TBD application and a GFE/TIL has not been issued, we will issue an LE.

15. If a GFE/TIL is provided on a TBD loan application before October 3rd, would an LE need to be provided once the property address is received after October 3rd? No. If a GFE/TIL has already been provided on a TBD, an LE will not be provided and the loan will fall under the pre-TRID rules.

16. Since the LE is not issued until the address is provided, will FAMC underwrite loans with TBD properties? Yes, TBD’s will still go through underwriting. We will issue the LE once the property address is identified.

LOAN ESTIMATE (LE)

17. If a borrower provides a creditor 6 pieces of the application, but does not authorize the creditor to pull their credit report, does an LE need to be issued? Yes, the LE must be sent to the borrower within 3 business days of receiving the borrower’s six pieces of information (application).

18. What definition of a business day is used for purposes of providing an LE? For purposes of providing an LE, a business day is a day on which the creditor's offices are open to the public for carrying out substantially all of its business. FAMC business days are defined as Monday through Friday. We do not consider Saturday/Sunday as business days for delivering the LE.

19. Does the date the borrower signs the initial 1003 matter as long as the loan officer is disclosing the LE within 3 business days of receipt of all 6 pieces of information? Only the LE will be disclosed of the date the 6 pieces of information are received. The current 1003 requirements remain unchanged.

20. If an applicant receives the LE in accordance with the timing requirements of TRID and gives their intent to proceed with the application orally, what will FAMC require as sufficient documentation of the oral intent? The Intent to Proceed requirements do not change with TRID. Refer to your applicable lending guide for the acceptable methods of demonstrating compliance with the intent to proceed.


21. If the 6 pieces of information are received verbally, a credit report cannot be pulled because the borrower has not yet signed the credit authorization. How can an LE be issued? The LE must contain a good faith estimate of credit costs and transaction terms. If any information necessary for an accurate disclosure is unknown, the creditor must make the disclosure based on the best information reasonably available at the time the disclosure is provided to the consumer. The definition of application does not prevent a creditor from collecting whatever additional information it deems necessary in connection with the request for the extension of credit. However, once a creditor has received the six pieces of information, it has an application for purposes of the requirement for delivery of the LE to the consumer, including the 3 business day timing requirement.

22. What is FAMC’s policy if an LE has not been issued within 3 days of a broker receiving an application? If an LE has not been issued within 3 days of receiving the application, FAMC will not accept the application from the Wholesale Broker.

23. Will FAMC require the LE to be signed? No. There will be a signature line available on the LE to provide proof of in-person delivery, if needed.

24. Are we allowed to over disclose fees on the LE to ensure we do not exceed tolerances? The LE must contain a good faith estimate of credit costs and transaction terms. If any information necessary for an accurate disclosure is unknown, the creditor must make the disclosure based on the best information reasonably available at the time the disclosure is provided to the consumer.

25. What providers should be listed on the Settlement Service Provider List (SSPL)? If the fee is in section C on the LE, the provider should be listed on the Settlement Service Providers List (SSPL). If the borrower selects the provider on the list, the fee will fall into the 10% tolerance bucket. If the borrower does not select the provider on the list, the fee will fall into the unlimited tolerance bucket. If the borrower is not given an SSPL, the fee should be disclosed in section B on the LE and fall in the 0% tolerance bucket.

26. Is the broker, FAMC, or both going to be completing the LE? We intend for the broker to enter the application information into our broker portal and the LE will be issued by FAMC. By having the portal, the broker will be able to provide the LE to the borrower at point of sale.

27. Will a LE be required as part of the skinny pack? A skinny pack will no longer be needed as the LE will be issued via our broker portal when the six pieces of information are received.


28. When a fee has zero tolerance for variation does that mean it can’t go up or it can’t change at all? If a fee falls in the zero variation category, it can decrease. The fee can increase if there is a valid changed circumstance.

29. If the loan number is not known at the time a Broker or EMB is completing the LE – can this be left blank? If the loan number is disclosed initially as 1234 (for example), can it later be changed? Brokers will prepare the LE using our portal so they will be assigned an FAMC loan number. The loan number used must be unique to the transaction and consistently used throughout the process. If the EMB typically uses our loan number, then they will need to register the loan with FAMC to be assigned a loan number before the LE is provided.

30. For ARM loans, what interest rate will be disclosed in the Loan Terms section on the LE? For an adjustable rate transaction, if the interest rate at consummation is not known, the rate disclosed shall be the fully-indexed rate, which means the interest rate calculated using the index value and margin at the time of consummation.

31. What are the tolerances for each section of the LE? Unlimited Tolerance:

- Prepaid interest; property insurance premiums; amounts placed into an escrow, impound, reserve or similar account; - Services required by the creditor if the creditor permits the consumer to shop and the consumer selects a third-party service provider not on the creditor’s written list of service providers; and - Charges paid to third-party service providers for services not required by the creditor.

10% Aggregate Tolerance:

- Recording fees; and - Charges for third-party services where:

o The charges are not paid to the creditor or the creditor’s affiliate o The consumer is permitted by the creditor to shop but selects a third-party service provider on the creditor’s written list of service providers.

Zero Tolerance (the creditor may never charge more than the estimated amount unless there is a changed circumstance):

- Transfer taxes; - Fees paid to the creditor, mortgage broker, or an affiliate of either; and - Fees paid to an unaffiliated third party if the creditor did not permit the consumer to shop. NOTE: This includes items that a borrower typically does not shop for: appraisal, MI, PMI, etc.


32. Is a revised LE required at the time of the rate lock even if the rate, points or lender credits are the same as the initial LE? Yes, a revised LE must be provided within 3 days of the rate lock. 1026.19(e)(3)(iv)(D)

33. On a purchase transaction, the closing attorneys/title companies typically quote owner’s title as the main charge for title insurance and quote lender’s title for the simultaneous issues fee of $35-$50. How should these be disclosed on the LE? When the owner’s title insurance premium includes a simultaneous issuance premium, the premium is calculated by taking the full owner’s title insurance premium, adding the simultaneous issuance premium for the lender’s coverage (if any), and then deducting the full premium for lender’s coverage. (Comment 37(g)(4)-2)

34. According to the new rules, you must issue a LE once you have obtained your 6 key pieces of information even if the borrower has not given their OK to pull credit. How do you accurately complete the LE if you don’t know what kind pricing hits you will be subject to due to credit scores? Creditors are responsible for ensuring the figures stated in the Loan Estimate are made in good faith and consistent with the best information reasonably available to the creditor at the time the LE is disclosed. If there is information unknown or not available to the creditor at the time the Loan Estimate is completed, the creditor may use estimates even though it knows more accurate information will be available later. Once the interest rate is locked, the creditor must issue a revised LE with the revised interest rate as well as any revisions to the points disclosed on the LE, lender credits, and any other interest rate dependent charges and terms that have changed due to the new interest rate. Refer to questions 6.6, 6.10, 7.1, and 8.7 in the CFPB's TRID Compliance Guide.

35. Does the same estimated fee need to be disclosed to all borrowers? There is no requirement that states the same estimated fee must be disclosed to all borrowers. Each Loan Estimate is required to be completed based on the best information reasonably available at the time of the disclosure is provided.

36. Our closing attorneys usually disclose the full insurance fee under owner’s title and the simultaneous issue fee under lender’s title on purchases. Since the CFPB considers owner’s title to be optional, will they need to start disclosing the full title insurance fee under lender’s title for all purchase loans? According to comment 37(g)(4)-2, the title insurance premium for a lender's title policy should be disclosed based on the full premium rate. The owner's title insurance premium disclosed should be calculated by taking the full owner's title insurance premium, adding the simultaneous issuance premium for the lender's coverage, and then deducting the full premium for lender's coverage.


37. Once the LE is sent to the borrower, when can we impose a fee? A fee cannot be imposed on a borrower until the borrower has received the Loan Estimate and indicated their intent to proceed. This includes all fees except for a credit report fee.

38. Will a Broker/EMB be allowed to run AUS on our website after October 3rd, without first disclosing the loan to the borrower? Yes, they can run AUS prior to disclosing the LE. Running AUS does not impact the timing of disclosing the LE. The LE must still be disclosed within 3 days of receiving the 6 pieces of information.

39. If the delivered LE is either non-compliant due to certain fees being incorrect (that doesn’t warrant a valid COC) and/or isn’t delivered to the consumer within the 3 days, will FAMC allow for that loan to be declined and a new loan application to be taken and resubmitted? An LE MAY NOT be reissued and/or revised due to miscalculations or underestimations of charges. Loan applications submitted to FAMC with incorrect information resulting in an LE containing miscalculations or underestimated charges will be reviewed on a case-by-case basis. FAMC reserves the right to decline these loans. If the loan is declined, it CANNOT be resubmitted until after the rate expiration or credit document expiration, whichever occurs last.

FEES

40. If we work with two AMC’s and ask the borrower which AMC they want to use, would the appraisal fees be disclosed on Section C (Shoppable Services)? No, borrowers cannot shop for AMC’s. Appraisal fees will be listed under Section B and fall into the 0% tolerance bucket. The only way an appraisal fee can increase is a valid changed circumstance.

41. What about services borrowers typically do not shop for? Will they be required to have options? For the fees borrowers typically do not shop for (Appraisal, Credit Report, etc.), they will fall in Section B. For the other third party fees (title company, etc.), we assume borrowers will be given a Settlement Service Provider List (SSPL) with at least one provider for each service listed. If they are not given an SSPL for the shoppable services, those fees will fall into Section B and the 0% tolerance bucket.

42. If we typically do not pass the credit report fee onto the borrower, how should this be disclosed on the LE and the CD? If the Broker or EMB is paying the cost of the credit report, the fee would not be listed on the LE as it is only for charges to the borrower. On the CD, it would be listed in Section B – Services the Borrower Did Not Shop For and would be in the “Paid by Others” column.


43. Do we have to quote transfer tax/stamps to the buyer if typically and ALWAYS paid by the seller? On the Loan Estimate, you should only disclose Transfer Taxes paid by the consumer. Refer to page 38 of the TRID Guide to Forms for more information.

44. I understand that lender-paid compensation will not be listed on the LE but will be listed on the CD. Will the compensation be included in the APR calculation? If the compensation is lender paid, it is not disclosed on the LE and is not included in the APR calculation. If the compensation is borrower paid, it is disclosed on the LE and included in the APR.

45. How is borrower paid single premium MI disclosed on the Loan Estimate and Closing Disclosure? The entire amount is disclosed in Section B, Services You Cannot Shop For.

46. How is borrower paid Split MI disclosed on the Loan Estimate and Closing Disclosure? The monthly payment amount is disclosed in the Projected Payments Chart on page 1. The upfront portion of the premium is disclosed in Section B, Services You Cannot Shop For.

47. How is Lender Paid Mortgage Insurance (LPMI) disclosed? FAMC applies a pricing adjustment for LPMI. The pricing adjustment is reflected in the rate. There is no premium to disclose on the LE or CD.

48. How is FHA MIP disclosed on the LE and CD? FHA MIP works the same as PMI with regards to disclosing on the LE and CD.

• Any monthly paid premium is disclosed in the Projected Payments Chart on page 1. • Any upfront portion of the premium is disclosed in Section B, Services You Cannot Shop

For.

49. Is the USDA Rural Housing fee disclosed any differently? This fee is similar to PMI and MIP with regards to the monthly and upfront portions of the fee.

• Any monthly paid premium is disclosed in the Projected Payments Chart on page 1. • Any upfront portion of the premium is disclosed in Section B, Services You Cannot Shop

For. In addition, USDA requires that the monthly premium for 1 month be put into escrow. Section G will reflect the collection of the monthly fee for one month.


CHANGED CIRCUMSTANCES

50. Will a new LE be given for ANY changed circumstance, or only if it effects the APR by more than 1/8 (fixed) or 1/4 (ARM)? A creditor may issue a revised Loan Estimate within 3 business days of being notified about a valid changed circumstance. Refer to section 8 of the CFPB's TRID Compliance Guide for information of Revisions and Corrections to Loan Estimates. FAMC does intend to provide a new LE for each valid changed circumstance. NOTE: For fees subject to the 10% variation, the rule permits the creditor to provide a revised Loan Estimate when the fees increase by less than 10%. However, unless the fees increase the aggregate total by more than 10% due to a changed circumstance, the revised Loan Estimate does not "re-set" the 10% tolerance and the final fees will be compared against those disclosed on the original LE or the last revised LE that exceeded the 10% tolerance. Refer to official interpretation of §1026.19(e)(3)(iv)(A)-1.ii.

51. Who will redisclose the LE when there is a valid changed circumstance? For brokered transactions, FAMC will redisclose the LE for any valid changed circumstance.

52. In the case of the appraisal fee, what would happen if the borrower was charged more due to issues with remote area, unusual property types, etc.? Appraisal fee increases that are due to circumstances not known at the time of application are considered valid changed circumstances. This would be allowed under the regulation provided the borrower was notified within 3 days of us becoming aware of the additional charges.

53. When a credit supplement is required by underwriting, is it a valid changed circumstance to increase the credit report fee and redisclose the LE? Yes.

54. How will an LO know to include a final inspection fee on the LE? If the LO is unaware that a final inspection is needed at the time the LE is initially disclosed, it would be a valid changed circumstance. At the time we become aware of the final inspection fee, an LE would be redisclosed within 3 days to include the fee.

55. What if we find out the property is in a flood zone after the LE has been issued? It would be a valid changed circumstance, since the lender was not aware of this at the time the LE was provided.

56. If we accidentally disclose a VA Funding Fee on the LE as a first time use but it is actually a subsequent use, is this changed circumstance? The VA Funding Fee is a 0% variance/tolerance fee under TRID.


• User error is not a valid changed circumstance. • If there is documented evidence that the borrower specifically stated they were eligible for

a first time use but their Certificate of Eligibility supplied later indicates they are only eligible for subsequent use, this could be a changed circumstance.

Each scenario would need to be reviewed by Management to determine if there is evidence in file to reflect a valid changed circumstance.

57. Can an applicant switch to a different type of coverage such as single premium to a split premium? Yes, this would be a valid change of circumstance. The revised disclosure reflecting changes must be given within 3 days of the applicant’s request to switch.

LENDER AND SELLER CREDITS

58. How will Seller Paid closing costs be disclosed? Seller Credits known at application are disclosed on page 2 of the LE, in the Calculating Cash to Close table. On the CD, Seller-paid closing costs will be disclosed in the middle two columns on page 2. General Seller Credits will be disclosed on page 3 of the CD, in the Calculating Cash to Close table.

59. I understand that lender credits need to be disclosed on the LE. If the initial LE discloses a closing cost credit of $2,000 and the closing costs end up being only $1,800, what happens to the $200 over disclosure of our closing cost credit? My understanding is that we may revise all fees to the borrower downwards, except for the lender closing cost credit. You are correct that the final lender credit disclosed on the CD cannot be less than what was originally disclosed on the LE. There is no guidance in the regulation regarding the application of additional closing cost credit. As long as the principal reduction is in compliance with all lender and investor requirements and is documented appropriately, this would be a viable option.

YOUR HOME LOAN TOOLKIT

60. The Settlement Cost Booklet will be replaced with the Your Home Loan Toolkit. Is FAMC ok with the borrower receiving an electronic copy of the toolkit? The borrower is allowed to receive an electronic copy of the Your Home Loan Toolkit – provided it is sent to the borrower within 3 business days of the creditor receiving the application.

61. Will providing borrowers a link to the toolkit suffice as an electronic copy? No. Providing the link to the toolkit within the application package will not be sufficient. A full copy of the Your Home Loan Toolkit must be provided (electronically via email, standard mail or in person) no later than three business days after the consumer’s application is received.


ELECTRONIC DELIVERY

62. If FAMC sends the disclosures out by email and the borrower opens and acknowledges those disclosures, is the process compliant with TRID requirements? If the borrower consents to electronic delivery, we intend to send the disclosures electronically. If the disclosures have not been acknowledged within 48 hours, we intend to have the disclosures placed in the mail to ensure they are sent to the borrower within the 3 business day requirement. This process is the same as we currently do today.

63. If an EMB approved customer uses an FAMC approved E-Signature vendor, what specific documentation will be required to confirm that the TRID disclosures were delivered within the required timeframes? If an EMB customer provides the disclosures electronically, we will require the e-sign compliant acknowledgment received by the EMB. The requirement is the same as todays.

64. Our doc provider allows us to electronically verify when the borrower(s) view the Closing Disclosure. Can you verify that this will be an acceptable verification of receipt? Electronic delivery is allowed provided it is E-Sign compliant with an FAMC approved vendor. The allowed proof of delivery for this process is an E-Sign compliant acknowledgement received by the creditor from the E-Sign vendor.

CLOSING DISCLOSURE (CD)

65. What definition of a business day is used for purposes of providing a CD? For purposes of providing the CD, a business day means all calendar days except Sundays and legal public holidays.

66. How does FAMC define consummation? FAMC defines consummation as the day the borrower becomes legally responsible for the obligation, therefore we will establish that by using the date the Note is signed.

67. Can you help me understand the requirement that the borrower receive the CD 3 days prior to consummation? Do we send the borrower a copy and they sign it at closing? Will we be requiring the customer to come into our office to review and sign the disclosure? The creditor is responsible for ensuring that the consumer RECEIVES the Closing Disclosure (CD) no later than 3 business days before consummation. (§ 1026.19(f)(1)(ii)(A) If the CD is hand delivered to the consumer, it is considered to be received by the consumer that day, but proof of delivery via a signature may be required. If it is mailed or delivered electronically, the consumer is considered to have received the CD 3 business days after it is delivered or placed in the mail (§ 1026.19(f)(1)(iii); Comment 19(f)(1)(ii)-2). However, if the creditor has evidence that the


consumer received the CD earlier than 3 business days after it is mailed or delivered, it may rely on that evidence and consider it to be received on that date. (Comments 19(f)(1)(iii)-1 and -2)

68. Does the borrower need to re-sign the same CD on the date of closing, assuming there are no changes from when they received it 3 days prior? Yes, FAMC will require the borrower to sign the CD at closing even if no changes occur; just as we have borrowers sign the TIL at closing today.

69. If the CD has been provided and there is a valid changed circumstance, can a revised LE be provided? Once a CD has been given to the borrower, the borrower can no longer be given an LE. A new CD is required along with another 3 day waiting period if APR increases by more than 1/8 (fixed) or 1/4 (ARM) – same as the current MDIA requirements. If the CD changes, but does not change the APR by the above, a revised CD will be provided to the borrower at closing.

70. What happens if a lock is extended, the lender credits are reduced and the APR increases? Lender credits are negative charges to the borrower and fall in the zero tolerance bucket. If the amount of lender credits disclosed on the CD is less than the amount of lender credits disclosed on the LE, it is an increased charge to the borrower for purposes of determining good faith and would not be allowed. Comment 19(e)(3)(i)(5). However, lender credits can decrease due to a valid changed circumstance. If the APR varies by more than 1/8th, a new CD will need to be provided and starts a new 3 business day waiting period. The CFPB published clarification on this and stated that a decrease in APR by more than an 1/8th does not require a new waiting period.

71. If the lender prepares the CD for the buyer, what about the seller? Does the closing agent still prepare some kind of similar document/HUD-1 for the seller? FAMC will work in conjunction with the closing agent to prepare the CD for the borrower and FAMC will be responsible for delivery to the borrower. FAMC will require the closing agent to prepare and deliver the seller version of the CD at or before closing.

72. A non-borrowing spouse must sign the CD on a rescindable transaction. Will a non-purchasing spouse be required to sign the CD on a purchase transaction as well? No. For purchase transactions, the CD can be given to the primary applicant or any consumer with primary liability for the loan.

73. What if a fee is disclosed on the LE, but it does not end up being charged or disclosed on the CD? The creditor should compare the sum of the charges actually paid by or imposed on the consumer with the sum of the estimated charges on the Loan Estimate that are actually performed. If a service


is not performed, the estimate for that charge should be removed from the total amount of estimated charges. (Comment 19(e)(3)(ii)-5).

74. If we send the CD to the borrower via our electronic delivery method and receive an E-Sign compliant acknowledgment, do we still have to wait three days to close? Yes. The three day waiting period is based off the date the borrower is presumed to have received the CD. If the borrower acknowledges (e-sign compliant) that they received the CD on Monday, the three business days will be Tuesday, Wednesday, and Thursday. And the loan will be able to close on Thursday.

75. How does FAMC plan to issue the CD in regards to the 3 day timeframe before closing? FAMC is planning to issue the CD and ensure it is delivered to the borrower 3 business days prior to closing. If the borrower consented to electronic delivery for the initial LE, the CD will also be sent electronically. Once the borrower acknowledges receipt electronically, the three day waiting period can start. If the LO delivers the CD in person, it will need to be signed to verify delivery and the three day waiting period can start.

76. When is day 1 of the 3 day waiting period? Is it the day disclosed? No, it is the day after. If the CD is delivered to the borrower on Monday, the three business days are Tuesday, Wednesday, and Thursday. The earliest the loan could close would be Thursday.

77. What about a cash sale where there is no lender? There would still be fees, such as attorney fees, title insurance, transfer taxes, etc. that would need to be listed on a CD/HUD-1 type document. Would the closing agent prepare the CD in that case? Yes, in those cases the Title Company or closing agent would prepare the applicable documents.

78. How will the lender know what to put in for commissions, termite, inspection fees, or other charges that the buyer or seller may be responsible for? The process will pretty much work the same as it does today. During the loan process, as fees are added via changed circumstances, they are documented. For seller information, the lender will work closely with the closing agent to get the information for the document just as they do today. Instead of FAMC sending a sample HUD-1 to the closing agent and the closing agent sending a final HUD-1 to the lender for approval, FAMC will work in conjunction with the closing agent to create and issue the borrower CD. FAMC will be responsible for delivering the CD to the borrower 3 days prior to closing.

79. Typically after receiving the appraisal, we normally do not have any fee changes. Therefore, as a broker, how do we engage with FAMC to issue the CD to the borrower and not wait until the 3 days prior to close? As a Wholesale Broker, you will not be issuing the CD. We intend to work closely with both the Broker and Settlement Agent to ensure we have all fees as accurate as possible, before disclosing the CD and ensuring the borrower receives it 3 days prior to close.


80. There is a section on the Closing Disclosure to disclose the Lender’s partial payment policy. What is FAMC’s policy on this? We may hold them in a separate account until you pay the rest of the payment, and then apply the full payment to your loan.

81. As an EMB lender, can we send the CD prior to clear to close? EMB lenders can do this but run the risk of having to eat any costs associated with a CC if outside the 3 days prior to close.

82. Will FAMC allow the 3-day waiting period to be waived after the CD is provided due to a “bona fide personal emergency”? Even though allowed by the rule, FAMC will not allow the 3-day waiting period to be waived.

83. We are an EMB lender and FAMC currently prepares our closing documents. Please confirm if this will still be the same process and if FAMC will prepare and deliver the CD. If FAMC prepares the closing documents, we will prepare the CD and disclose to the borrower on behalf of the EMB. For all transactions, the EMB will be responsible for preparing the LE.

84. What will FAMC accept as documentation of early receipt of the CD? For a CD delivered in person, a signed and dated copy of the CD is needed for proof of delivery. For a CD provided electronically, an E-Sign compliant acknowledgement received by the creditor. For a CD mailed overnight, a signed and dated copy of the delivery notice.

85. Currently, we are not collecting property taxes as a prepaid item. We only collect in the initial escrow. Are we required to show 12 months of property taxes in the prepaid (F) section of the CD even though we are not collecting? If it is not collected, then it should not be shown on the disclosure.

86. Since the lender is only responsible for providing the CD to the consumer and title is to provide the CD for the seller, if the 2 CDs don’t match, how will this be corrected at the consummation? Will there be tolerances % or will the title company be responsible to settle any differences? FAMC will work closely with the title company to ensure the CD we create is as accurate as possible. The title company will then be responsible for ensuring the seller's CD is accurate. We will be responsible for correcting the borrower's CD and the title company will be responsible for correcting the seller's CD.

87. Will FAMC be providing a CD directly to the realtors on purchase transactions? No. We will provide the CD directly to the borrower and the settlement agent will provide the CD to the seller.


88. Does the TRID rule require the loan process to be complete prior to the CD being sent? A: There are no requirements around this. HOWEVER, If the changed circumstance event occurs between the fourth and third business days from consummation, the creditor may reflect the revised charges on the CD provided to the consumer three (3) business days before consummation. If the changed circumstance event occurs after the first CD has been provided to the consumer (within the three-business-day waiting period before consummation), the creditor may use revised charges on the CD provided to the consumer at consummation and compare those amounts to the amounts charged for purposes of determining tolerance. If the changed circumstance event occurs earlier than the fourth business day from consummation and a CD has already been provided to the consumer, the CD previously provided to the consumer must be compared to final CD issued at closing for purposes of determining tolerances. Issuing a CD earlier in the loan process can limit the ability to pass along all costs associated with a valid change of circumstances.

89. Is the Loan required to be locked with the borrower prior to issuance of the CD? In other words is a locked LE required before we can issue a CD? Yes, we will not issue a CD until the loan is CTC. Locking the loan is a requirement for CTC.

Q.DISCLOSURES

90. Do we know the amount of appraisal fee’s that will be auto-populated? The appraisal amount will be automatically calculated based on the property type, loan amount, and subject address.

91. There doesn’t appear to be a spot on the Q.disclosures to enter an aggregate credit? Can this be entered in Q.disclosures as a credit somewhere? At the current time the aggregate credit is not able to be calculated on the LE.

92. Are we able to select just one Title Company for the” You Can Shop For” list versus having the 10 lowest or 10 closest? Yes, you may only select one Title provider to calculate fees and add to the SSPL.

93. With the new roll out, will we allow the external Admin to control if an individual LO has the right to access the LE Portal? At the current time Admin control is not available for the Q.disclosures portal.


94. Will the broker be able to print/view all disclosures in our package to know what we provide? The LE and disclosures will be available in the imaging folder.

95. If a broker gets started on an LE and realizes they do not have all of the information for fees is there a ‘save’ feature? Yes Q.disclosures has a “Save” button.

96. Was there a task counter (like in Q.Docs)? Yes Q.disclosures has a task counter that works in a similar way to Q.AUS.

97. How is conventional MI calculated? I believe it is a 10% tolerance field, correct? There is a drop down in Q.disclosures to select the MI Type. The portal will calculate the proper MI coverage based on the type selected. There is a zero tolerance or variance to this fee type.

98. How many title companies are in Q.disclosures? There are approximately 4400 title companies in portal.

99. Where do you see the biggest hiccups or highest percentage of errors being made on the LE so we can train our partners correctly?

• Brokers should read the sales contracts to ensure they select the correct fee types if available.

• Brokers must complete Q.disclosures within 3 days. • Brokers should be aware of the QM restrictions. • Brokers should be aware of product origination restrictions on borrower paid loans.

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