TILA-RESPA Integrated Disclosures Setting the Stage – Understanding Changes, Managing Expectations and Creating Opportunities

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Overview Discuss communicating changes with partners Share tools, flyers, ideas to stand out as expert Reveal rock star presenter tips AGENDA 3

Strategic Compliance Partners Dodd-Frank Integration The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) directed the Consumer Financial Protection Bureau (CFPB) to integrate the mortgage loan disclosures under TILA and RESPA. 4

Strategic Compliance Partners Dodd-Frank Integration Engaged in both consumer and industry research. Once completed the CFPB conducted analysis of public comment and outreach for more than a year. Large-scale quantitative study of its proposed integrated disclosures with approximately 850 consumers. 5

Strategic Compliance Partners Why the Change? Mortgages are complex transactions that may include risky features. Consumers currently receive different, but overlapping, federal disclosure forms with the terms and costs of mortgage loans. Because these forms are confusing for consumers, Congress directed the Consumer Financial Protection Bureau (CFPB) to create new forms.

Strategic Compliance Partners Existing Forms

Strategic Compliance Partners New Disclosures

Strategic Compliance Partners Loan Estimate GFE Initial TIL Closing Disclosure HUD-1 Final TIL August 1, 2015

Strategic Compliance Partners Types of Loans Final rule applies to most closed-end consumer mortgages

Strategic Compliance Partners DETAILS OF NEW FORMS

PRE-APPLICATION Prior to receiving the 6 specific items of information, lenders may provide consumers with written estimates, but any pre- application written estimate must contain a disclaimer that it is not an official Loan Estimate.

Strategic Compliance Partners 6 ITEMS THAT TRIGGER APPLICATION A – Address L – Loan Amount I – Income E – Estimated Value of the Property N – Name S – Social Security Number

LOAN ESTIMATE 14 Must be sent within 3 business days after the lender or broker receives the consumer’s application 3 Business Days 7 Business Days Must be received no later than 7 business days prior to consummation. 4 business days for re-disclosure. Add 3 business days if mailing. Consummation A transaction is consummated when the consumer becomes contractually obligated to a creditor. State Law State law prevails so this means follow your state definition of consummation.

Strategic Compliance Partners WHAT IS CONSUMMATION? 15 Consummation occurs when the consumer becomes contractually obligated to the creditor on the loan. Depends on applicable state law. For example, in California, consummation occurs when the borrower signs the closing documents. Loan Estimate or revised Loan Estimate must be provided 7 days prior to signing and the Closing Disclosure must be provided 3 days prior to signing.

Strategic Compliance Partners 4 DAY WAITING PERIOD Revised Loan Estimate Must Be Received 4 Business Days BEFORE Closing/Consummation 7 Business Days if mailing the Loan Estimate

Strategic Compliance Partners WAIVER OF WAITING PERIOD? Rare, rare, very, very RARE! a bona fide personal financial emergency Must waive this timing requirement in writing A pre-printed form may not be used for this purpose Preventing the loss of the consumer’s home to foreclosure would be an example of a bona fide personal financial emergency.

Strategic Compliance Partners NEVER SHALL THE TWO MEET 3 Days Before Closing The borrower must receive the Closing Disclosure 3 business days prior to closing or consummation. 4 Days Before Closing A revised Loan Estimate must be received, or considered to have been received by the borrower no later than 4 business days prior to closing. The revised estimate may be given in person or mailed. If mailed, the disclosure estimate will be considered received 3 days after it is placed in the mail so must add 3 business days to the 4 business days.

Strategic Compliance Partners Closing Disclosure: Page 2 – Lists Real Estate Commission

Strategic Compliance Partners Wrap Up Effective Date Applications taken on and after August 1, 2015 Applies to all closed-end mortgage loans except Reverse Mortgages Adds 3 days onto closings If revisions to the Loan Estimate can add additional 7 days onto closings Work with a professional Mortgage Advisor who is experienced

Strategic Compliance Partners Thank You (Contact Information)

Strategic Compliance Partners Disclaimer This document is current as of February 7,2015. This document does not represent legal interpretation, guidance or advice from the any of the sponsors, speakers or promoters, including Fidelity National Title, Morf Media, Strategic Compliance Partners and Go2Training. While efforts have been made to ensure accuracy, this document is not a substitute for the rule. Only the rule and its official Interpretations can provide complete and definitive information regarding requirements. This document does not bind any of the speakers or their companies and does not create rights, benefits, or defenses, substantive or procedural that are enforceable by any party in any manner.