1. CORP. NMLS#167441 1 For business and professional use only. Not for Consumer Distribution. NDC GFE Guide PMAC Lending Services, Inc., February, 2014 Disclaimer: This guide provides basic information about RESPA requirements. It is not a substitute for the RESPA guidelines published and regulated by the CFPB, nor is it intended to be an interpretation of the RESPA guidelines. In the event of discrepancies, the official guidance should be followed. The final regulation and additional resources can be found at: http://www.ecfr.gov/cgi-bin/text- idx?c=ecfr&SID=9cab7962ab7aa3e468e911638c817e0b&rgn=div5&view=text&node=12:8.0.2. 14.17&idno=12http://www.ecfr.gov/cgi-bin/text- idx?c=ecfr&SID=9cab7962ab7aa3e468e911638c817e0b&rgn=div5&view=text&node=12:8.0.2. 14.17&idno=12

2. CORP. NMLS#167441 2 For business and professional use only. Not for Consumer Distribution. Purpose  Understand GFE requirements  Recognize GFE errors  Understand Changed Circumstance  Understand when re-disclosure is and is not required

3. CORP. NMLS#167441 3 For business and professional use only. Not for Consumer Distribution. Delivery of the GFE  The initial GFE prepared by the Broker in a transaction is the binding GFE  The GFE must be prepared within 3 business days of the loan application  The GFE must include the names of all the borrowers  RESPA defines an application as receiving the following minimum items required to issue a GFE:  Borrower’s Name  Borrower’s Social Security Number  Borrower’s Monthly Income  Property Address  Property Value  Loan Amount

4. CORP. NMLS#167441 4 For business and professional use only. Not for Consumer Distribution. Line 1: Must be the date of the GFE or after Line 2: Must be at least 10 business days from the date of the GFE, Excluding Sunday and Holidays Line 3: Cannot be empty – 0, N/A or a number are acceptable Line 4: Cannot be empty – Must be 1 or greater

5. CORP. NMLS#167441 5 For business and professional use only. Not for Consumer Distribution. Line 1: Must be lock expiration date Line 2: Must be at least 10 business days from the date of the GFE, Excluding Sundays and Holidays Line 3: Must be the number of days of the lock term Line 4: Must be 0 or N/A - Cannot be empty

6. CORP. NMLS#167441 6 For business and professional use only. Not for Consumer Distribution. The Summary of Your Loan section must match current terms shown on the 1003 and TIL. Loan amount (must be NOTE LOAN amount on Government loans with financed MIP or Funding fees) Loan term Interest rate Initial monthly payment Questions pertaining to an ARM loan, Negative Amortization loan, Balloon loan or Prepayment Penalty must be completed

7. CORP. NMLS#167441 7 For business and professional use only. Not for Consumer Distribution. Escrow Account Information The monthly payment must match the payment in the summary of your loan section. The appropriate impound box must be marked

8. CORP. NMLS#167441 8 For business and professional use only. Not for Consumer Distribution. Origination Charge Block 1 The fees disclosed in Block 1 will include fees paid to you, the non-delegated correspondent, and PMAC. Some examples: Processing Administrative fee Origination Underwriting Application fee Block 1– Cannot increase unless the loan amount increases and the origination or mortgage Broker fee is disclosed as a percentage of the loan amount on the original Fee Worksheet or Itemization of Amount Financed PMAC will net fund our fees from the origination fees

9. CORP. NMLS#167441 9 For business and professional use only. Not for Consumer Distribution. Your credit or charge (points) for the specific interest rate chosen Block 2 One of the 3 options must be selected: Box 1: Used for Par Pricing Scenario Box 2: Used for Lender credits to cover third party closing costs Box 3: Used in the event the loan has discount points

10. CORP. NMLS#167441 10 For business and professional use only. Not for Consumer Distribution. Required Services These are charges for services the Lender requires to complete the transaction Block 3 Examples: Appraisal Credit Report Tax Service Flood Certification Up-front Mortgage Insurance Premiums (UFMIP) (must be disclosed, even if it is being financed) VA Funding Fee (must be disclosed, even if it is being financed) Condo certification

11. CORP. NMLS#167441 11 For business and professional use only. Not for Consumer Distribution. Title Services and Lender’s Title Insurance Block 4 Examples: All Charges associated with the title services and settlement (closing agent services) Subordination (if prepared by closing agent or title company) Miscellaneous Fees are not allowed: fees must be specific

12. CORP. NMLS#167441 12 For business and professional use only. Not for Consumer Distribution. Owner’s Title Insurance Block 5 Disclosure required on all purchase transactions even if it is going to be paid by the seller 0 or N/A is acceptable on refinance transactions

13. CORP. NMLS#167441 13 For business and professional use only. Not for Consumer Distribution. Required Services the Borrower Can Shop for Block 6 Examples of Services that Borrowers CAN shop for: Pest Inspections, Survey, Re-Key Fee, Transaction Coordinator, Natural Hazard Disclosure Report Examples of services that Borrower CANNOT shop for: Notary Fee Only the Lender required services must be disclosed

14. CORP. NMLS#167441 14 For business and professional use only. Not for Consumer Distribution. Government Recording Charges Block 7 This block must have a fee disclosed. Fees in this box cannot change without a valid change of circumstance due to loan amount change

15. CORP. NMLS#167441 15 For business and professional use only. Not for Consumer Distribution. Transfer Taxes Block 8 The amount cannot increase but may decrease Increases have zero tolerance unless loan amount increases City/County/State tax stamps Can be called recordation tax, intangible tax, excise tax, doc stamps, deed stamps, mortgage stamps etc. Not just on purchases. Some areas have a transfer tax on refinance transactions.

16. CORP. NMLS#167441 16 For business and professional use only. Not for Consumer Distribution. Initial Deposit for your escrow account Block 9 The dollar amount must be complete when the loan has escrows

17. CORP. NMLS#167441 17 For business and professional use only. Not for Consumer Distribution. Daily Interest Charges Block 10 Daily interest amount Number of days Anticipated settlement date with a total interest charge

18. CORP. NMLS#167441 18 For business and professional use only. Not for Consumer Distribution. Homeowner’s Insurance Block 11 Hazard Flood Hurricane Earthquake Purchase Transactions Premium due is required to be disclosed on all purchase transactions Refinance Transactions Existing policy premium due does not need to be disclosed New policy premiums must be disclosed

19. CORP. NMLS#167441 19 For business and professional use only. Not for Consumer Distribution. A Service Provider List (SPL) is required on all transactions, even if the borrower is not allowed to shop for any services. It must be loan specific and include verbiage that states the borrower is not required to use the service provider listed. Different formats are acceptable provided they meet minimum requirements. If you are allowing the borrower to shop for services, the list should include local service providers. An address and phone number for the service provider must be included

20. CORP. NMLS#167441 20 For business and professional use only. Not for Consumer Distribution. Common GFE errors to avoid All three (3) pages of the GFE are required and must be legible GFE must match the original Fee Worksheet or Itemization of Amount Financed Date of GFE must be within 3 business days of the initial 1003’s interviewer date Date in line 2 of Important Dates Section cannot be less than 10 business days (excluding Sundays and Holidays) Corrections to typed GFE’s are not acceptable Amounts in A + B do not balance on page 2 Owners title fee missing on a purchase transaction White out on the GFE is not acceptable Resubmission is not allowed as a means to increase origination

21. CORP. NMLS#167441 21 For business and professional use only. Not for Consumer Distribution. Change of Circumstance is … Changed situation or inaccurate information provided by the borrower after issuance of the GFE The revised GFE must be issued within 3 business days of discovering the change or being notified of the change Any revised GFE must be documented on the Changed Circumstance Form and must included the following Date of Change Date of Re-Disclosure Detail of Change Indicated fees changes is associated with the changed circumstance Changes of circumstance that occur prior to submission are required to be submitted upfront.

22. CORP. NMLS#167441 22 For business and professional use only. Not for Consumer Distribution. Brought to you by PMAC Lending Services Inc.