CUNA Mutual Group Proprietary Reproduction, Adaptation or Distribution Prohibited © 2015 CUNA Mutual Group, All Rights Reserved. TILA/RESPA: More than Just the Loan Estimate and Closing Disclosure Presented by:

2 Presenter Maureen Clark Regulatory Compliance Manager LOANLINER ® Documents CUNA Mutual Group

3 Agenda Review of the Truth In Lending Act (TILA)/Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure Rule Current documents that require updates Transition period to new disclosures New documents required by the Rule –Settlement Service Providers List –Escrow Cancellation Notice Action steps and resources

4 Integrated Disclosures Review Combination of RESPA and TILA disclosures Scope: Most closed-end consumer credit transactions secured by real property Effective August 1, 2015 Purpose is to create disclosures that are easier to understand and use

5 Integrated Disclosures Review Loan Estimate Initial TILA Disclosure RESPA Good Faith Estimate Provided 3 business days after application Closing Disclosure Final TILA Disclosure HUD-1 / HUD-1A Received 3 business days before consummation

6 Integrated Disclosure Review Which loans require the new disclosures? Included Closed-end consumer transactions Secured by real property (land) First and subordinate liens Includes – Purchases, refinances, closed-end home equity, vacation and second homes, loans on 25 acres or more, vacant lot loans, construction-only loans Excluded Home Equity Lines of Credit (HELOCs) Reverse mortgages Loans secured by mobile homes or a dwelling not attached to real property

7 Integrated Disclosures Review Disclosures based on loan type & purpose Different requirements for loans with or without a seller If disclosure is not required, it cannot show Cannot use “n/a” or leave something blank Documents Are Very Dynamic at the Loan Level New documents New data fields New required calculations New Disclosures and Calculations Testing and Training Want more information about the dynamic nature of the new disclosures? Check out for previous webinars.

8 Documents Being Replaced Document NameNumberReplacement Truth in Lending Disclosure Fixed Rate* MXX12Loan Estimate/Closing Disclosure Truth in Lending Disclosure Adjustable* MXX1BLoan Estimate/Closing Disclosure Good Faith EstimateEST77Loan Estimate HUD-1/1A Settlement Statement RM001/EST22Closing Disclosure

9 Documents Being Replaced Document NameNumberReplacement Servicing DisclosureRM002Loan Estimate Appraisal Disclosure*RM004Loan Estimate

10 New Closed-End Home Equity Note Document NameNumberReplacement Closed End Home Equity Note and Disclosure (Multi State and State Specific) EST55 and State Specific Versions Closing Disclosure and Standalone Note Updated version will be sent to current customers automatically. You must call to cancel, if applicable.

11 Available or Archived? After August 1, 2015, the following documents will continue to be available: –TILA Disclosure Fixed Rate and Adjustable Rate Still required for consumer loan secured by a dwelling –Appraisal Disclosure Still required for a first lien secured by a dwelling which could include HELOCs Documents Available Documents Being Archived The following documents will be archived and removed from customer accounts at the end of 2015: –Good Faith Estimate (EST77) –Servicing Disclosure (RM002) –HUD-1/1A Settlement Statement (RM001/EST22) –Closed End Home Equity Note and Disclosure (EST55 and State Specific Versions)

12 Transition Period If a loan application is received on or before July 31, 2015 use: At ApplicationAt Closing Initial TILA Disclosure Fixed (MXX12) or Adjustable (MXX1B) Final TILA Disclosure For Closed-end Home Equity, use EST55 or state specific For First Mortgage, use a stand alone TILA disclosure Good Faith Estimate (EST77)HUD-1/1A (RM001/EST22) Servicing (RM002) and Appraisal Disclosures (RM004) If a loan application is received on or after August 1, 2015 use: At ApplicationAt Closing Loan EstimateClosing Disclosure This is not a complete list of documents required for a real estate transaction. This list only addresses disclosures affected and created due to the Integrated Mortgage Disclosure Rule.

13 Transition Period Successful Implementation of the New Disclosures –Training Appropriate disclosures to use both pre and post-effective date Change in scope for new disclosures –Tracking Ensure that the correct disclosures are provided throughout the loan process End date for using current disclosures –Timing Timing requirements for Loan Estimate and Closing Disclosure Credit Union is ultimately responsible for timely provision

14 New Timing Requirements Loan Estimate Timing –Delivered or placed in the mail, 3 rd business day after application “Application” definition updated. –Additionally, must be delivered or placed in the mail no later than the 7 th business day before consummation. Closing Disclosure Timing –Received at least three business days before consummation. Once the Closing Disclosure has been provided, revised Loan Estimate cannot be given. The Settlement Agent may be the party providing the Closing Disclosure at this time, but the Credit Union is still responsible for the accuracy and confirming the delivery of the disclosure.

15 New Documents Settlement Service Providers List

16 New Documents Scope Closed-end consumer credit transactions secured by real property where the creditor allows a consumer to shop for a settlement service Timing Must be provided no later than the 3 rd business day after receipt of the consumer’s application. Content The list must identify at least one provider for each service for which the consumer is permitted to shop. Settlement Service Providers List

17 New Documents Escrow Cancellation Notice

18 New Documents Scope Closed-end consumer credit transactions secured by a first lien on real property, other than a reverse mortgage, for which an escrow account was established in connection with the transaction and will be cancelled. Timing If the consumer requests cancellation, the disclosure must be received no later than three business days before the closure of the escrow account. If the creditor or servicer cancels the account, the consumer must receive the disclosure no later than 30 business days before closure of the escrow account. Content The disclosure has very specific information and requirements. Escrow Cancellation Notice

19 Action Items - Documents Loan Estimate and Closing Disclosure –Complete Questionnaire –Approve Quote New Documents Settlement Service Providers List and Escrow Cancellation Notice –Determine necessity and order –Develop process for use and train staff Current TILA and RESPA Disclosures –Assess loan programs –Cancel unnecessary documents Transition Planning –Process development and training for staff

20 Action Items – Business Decisions and Contacts Decisions to Make –What loan programs to do? –What services will you allow a member to shop for? –Update policies and procedures Who to contact? –System provider –Forms provider –Settlement Agent –Other outside business partners

21 Action Items - Internal Review current procedures Implementation –Who is in charge? –What needs to change? –How will the change occur? –What other partners do you need to be successful? Update policies and procedures Test new documents and system changes Training for staff –New disclosures and documents –Transition period

22 Resources LOANLINER Resources –Webinar Recordings –The Game-Changing Impacts and Action Steps – August 19, 2014The Game-Changing Impacts and Action Steps – August 19, 2014 –It’s A Whole New World – October 15, 2014It’s A Whole New World – October 15, 2014 –Lending Resource Center - Current LOANLINER Customers – –Continue checking for upcoming webinars –Contact LOANLINER Compliance Support – –Call , Option 4

23 Resources Consumer Financial Protection Bureau (CFPB) CFPB's TILA-RESPA Integrated Disclosure Rule CFPB's TILA-RESPA Integrated Disclosure Rule Compliance Guide CFPB's TILA-RESPA Integrated Disclosure Rule Guide to Forms CFPB's TILA-RESPA Integrate Disclosure Rule Disclosure Timeline CFPB's TILA-RESPA Integrated Disclosure Rule Loan Disclosure Forms & SamplesCFPB's TILA-RESPA Integrated Disclosure Rule Loan Disclosure Forms & Samples CFPB’s Readiness Guide

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