On August 1, 2015 the culmination of several years of regulatory directives will be realized when these two regulations are combined for the purpose of mortgage disclosures. Starting on that date, customers who apply for a mortgage should no longer receive a good faith estimate and a truth in lending estimate. Instead, a new form called a loan estimate should be generated. For many community banks, the overarching questions is "will you be ready?"

1. Upcoming Changes to RESPA / TILA
Getting It Right
April 2, 2015

2. Long Time Coming
• The regulatory imperative to combine RESPA and
TILA has existed for more than 17 years!
• Both of these regulations do similar things and
create similar responsibilities at banks.
• The biggest difference is that RESPA only applies
to mortgages while TILA applies to all consumer
loans
• The basic purpose of both is to inform customers
of the total cost of borrowing money

3. Well Earned
• As with all consumer regulations, these two rules
were developed in response to unethical and
illegal practices by financial institutions
• TILA’s purpose
– “It is the purpose of this subchapter to assure a
meaningful disclosure of credit terms so that the
consumer will be able to compare more readily the
various credit terms available to him and avoid the
uninformed use of credit, and to protect the
consumer against inaccurate and unfair credit billing
and credit card practices.”

4. Well Earned
• RESPA is supposed to make it easier to shop
from one bank to another
• RESPA’s Purpose:
– is “to effect certain changes in the settlement
process for residential real estate that will result in
more effective advance disclosure to home buyers
and sellers of settlement costs”

5. Changes are Coming
• The TILA/RESPA rules does a number of things
• The GFE and the initial Truth in Lending
estimate have been combined into a new form
called the loan estimate
• The loan estimate is due within three business
days of the receipt of an application

6. Changes are Coming
• The HUD-1 and the final Truth in lending
statement have also been combined into a
new form called a closing document.
• The closing document has to be delivered
three business days before the loan is closed.
• THESE RULES START ON AUGUST 1, 2015
• For exempt loans, such as HELOCs- the old
GFE and HUD-1 can still be used

7. Prevented
• Imposing fees on a consumer before the consumer has
received the Loan Estimate and indicated an intent to
proceed with the transaction
• Providing written estimates of terms or costs specific to
consumers before they receive the Loan Estimate
without a written statement informing the consumer
that the terms and costs may change
• Requiring the submission of documents verifying
information related to the consumer’s application
before providing the Loan Estimate

8. Loan Estimate

9. Closing Statement

10. Closing Statement

11. Closing Statement

12. Closing Statement

13. Closing Statement

14. Other Rules
• Exemptions
• 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
• Retention Rules
• Three years for the Loan Estimate
• Five years for the Closing statement

15. Summary
• August 1, 2015 is a Absolute Start
• The Loan Estimate replaces the GFE and the
TILA
• No charges or information without the loan
estimate
• Good Faith means the borrower pays less than
what is on the Loan estimate
• The other rules still apply!

16. Upcoming Changes to RESPA / TILA
Getting It Right
April 2, 2015