CHANGES TO REGULATION Z as of July 30, 2009 Equal Housing Lender. Prospect Mortgage is located at 15301 Ventura Blvd., Suite D300, Sherman Oaks, CA 91403. Prospect Mortgage, LLC is a Delaware limited liability company licensed by the CA Dept. of Corps. under CRMLA and operates with the following licenses: AZ Mortgage Banker License #BK0903027, #BK0909362, #BK0908046, #BK0908050, #BK0908056, BK#0908057, #BK0908058, #BK0908731, BK#0903112, BK#0903912, BK#0906650, BK#0906913; To check the license status of your CO mortgage broker, visit www.dora.state.co.us/real-estate/index.htm; GA Residential Mortgage License #16984; IL Residential Mortgage Licensee #6424; MA Mortgage Lender/Broker License #MC2011; MS Licensed Mortgage Co.; MT Residential Mortgage Lender Licensee #120; NV Division of Mortgage Lending Mortgage Banker #1173 and Mortgage Broker #3095; Licensed by the NH Banking Dept.; Licensed Banker-NJ Dept. of Banking and Insurance #9932415; Operates as Metrocities Mortgage, LLC in NY (Licensed Mortgage Banker ر NYS Banking Department); Operates as Metrocities Mortgage, LLC in OH (Ohio Mortgage Broker Act, Lic # MB.803629.000); OR Mortgage Lender Licensee #ML-2006; PA Dept. of Banking license #1740; RI Licensed Lender #20021343LL, Broker #20041643LB; licensed by the VA State Corp. Commission as MC-2195. This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any time and without notice. This is not an offer to enter into a rate lock agreement under MN law‭, ‬or any other applicable law‭. – 0509-63‬

The Truth in Lending Act (TILA) requires that certain disclosures be provided to loan applications within three (3) business days of when an application is taken or received by Prospect Mortgage The TILA rules are outlined in Regulation Z The federal government has published changes to Regulation Z, which add new requirements for disclosures, and the timing for loan closings based on when disclosures are sent to borrowers Additionally, there are new rules concerning the collection of up-front fees from the applicant Introduction

The Truth in Lending Act (TILA) requires that certain disclosures be provided to loan applications within three (3) business days of when an application is taken or received by Prospect Mortgage

The TILA rules are outlined in Regulation Z

The federal government has published changes to Regulation Z, which add new requirements for disclosures, and the timing for loan closings based on when disclosures are sent to borrowers

Additionally, there are new rules concerning the collection of up-front fees from the applicant

The changes to Regulation Z affect ALL mortgage loans originated by Prospect from ALL business units The law applies to loans in all 50 states, plus the District of Columbia The changes take effect for all new applications taken or received on July 30 th , 2009 and after Types of Loans Covered and Effective Date of Changes

The changes to Regulation Z affect ALL mortgage loans originated by Prospect from ALL business units

The law applies to loans in all 50 states, plus the District of Columbia

The changes take effect for all new applications taken or received on July 30 th , 2009 and after

The TILA and Regulation Z require that initial disclosures must be sent to the applicant within three (3) business days of the day the application is taken or received by Prospect Initial disclosures include the Good Faith Estimate (GFE), the Truth-in-Lending (TIL) Statement, and state specific disclosures The new rules require that Prospect cannot schedule the loan closing until at least seven (7) business days after the initial disclosures are mailed to the applicant A business day includes Saturdays, but does NOT include Sundays, and recognized Federal holidays Example: Initial Disclosures mailed to applicant on Monday, July 6th . Closing may not take place until Tuesday, July 14 th or after. Initial Disclosure Requirements

The TILA and Regulation Z require that initial disclosures must be sent to the applicant within three (3) business days of the day the application is taken or received by Prospect

Initial disclosures include the Good Faith Estimate (GFE), the Truth-in-Lending (TIL) Statement, and state specific disclosures

The new rules require that Prospect cannot schedule the loan closing until at least seven (7) business days after the initial disclosures are mailed to the applicant

A business day includes Saturdays, but does NOT include Sundays, and recognized Federal holidays

Example: Initial Disclosures mailed to applicant on Monday, July 6th . Closing may not take place until Tuesday, July 14 th or after.

If there are changes to a borrower’s loan program, loan terms, and/or APR, the initial disclosure package must be re-disclosed to the borrower prior to closing If the borrower’s APR increases or decreases by more than .125% for a fixed rate loan , or by more than .25% for an adjustable rate mortgage (ARM) , the initial package must be re-disclosed If the initial package is re-disclosed to the borrower, Prospect cannot schedule the closing until at least three (3) business days after the borrower has received the re-disclosure If the re-disclosed package is mailed to the borrower, Prospect must wait three (3) business days to assume the borrower received it – then, we need to wait another three (3) business days before we schedule the closing Example: re-disclosure of initial package mailed to borrower on Monday, July 6th – closing may not take place until Monday July 13 th or after Re-Disclosure of Initial Documents

If there are changes to a borrower’s loan program, loan terms, and/or APR, the initial disclosure package must be re-disclosed to the borrower prior to closing

If the borrower’s APR increases or decreases by more than .125% for a fixed rate loan , or by more than .25% for an adjustable rate mortgage (ARM) , the initial package must be re-disclosed

If the initial package is re-disclosed to the borrower, Prospect cannot schedule the closing until at least three (3) business days after the borrower has received the re-disclosure

If the re-disclosed package is mailed to the borrower, Prospect must wait three (3) business days to assume the borrower received it – then, we need to wait another three (3) business days before we schedule the closing

Example: re-disclosure of initial package mailed to borrower on Monday, July 6th – closing may not take place until Monday July 13 th or after

If the re-disclosed packaged is personally delivered to the borrower by the Loan Officer, the closing may take place in three (3) business days Example: re-disclosure hand-delivered to borrower by Loan Officer on Monday, July 6th – Closing may take place on Thursday, July 9 th or after E-mailing or faxing the re-disclosed package to the borrower does NOT shorten the waiting period for closing – we must still wait six 6 business days, and not three (3) If Prospect Loan Officers want to hand-deliver the re-disclosed package to the borrower, they will use a Courier Service to messenger the documents, so that we have independent documentation from a 3 rd party company to confirm the date the borrower received the re-disclosures. Re-Disclosure of Initial Documents cont’d

If the re-disclosed packaged is personally delivered to the borrower by the Loan Officer, the closing may take place in three (3) business days

Example: re-disclosure hand-delivered to borrower by Loan Officer on Monday, July 6th – Closing may take place on Thursday, July 9 th or after

E-mailing or faxing the re-disclosed package to the borrower does NOT shorten the waiting period for closing – we must still wait six 6 business days, and not three (3)

If Prospect Loan Officers want to hand-deliver the re-disclosed package to the borrower, they will use a Courier Service to messenger the documents, so that we have independent documentation from a 3 rd party company to confirm the date the borrower received the re-disclosures.

Thank You! (Mike Platt) Loan Officer Direct: 434-295-1944 Cell: 434-760-2801 [email_address]

(Mike Platt) Loan Officer Direct: 434-295-1944 Cell: 434-760-2801 [email_address]