Business Partner Integrated Disclosure FAQ

The CFPB was tasked with simplifying the loan process for consumers. In an effort to simplify the loan process the CFPB is combining the Good Faith Estimate (GFE) and initial Truth In Lending (TIL) disclosure into one document which is called the "Loan Estimate". In addition to combining the initial disclosures; the Final TIL, Itemization of Amount Financed, and HUD Settlement Statement are also being combined into a single document titled the "Closing Disclosure"

The new disclosures are required for loans with a RESPA application date of October 3, 2015. If a loan is disclosed with the current GFE/TIL, the loan must close with the current GFE/TIL/HUD. Lenders are not permitted to begin using the forms before October 3, 2015.

The TILA-RESPA rule applies to most closed-end consumer credit transactions secured by real property. Some specific categories of loans are excluded from the rule. Specifically, the TILA-RESPA rule does not apply to HELOCs, reverse mortgages or mortgages secured by a mobile home or by a dwelling that is not attached to real property, or land loans.

Yes, the TILA-RESPA Integrated Disclosures rule changed the definition of a RESPA application. An application is considered complete when a Loan Officer collects the following pieces of information from the consumer:

• The property Address
• The mortgage Loan amount sought
• The consumer’s Income
• An Estimate of the value of the property
• The consumer’s Name
• The consumer’s Social security number to obtain a credit report

The CFPB has removed the 7th "catch all" item which was "any other information deemed necessary by the loan originator".

While the CFPB's definition of a RESPA application has changed, Highland HomeLoans already complied with this new requirement. We did not allow the "catch all" item previously, therefore the definition change has no impact to Highland HomeLoans.

Highland HomeLoans defines consummation as the day the Note is executed.

Highland HomeLoans defines a business day as all calendar days except Sundays and legal public holidays.

No, Highland HomeLoans will not allow this timing to be waived.

Yes, certain fees/charges must always print on the Loan Estimate and/or the Closing Disclosure regardless if that charge is applicable to the loan.

Examples of fees / charges that are in a fixed position and must always display are:

• "__% of Loan Amount (Points)" must always be the first line within the Origination Charges section on both the LE and CD
• "Recording Fees and other Taxes" must always be the first line within the Taxes and Other Government Fees section of both the LE and CD
• "Transfer Taxes" must always be the 2nd line within the Taxes and Other Government Fees section the LE; however the charges can be itemized on the CD

Yes, fees need to be itemized in alphabetical order on both the LE and CD.

The rule allows for the option to include a signature line on both the Loan Estimate and the Closing Disclosure. Highland HomeLoans has chosen to include a signature line on both disclosures; however a signature will only be required on the Closing Disclosure.

Yes, Highland HomeLoans offers electronic delivery with the borrower's consent.

Real Estate Agents should inform borrowers that the disclosures are changing. Agents can also assist borrowers in the collection of documents and consistently communicate any changes or updates to the transaction in a timely manner to their Highland HomeLoans representative and Settlement Agent.

Yes, the consumer must provide their Intent to Proceed prior to the Lender imposing fees on the consumer other than a bona fide credit report fee.

No, a signature on the Loan Estimate is not considered the borrower’s Intent to Proceed.

Yes, the initial Loan Estimate expires 10 business days from the date the creditor provided the LE to the consumer if the consumer does not expressly provide their Intent to Proceed.

Creditors are permitted to provide to the consumer a revised Loan Estimate if the consumer indicates an intent to proceed more than 10 business days after the Loan Estimate was originally provided. No justification is required for the change to the original estimate of a change other than the lapse of 10 business days.

The creditor may not provide a revised Loan Estimate on or after the date the creditor provides the consumer with the Closing Disclosure. Because the Closing Disclosure must be provided to the consumer no later than 3 business days prior to consummation, this means the consumer must receive a revised Loan Estimate no later than 4 business days prior to consummation.

A Loan Estimate must be re-disclosed to the borrower within three business days of the change in circumstance.

Valid changed circumstances remain relatively the same in comparison to the current rule. Examples include:

• Change circumstances that affect the consumer’s eligibility for the terms for which the consumer applied or the value of the security for the loan
• Revisions to the credit terms are requested by the consumer
• The interest rate was not locked when the Loan Estimated was provided
• The consumer indicated intent to proceed more than 10 business days after the Loan Estimate was originally provided
• The loan is a new construction and settlement is delayed by more than 60 calendar days

Yes and No. The rule does not change the concept of tolerances and there are still 3 tolerance categories: 1) 0% Tolerance, 2) 10% Tolerance and 3) No Tolerance.

However, which fees/charges fall within which tolerance category has changed significantly. For example, Creditor Affiliate Fees are now in the 0% Tolerance category as well as Fees paid to non-affiliated settlement service providers that the lender does not permit the consumer to shop for (i.e., Appraisal Fee, Credit Report Fee, HOA Certification Fee).

Highland HomeLoans will prepare the borrower’s Closing Disclosure. The Settlement Agent will be responsible for preparing the seller’s Closing Disclosure. Collaboration and communication early in the process with Highland HomeLoans’s settlement agents will be a must. We will continue to work together to ensure all fees and other important information is accurate and complete.

Highland HomeLoans will deliver the Closing Disclosure to the borrower. Since the lender is accountable for the compliance of the Closing Disclosure, Highland HomeLoans will provide the Closing Disclosure to the borrower at least 3 business days before closing and retain evidence of receipt.

Yes, there are separate disclosures for the borrower and the seller.

If the seller’s agreement is attributable to a charge listed on Closing Disclosure page 2, then the amount should be listed with the item and designated as Seller-Paid at Closing or Seller-Paid before Closing on Closing Disclosure page 2. Any general credit to the borrower from the seller may be listed as a lump sum under Summaries of Transactions.

The settlement agent is responsible for conducting the closing and disbursement of loan proceeds.

Yes, Highland HomeLoans will utilize a centralized mailbox for communication with Settlement Agents. The email address is closingdisclosure@Highland HomeLoans.com.

No, at this time there is no integration with our Loan Origination System.

Yes, we will accept a mock HUD-1 as sufficient documentation of fees/charges provided it contains all of the necessary information to draft a Closing Disclosure.

Other closing related documents will be provided by the day of closing.

The new documents contain sensitive borrower information and can only be provided to a third party, such as a Real Estate Agent, if the borrower provides written authorization to the Lender.

The new documents contain sensitive borrower information and can only be provided to a third party, such as a Real Estate Agent, if the borrower provides written authorization to the Lender.

At this time, the only additional information required from Settlement Agents is to provide their licensing information and their Legal Name. This information can be provided to their loan officer or emailed to riskanalystreview@Highland HomeLoans.com. If the Settlement Agent has obtained their ALTA certification and their identifier is provided, this information will also be added to their profile.

The Closing Disclosure must be delivered to the borrower at least 3 business days prior to closing.

When a Closing Disclosure is mailed, the mailbox rule presumes that the disclosures are received 3 days after they are placed in the mail. This means if a Closing is scheduled for Monday, the disclosures would need to be mailed the Monday before closing, so the closing can take place on time.

Only 3 changes require a new 3-day review:

1. The APR (annual percentage rate) increases by more than 1/8 of a percent for fixed-rate loans or 1/4 of a percent for adjustable loans.
2. A prepayment penalty is added, making it expensive to refinance or sell.
3. The basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest-only payments.

All parties must notify Highland HomeLoans’s Closing Department immediately so it can be determined if the changes require a new 3 day waiting period or if the revised Closing Disclosure can be delivered at closing.

If there is a change at the closing table, contact your Highland HomeLoans Branch, Loan Officer or Processor to request an updated Closing Disclosure and/or Closing Package. Please note, dependent on the change request, a new 3-day waiting period may apply; however most changes do not require an additional 3-day waiting period.

Scheduling the closing will require collaboration between all parties involved in the transaction.