Part 5: Loan Estimate – Details of Disclosure Completion

The following information is intended for general information purposes with the goal of assisting Ellie Mae’s customers in complying with the new KBYO regulations. This information is provided as a courtesy to Ellie Mae’s customers and Ellie Mae makes no representation or warranty regarding the accuracy of the information set forth herein, and you may not rely on this information to ensure your company’s compliance with the KBYO regulations. This FAQ should not be construed as legal advice or opinion on any specific facts or circumstances, including the application of the KBYO regulations. You are advised to consult your own compliance staff or attorney regarding your specific residential mortgage lending questions or situation to ensure your compliance with all applicable laws and regulations.
What name is used for the Creditor/Lender?
For transactions without a mortgage broker; the creditor making the disclosures must be identified as the creditor. Creditor is a person who regularly extends consumer credit that is subje...
How will state auditors look upon disclosures with no lender name or identifier? Are you doing anything to obtain CFPB guidance on this issue?
See also the answer to the previous question, "What name is used for the Creditor/Lender?" The mortgage broker must make a good faith effort to disclose the name and address of the credito...
If we are a broker and close in our name and use our warehouse line to fund the loan, but then the loan is purchased from us after the closing, which name will go on the Loan Estimate as creditor?
There is not sufficient information to completely answer this question. In many cases, as long as the "broker or mini-correspondent" is acting in the capacity as a creditor in a true seco...
What date is placed in the Date Issued field?
The date the Loan Estimate is delivered to the consumer or placed in the mail. The method of delivery does not affect the Date Issued. For example: Creditor hand d...
Regarding the Date Issued field, what if there is a mortgage broker?
In this case date the mortgage broker mails or delivers Loan Estimate to the consumer should be used, if the mortgage broker receives the application. Citation(s)...
Do you update the Date Issued field to the current date if a revised Loan Estimate is delivered?
Yes. Regulation Z defines the date issued as the date the creditor or mortgage broker mails or delivers the Loan Estimate to the consumer. Therefore if a revised disclosure is issued it ne...
What information is placed in the Property field if the address is unavailable?
The address including the zip code of the property that secures or will secure the transaction (complete address for purposes of the U.S. Postal Service) should be entered. If the address ...
If FIRREA allows for a real estate evaluation vs. an appraisal, do you disclose the evaluation's value as an estimated property value or as the appraised value?
At the time of delivery of the Loan Estimate, "If the creditor has obtained any appraisals or valuations of the property for the application at the time the disclosure is issued to the con...
For Loan Term can you use months or can you use decimals instead?
The Loan Term should be stated in years or months, or both, as applicable. For example: Term >= 24 months and not equal to a whole numbe...
What would I disclose as Purpose on a construction-permanent combined disclosure?
Construction, unless the transaction also is associated with the purchase of the property. Citation(s): Commentary ¶37(a)(9)
What information is placed in the Loan ID# field?
A Loan ID Number determined by the creditor should be entered. Because it must allow for the identification of the particular credit transaction, a creditor must use a unique loan identifi...
What information is placed in the Loan ID# field if the creditor is unknown?
Assuming the Creditor's Loan ID# is not reasonably available to the mortgage broker it may be left blank. CFPB staff has said this is consistent with official commentary, which states the ...
What Time and Time Zone is disclosed for the Rate Lock and Loan Estimate expiration date/time?
The disclosure requires the applicable time zone for all times provided, as determined by the creditor. For example: A creditor is located in New York and determi...
Do we need to change the Time Zone if daylight savings is in effect?
The disclosure requires the applicable time zone for all times provided, as determined by the creditor. The time zone itself would not change as result of daylight savings time being in ef...
What if the broker doesn’t know to which investor they will be sending the loan so they don’t know the time zone of the creditor?
The Loan Estimate is a creditor required disclosure; if a mortgage broker issues the Loan Estimate the creditor still maintains responsibility for ensuring that the requirements of §1026....
Do we have to change CDT to CST when time changes in the areas where there is daylight savings vs. standard time?
The creditor should use the time zone appropriate to the actual time zone at the time. For instance, in the example provided under the commentary to the rule states, "if the creditor is lo...
If the Rate Lock Box is checked "YES", why is the additional verbiage appearing in these screen samples? It kind of doesn't make sense to display that on a locked rate except for the expiration date.
The additional language regarding "Before closing, your interest rate, points, and lender credits can change unless you lock the interest rate", is promulgated language contained in the mo...
On a Loan Estimate for a locked rate, how does the consumer know the rate lock expires for funding on a refinance?
There is no allowance for placing a notice on the Loan Estimate regarding the distinction that the rate lock expiration date for a refinance is tied to the funding date (disbursement date)...
The Rate Lock box on the Loan Estimate has a "yes or no" option. We primarily do home equity lending and there is no "lock" and no points. How is that handled?
In the case of a closed-end transaction where the purpose is a Home Equity Loan (meaning not a purchase money, refinance or construction loan), you would disclose the interest rate lock as...
Does rounding take place in every single step of the calculations or only at the final result?
If a dollar amount that is required to be rounded has component unrounded numbers, the unrounded numbers are added up and then the resulting amount is rounded. If an amount that is require...
Is everything rounded up?
When rounding is required the number is rounded to the nearest dollar, whether it’s up or down. Citation(s): §1026.37(o)(4)(i)
Does the whole dollar amount round up or down to the nearest whole dollar or percent?
The rule uses standard rounding (less than 5 is down, 5 and more is up). Citation(s): Commentary ¶37(o)(4)(i)(A)
It’s understood that if a text field is blank then do not use N/A, but if a numeric field is blank should we use 0 (zero)?
It depends on the section of the Loan Estimate. Certain sections, like the numeric fields for the Projected Payments Table, require "0" in some circumstances and "-" in others. In the Calc...
How do I disclose an Interest Rate on the Loan Terms table?
Unrounded number. It may be disclosed out to 2 or 3 decimals. If it is a whole number truncate at decimal point. Examples: 3...
How does one disclose an interest rate of 3.5% on the Loan Terms table? Would it be 3.5% or 3.50%?
It would be disclosed out to two decimals as 3.50%. Citation(s): §1026.37(o)(4)(ii)
Can the "Estimated Total Monthly Payment" row use a different periodic type, for example, "Estimated Total Yearly Payment"?
Yes. Wherever "monthly" is used to describe the frequency of any payments or uses "month" to describe the applicable unit-period the creditor can substitute the appropriate term to reflec...
How will USDA monthly payments be reflected in the projected payments since it decreases every year?
The loan estimate requires the creditor to disclose the initial periodic payment or range of payments. The disclosure required is of the actual periodic payment or range of payments that c...
Is Flood Insurance disclosed in the Projected Payments Table?
Yes. It would be reflected in the Projected Payments Table Estimated Escrow row, if applicable. It also would be reflected in the Estimated Taxes, Insurance & Assessments section. Section ...
What fees and charges are disclosed on the Loan Estimate?
The Loan Estimate contains good faith estimates of the fees and charges that will be paid by or imposed on the consumer. A charge ‘‘paid by or imposed on the consumer’’ refers to t...
Can you talk about the use of estimates on a loan estimate? What if a lender has made a good faith effort to obtain a fee, but can't obtain it? How do we indicate the amount reflected on the Loan Estimate is an estimate?
The disclosures are required to reflect the terms of the legal obligation between the parties, and if any information necessary for an accurate disclosure is unknown to the creditor the cr...
The Loan Estimate has a fixed number of fee lines and it was said that if you have more fees than lines, you will have to combine them. Is there any recommendation on what can/should be combined or is it all up to the Lender?
An addendum to the Loan Estimate may not be used for items described under "Origination Charges" or "Services you cannot shop for". If the creditor is not able to itemize every service and...
Are the settlement services listed in random order?
In disclosing the "Closing Cost Details" all loan costs associated with the transaction are to be labeled using terminology that describes each item, subject to the requirements of paragra...
Will the Origination Charges now be broken down for individual fees?
Creditors determine the level of itemization of "Origination Charges" that is appropriate. The creditor may use a general label that uses terminology that clearly and conspicuously describ...
Can an origination fee be disclosed as a percent?
Origination charges other than "points" are disclosed using the dollar amount. For purposes of the Loan Estimate and Closing Disclosure, "points" are charged in connection with the transac...
Where would Home Owners Association (HOA) fees be located?
It depends on type of payment. Specific fees should be placed under the following categories: B. Services Cannot Shop For ...
If our customer does not escrow do we still need to disclose HOA fees over the first year?
What will be required is a statement that the consumer will not have an escrow account, the reason why an escrow account will not be established, a statement that the consumer must pay all...
Where may Conventional PMI, FHA MIP, VA Funding Fee, and USDA/RHS Guarantee Fee be found on the Loan Estimate?
It depends on the type of payment: Specific fees can be found under the following scenarios: Services Did Not Shop For - Fee charged at consummation a...
For banks that have a large footprint and if every loan has a different title company, so how would they be able to know fees upfront?
You will either need to ascertain the fees charged by each of these title companies, you have the option of using "average charges", or the use of estimates in "good faith". ...
Regarding tax proration accuracy on the Loan Estimate – will this be reflected in other cost and can this be updated without re-disclosure but updated to actual cost on Closing Disclosure?
Depending on the transaction, for purposes of the Calculating Cash to Close Section, Adjustments and Other Credits line, Commentary ¶37(h)(1)(vii)-6 states: "Adjustments that require addi...
If we have additional recording fees being charged to the borrower, where should they be itemized?
Under the subheading "Taxes and Other Government Fees," on the first line, the sum of all recording fees and other government fees and taxes (except for transfer taxes paid by the consumer...
Currently our document preparation fee is reflected under the 801 charges. Which section would our document preparation fee now appear?
The document preparation fee would still be considered an origination charge and be located on the Loan Estimate under the "Closing Cost Details – Origination charges" section. Under the...
Where would a real estate commission or owner’s title policy paid by the consumer be disclosed on the Loan Estimate?
Under "Other Costs, H. Other". Any other amounts the consumer is likely to pay or has contracted with a person other than the creditor or loan originator to pay at closing and of which the...
Where would I place a tax proration from the seller to the buyer?
Under "Other Costs, H. Other". Any other amounts the consumer is likely to pay or has contracted with a person other than the creditor or loan originator to pay at closing and of which the...
Should real estate commissions paid by the borrower be disclosed on the loan estimate?
Yes, in "Other Costs, H. Other". Any other amounts the consumer is likely to pay or has contracted with a person other than the creditor or loan originator to pay at closing and of which t...
Where are Lender Credits disclosed?
In Section J. Total Closing Costs represent the sum of non-specific lender credits and specific lender credits. Non-specific lender credits are generalized payments from the creditor to th...
Do loans containing closing costs paid by the Lender require any fees to be disclosed since they are not paid by the borrower?
The Loan Estimate applies to all estimated closing costs disclosed in good faith whether the charge was paid by or imposed on the consumer. Citation(s): §1026.19(...
You mention that lender credits are not included in the "Total of Payments" are seller paid fees. Are they also excluded if identified separately and listed in seller column?
To the extent known by lender, disclose as Seller Credits under Calculating Cash to Close. Citation(s): §1026.37(h)(1)(vi) and Commentary ¶37(h)(1)(vi)
Where are Seller Credits disclosed?
To the extent known by lender, disclose as Seller Credits under Calculating Cash to Close. Seller Credits are the total amount the seller will pay for total loan costs as determined by §1...
If the borrower isn't paying for the Owner's Title Policy, does it even have to be disclosed at all?
Yes. It would appear either as a Lender Credit under the total closing costs or as a Seller Credit under the "Calculating Cash to Close" section. Citation(s): §10...
If the contract states the Seller is to pay for the owner’s title policy, would that mean that it would not need to be disclosed on the Loan Estimate?
It still needs to be disclosed. It would appear as a Seller Credit under the "Calculating Cash to Close" section. Citation(s): §1026.37(h)(1)(vi) and Commentary ...
What about the fees charged by Title Companies? Those are not known at the point of sale or even in the middle of the process necessarily.
Disclosures may be estimated when the exact information is unknown at the time disclosures are made. Information is unknown if it is not reasonably available to the creditor at the time th...
Do we need to disclose fees that we know will be paid by the lender?
Yes. There also would be an associated lender credit (non-specific) disclosed under the total closing costs. Citation(s): §1026.37(g)(6)
If we are doing a one-time close construction loan, would the interest only payments during construction be included in the AP table?
Not necessarily. The Adjustable Payment Table is disclosed when the periodic principal and interest payment may change after consummation. If the loan does not contain these features, the ...
The construction period interest rate may also differ from the start rate/initial rate. How is that seen on this form, if at all?
If the interest rate may increase after consummation, a separate table under the master heading "Closing Cost Details" and under the heading "Adjustable Interest Rate (AIR) Table" that con...
Could a contact have both a state license ID and an NMLS ID#?
Yes, although the NMLSR ID should be entered for the appropriate party if one has been assigned. In the event the creditor or the mortgage broker has not been ass...
What goes in the blanks before the word "License ID" in the far left column?
The state abbreviation for the associated license number. Citation(s): §1026.37(k)(1)(2)
Are discount points paid included in TIP?
TIP = total amount of interest (including prepaid interest). Discount points are prepaid finance charges but they are not "interest" for purposes of the TIP. Citat...
I am not able to get my numbers to match on the TIP. Can you please repeat the formula?
You will need to look at the amortization schedule. Add up all of the "interest payments" for the life of loan, then add the amount of per diem interest, and finally divide that amount by ...
For the Total Interest Percentage (TIP) calculation, is the loan amount the same as the Amount Financed or the Total Loan Amount?
The TIP is a percentage of the amount of credit extended which would correspond to the Note Amount. Amount Financed is a defined term in Regulation Z, and has its own calculation and meani...
Any thoughts on how to explain the Total Interest Percentage (TIP) to consumers?
The Total Interest Percentage (TIP) = The total amount of interest that is paid over the loan term as a percentage of the loan amount. For example, if the Loan Amount is $100,000 and the t...
Does the Total Interest Percentage (TIP) base the calculation on information compiled from the Amortization schedule?
When calculating the total interest percentage, the creditor assumes that the consumer will make each payment in full and on time, and will not make any additional payments. The figures pr...
Does the Total Interest Percentage (TIP) calculation follow the same tolerance requirement as the APR calculations?
There is no tolerance specified regarding the TIP. Citation(s): §1026.37(l)(3)
How does calculating the TIP occur on ARM loans?
By using a composite rate. Citation(s): Commentary ¶17(c)(1)-8 and Commentary ¶37(l)(3)-2
Is the Total Interest Percentage (TIP) a life-of-loan field? Must it be retained in a servicing system?
There are no provisions requiring use or disclosure of the TIP beyond disclosure on the Loan Estimate and Closing Disclosure. Citation(s): Commentary ¶37(l)(3) ...
For the contact information table, if there's no mortgage broker, may that column and header be omitted?
If there is no mortgage broker involved in the transaction, the column for the Mortgage Broker is left blank; but the column remains on the Closing Disclosure Contact Information table. In...
Must the initial or revised Loan Estimate be signed by applicant?
Signature lines are optional and their use is determined solely by the creditor. Citation(s): ¶1026.37(n)(1) & (2)
For property-related costs (specifically insurance) on a construction loan where escrow will not be established, often builder’s risk insurance is not in place until vertical construction begins. Would we still need to disclose the builder’s risk under property related costs?
If the cost of the builder’s risk insurance is being paid by the consumer and the costs are known prior to consummation for the construction loan, or can be estimated at the time of cons...
Is the rule's prohibition on using "N/A" or a "-" when fees don't apply pre-emptive of state requirements regarding no blanks spaces on disclosures?
Section §1026.28 provides information regarding inconsistent disclosure requirements where there is a conflict between federal and state laws. This section additionally allows for a state...
Disclaimer: The above information is intended for general information purposes with the goal of assisting Ellie Mae’s customers in complying with the new KBYO regulations. This information is provided as a courtesy to Ellie Mae’s customers and Ellie Mae makes no representation or warranty regarding the accuracy of the information set forth herein, and you may not rely on this information to ensure your company’s compliance with the KBYO regulations. This FAQ should not be construed as legal advice or opinion on any specific facts or circumstances, including the application of the KBYO regulations. You are advised to consult your own compliance staff or attorney regarding your specific residential mortgage lending questions or situation to ensure your compliance with all applicable laws and regulations.

CFPB announcement regarding the delay of TRID

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

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

Popular KBYO questions

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