1. UNDERSTANDING the New Loan Estimate and Closing Disclosure

2. Presented by Presenter Name

3. Disclaimer  This presentation is for general informational and educational purposes only and should not be construed or relied upon as legal advice. The information in this presentation is provided “as is” without any representations or warranties, express or implied, including, but not limited to, any representation that the information is complete, true, accurate, up-to-date or non-misleading. If you have specific questions about any information provided herein, you should consult your attorney or other professional legal services provider.

4. TILA/RESPA Integrated Mortgage Disclosure Forms Final Rule  Congress passes Dodd-Frank Act in 2010 to address financial crisis  Law includes establishment of the Consumer Financial Protection Bureau  CFPB tasked with bringing all consumer protection statutes under one regulator  Dodd-Frank requires integration of the TILA and RESPA mortgage disclosure requirements  In 2013, CFPB publishes final rule integrating the Good Faith Estimate, Truth in Lending disclosure and the HUD-1 Settlement form, to take effect October 3, 2015*  * As proposed by the CFPB on June 24, 2015.

5. Why Were the TILA and RESPA Forms Integrated? All parties – consumers, industry professionals and regulators – agreed the current forms were confusing. The CFPB created and tested the forms to protect the consumer:  Making the terms of the loan clearer and more transparent  Ensuring the buyer can readily shop and compare loans  Creating similarity between forms to make sure the consumer can easily compare the loan promised to them with the final closing disclosure IT’S ALL ABOUT THE CONSUMER

6. October 3, 2015*, Implementation Date Forms will go into effect on Oct. 3  All lenders and settlement providers will begin using the new forms on the same day  Early use of the integrated disclosures is NOT permitted  If application is received on Oct. 2, the early TIL and GFE will be used at application, and the final TIL and HUD-1 will be used at closing  For all applications received on or after Oct. 3, the new Loan Estimate and Closing Disclosure will be used  Title companies will maintain old and new software and procedures during the transition *On June 24, the CFPB issued a proposed amendment to extend the original TRID date of Aug. 1 to Oct. 3. This date is subject to final approval by the CFPB, following the expiration of the comment period on July 7.

7. Providing the Loan Estimate  Lender must deliver or place the Loan Estimate in the mail within 3 business days after receipt of the application  Homebuyer is considered to have received the disclosures 3 business days after they are sent or placed in the mail  The Loan Estimate must be delivered to the potential borrower at least 7 business days before consummation. (In unusual circumstances, a bona fide personal financial emergency waiver can override the 7-day rule)

8. Definition of Application Six items needed for application process:  Name  Income  Social Security number to obtain a credit report  Property address  Estimated value of the property  Mortgage loan amount sought

9. Settlement Service Providers  Lender must provide a written list identifying at least one available provider for each settlement service for which the consumer is permitted to shop  Must include sufficient information to allow the consumer to contact the provider  Must inform the consumer that he/she may choose a different provider for that service  Must be separate from the Loan Estimate  “Shopping” means the consumer can use providers not on the list  The written list is a referral under RESPA

10. Written List of Providers  Model Form H-27

11. TOLERANCES

12. Tolerances Final rule expands the 0% tolerance category  0% Tolerance category:  Fees paid to the creditor or mortgage broker  Affiliates of the creditor or mortgage broker  Third-party services for which the consumer cannot shop  Transfer taxes  10% Category (aggregate amount):  Services for which the consumer can shop, but selects a provider on the written list of providers  Recording fees

13. Tolerances (continued) No tolerance limitation  Optional/voluntary services (including owner’s title insurance)  Prepaid interest  Property insurance premiums  Amounts placed into an escrow, impound, reserve or similar account

14. Tolerances (continued) Changed circumstances and borrower-requested changes still apply  Have to send revised Loan Estimate within 3 business days of the change  Special rule for rate locks

15. LOAN ESTIMATE

16. Page 1  Terms  Payments  Closing costs

17. LOAN ESTIMATE Page 2  Itemization  Rounding  AIR/AP Tables

18. LOAN ESTIMATE Page 3  TIP new from Dodd-Frank Act  ECOA Appraisal and RESPA servicing disclosures included

19. PROVIDING THE CLOSING DISCLOSURE

20. Providing the Closing Disclosure  Closing Disclosure required to be received by the consumer no later than 3 business days before consummation  Allow more time for mail delivery and other delivery methods outside of hand-delivering in person  Recommendation is to send form 7 days in advance to provide for delivery time

21. Providing the Closing Disclosure (continued)  Business days for this disclosure requirement includes Saturdays  Definition of business day for purposes of Closing Disclosure: All calendar days except Sunday and certain federal holidays: New Year’s Day, the birthday of Martin Luther King, Jr., Veterans Day, Thanksgiving Day and Christmas Day  Three-day rule exception: Bona fide personal financial emergency with written statement by consumer

22. Providing the Closing Disclosure (continued) When must lender re-disclose:  The APR becomes inaccurate  1/8 of 1 percent* for regular loans  1/4 of 1 percent* for irregular loans**  The loan product changes  Adjustable rate to fixed-rate mortgage  A prepayment penalty is added  This effectively increases the interest paid on the loan and the costs to consumer to refinance at a later date *This includes changes above or below the originally determined APR. ** An irregular transaction is one that includes one or more of the following: multiple advances, irregular payment periods or irregular payment amounts (other than first or final payments).

23. SETTLEMENT AGENTS AND THE CLOSING DISCLOSURE

24. Settlement Agents and the Closing Disclosure  Creditor/lender is ultimately responsible for providing the Closing Disclosure  This includes the HUD-1 information for which the settlement agent was previously responsible  Settlement agent may provide the Closing Disclosure  But the creditor is still ultimately liable

25. Settlement Agents and the Closing Disclosure  Creditor and settlement agent can divide responsibilities for providing the Closing Disclosure at different times, or for different portions of the Closing Disclosure  Discussions are taking place now between agents and lender clients to talk through what makes sense and determine the flow of disclosures between the agent and lender  Wells Fargo and Bank of America have provided closing agents with information on how these lenders will handle the delivery of the Closing Disclosure to their consumers (continued)

26. Settlement Agents and the Closing Disclosure  Settlement agent is responsible for providing the Closing Disclosure to the seller  Required to be provided no later than the day of consummation  Required to provide a copy to the creditor if on different disclosure than borrower  If within 30 days after consummation, an event causes the Closing Disclosure to be inaccurate with respect to an amount the seller pays, the settlement agent must provide a corrected Closing Disclosure within 30 days after learning of the change  Implementation challenge: The transfer of data between creditors and settlement agents (continued)

27. Post-Consummation Requirements  Changes within 30 days after consummation: If an event causes the Closing Disclosure to be inaccurate with respect to an amount the consumer pays, the creditor must provide a corrected Closing Disclosure within 30 days after learning of the change  Non-numeric clerical errors: Not a violation if the creditor provides corrected disclosures within 60 days after consummation  Tolerance cures: To cure a tolerance violation, the refund and corrected Closing Disclosure has to be provided within 60 days after consummation

28. Closing Disclosure Page 1  Terms  Payments  Closing costs

29. Closing Disclosure Page 2  Itemization  No HUD-1 line numbers  POCs  Real estate  Agent/underwriter  Alphabetical order  Same fee names  Dynamic  Lines can be shifted  LC and OC pages

30. Closing Disclosure Page 3  Calculating Cash to Close  Summaries of Transactions  Borrower’s Transaction  Seller’s Transaction

31. Closing Disclosure Page 4  New Dodd-Frank disclosures

32. Closing Disclosure Page 5  New Dodd-Frank disclosures

33. NORTH AMERICAN TITLE COMPANY As the facilitator of the real estate transaction, North American Title agents, escrow officers and closers are dedicated to being a valued and knowledgeable resource from the moment a title order is open until the transaction is closed. Our training and expertise with the new forms will help smooth the transaction process, as we work through the intricacies of the new forms with you. If you require more in-depth information about the new forms, please contact your own legal counsel or visit the Consumer Financial Protection Bureau website at www.consumerfinance.gov Resources for your clients As your home buyers and sellers enter into the real estate transaction, they will have many questions and concerns. We have provided resources for them on our website under Products & Services at: www.nat.com We have specific resources concerning the new forms at: www.nat.com/CFPB or invite them to check out our educational videos at: www.youtube.com/user/NATCVIDEO

34. Q AND A

35. Disclaimer This presentation is for general informational and educational purposes only and should not be construed or relied upon as legal advice. The information in this presentation is provided “as is” without any representations or warranties, express or implied, including, but not limited to, any representation that the information is complete, true, accurate, up-to-date or non- misleading. If you have specific questions about any information provided herein, you should consult your attorney or other professional legal services provider.

36. THANK YOU JOHN DOE TITLE INFO