The document summarizes changes to mortgage disclosure forms and regulations taking effect on October 1, 2015 under the TILA-RESPA Integrated Disclosure rule. Key points include: the Loan Estimate and Closing Disclosure forms will combine and replace existing forms, lenders must provide disclosures within 3 days of receiving an application, and certain fees are subject to zero variance between initial disclosure and closing. The purpose is to provide clearer and more consistent information to consumers.

1. PRESENTED BY
Hometrust Mortgage Company
711 W. Bay Area Blvd. Suite 102
Webster, TX 77598
NMLS# 149932
TILA-RESPA
INTEGRATED DISCLOSURE RULE
EFFECTIVE OCTOBER 1, 2015

2. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
WHAT IS CHANGING???
• Definition of an application
• GFE and intial TIL being combined and replaced
with the new Loan Estimate form
• HUD-1 and final TIL being combined and
replaced with the new Closing Disclosure form
• Addition of a 3 day Closing Disclosure review
requirement
• Appraisal fee is now subject to zero variance
• Most lenders will now provide the Closing
Disclosure that will be approved by title company

3. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
WHAT IS THE REASON FOR THE CHANGE?
• “Know Before You Owe” rule
• Information on the old forms is overlapping and
language is inconsistent
• Consumers find the forms confusing
• Lenders and settlement agents find the forms
burdensome to provide and explain
• Loan Estimate and Closing Disclosure will look
almost exactly the same making it much easier for
consumers to compare
• New forms were put to the test, and consumers
preferred them over the old forms

4. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
WHAT TRANSACTIONS DOES THE RULE COVER?
Applies
• All loans for residential
properties
• Properties > 25 acres and
vacant land
• Construction loans
• Lot loans
Does not apply
• HELOCs
• Reverse mortgages
• Mortgages secured by a
mobile home or dwelling
not attached to real
property

5. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
DEFINITION OF AN APPLICATION:
• We have an application when these 6 pieces of
information are provided:
– Name
– Income
– Social Security Number
– The property address
– Property value estimate
– Loan amount sought
• “any other information deemed necessary by the loan
originator” has been removed from the definition
• Sales contract not required for it to be considered an
application
• 3 day clock starts ticking as soon as a property address
and sales price is provided

6. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
WEB APPLICATIONS
• Cannot prevent borrowers from
providing all six pieces of an
application
• Cannot remove an address
once submitted
• If a property address is inputted,
then it can no longer be a pre-
approval and the 3 day clock
starts ticking

7. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
LOAN ESTIMATE
• The new Loan Estimate form combines and
replaces the old GFE and Initial Truth in Lending
forms
• Lender must provide within 3 business days of
receipt of an “application”
• Must also be delivered no later than the 7th
business day before consummation
• Borrower signed Loan Estimate does not equate
intent to proceed

8. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
CLOSING DISCLOSURE
• The new Closing Disclosure form combines and
replaces the old HUD-1 and Final Truth in
Lending forms
• Lender must provide 3 DAYS prior to closing
• Hometrust will provide to borrower and closing
agent
• Lender is responsible for tracking delivery and
receipt

9. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
LOAN ESTIMATE VS. CLOSING DISCLOSURE

10. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
VARIANCE-ZERO TOLERANCE
• Fees paid to creditor or mortgage banker
(Lender fee)
• Fees paid to an affiliate of the creditor or
mortgage banker such as appraisal fee
• Fees paid for services consumer not permitted
to shop for such as credit report or tax service
fee
• Transfer taxes if applicable
• Lender credits (cannot decrease without a rate
change)

11. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
10% VARIANCE CATEGORY
• Fees paid for unaffiliated third-party services
consumer permitted to shop for such as surveys
• Recording fees
• Aggregate Increase Limited to 10%
• Example – all charges in 10% category = $1,000
• $300 Settlement Agent Fee increases by $50.
Since the $50 increase only raises total of
category to $1,050 it is only a 5% increase and
is allowable.

12. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
CHARGES THAT CAN CHANGE
• Prepaid interest
• Property insurance premiums
• Amounts placed into escrow
• Fees paid to third party service providers
selected by consumer not on list provided by
creditor
• Fees paid for third party services not required by
creditor, such as Home Warranty. These fees
may be paid to affiliates

13. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
NEW DISCLOSURE ITEM TIP
• Total Interest Percentage also know as TIP
• Total amount of interest that would be paid over
the life of the loan as a percentage of the loan
amount
• This assumes the loan is not paid off early
• While this is towards the back of the LE and CD,
it is a noticeable figure and questions may come
from borrowers concerning the figures

14. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
CLOSING DISCLOSURE TIMELINE
• Borrower must have 3 days to review the CD
before loan ‘consummation’ can occur
• If CD is in borrower’s hands on Monday, earliest
close date is Thursday
• If CD is mailed or emailed, have to allow for 3
days delivery before the 3 day review begins
• If provided in person and signed, or sent by e-
sign e-disclosures and opened the 3 day review
begins

15. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
WHAT WILL RESTART 3 DAY CLOCK?
• Only 3 changes will require a new 3 day review:
– APR increases by more than .125%
– A Prepayment Penalty is added
– Loan product changes
– Lenders have been required to provide a 3-day review for
APR increases greater than .125% since 2009!
– The Prepayment Penalty and Loan Product change are
new to the rule but a very unlikely.

16. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
ESIGN - E-DISCLOSURES
• All TRID related disclosures fall under the
ESIGN laws
• ESIGN laws govern how disclosures that are not
provided face-to-face or via some type of
physical mail delivery must be provided
• Required to be able to show borrower consent
and proof that the recipient has the ability to
receive it
• Encompass E-delivery has that capability

17. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
HOW DOES THIS AFFECT YOU AS THE REALTOR?
• Be prepared for 30-35 days needed to close
• Once contract is signed by all parties and
delivered to lender our timeline begins
• Avoid last minute contract changes or new
addendums

18. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
KEYS TO SUCCESS!
• Identify closing title company (the exact location) early in
the process
• Clearly define buyer’s and seller’s costs
• Have all invoices for services (termite, survey, home
warranty, etc) to your lender as soon as possible
• Have all HOA costs clearly disclosed
• Use USPS website to get correct address for contract
• Give lender the listing agent’s info along with the
contract
• Communicate regularly with your lender and title
company
• Make sure name on contract matches the customer’s
DL, or DD214 for VA customers

19. 711 W. Bay Area Blvd. Suite 102, Webster, TX 77598 NMLS# 149932
CONTACT US!
KIM BABINEAUX
Sr. Loan Officer
NMLS# 215867
Cell: (281) 455-0999
www.kimbabineaux.com
JERI KNAPP
Personal Mortgage Consultant
NMLS# 218782
Cell: (281) 467-8355
www.jeriknapp.com
SCOTT MEDSGER
Sr Loan Officer
NMLS# 216820
Cell: (281) 338-2200
www.scottmedsger.com
ANDREA BRINEGAR
Sr. Mortgage Banker
NMLS# 213192
Cell: (409) 457-6767
abrinegar.hometrust.com
JEFF WORTHAM
Branch Manager
NMLS# 218022
Cell: (713) 369-6555
jwortham.hometrust.com
KEVIN MORTON
Sr Loan Officer
NMLS# 221116
Cell: (832) 818-1021
kmorton.hometrust.com