1. Presented by: Lacy Smith Wallace KAAR Affiliate Member Regions Bank

2. Special Information Booklet learning objectives Closing Disclosure Summary Loan Estimate Introduction Agenda 2

3. Special Information Booklet Closing DisclosureLoan Estimate Agenda introduction Summary Introduction 3

4. introduction GFETIL BACKGROUND HUD-1 4

5. introduction BACKGROUND 2010: RESPA changes 2011: TILA changes DODD FRANK ACT 2013: Final Regs published Oct 3, 2015: New Requirements CFPB 5

6. introduction WHICH LOANS ARE AFFECTED?  Applies to: –Residential Mortgages –HELOANS  Does not apply to: –Home equity lines of credit (HELOCs) –Certain no-interest housing assistance programs –Reverse mortgages –Loans for personal property not attached to real estate (e.g., houseboat or manufactured home) 6

7. introduction NEW DOCUMENTS GFEInitial TIL Loan Estimate + = 7

8. introduction NEW DOCUMENTS Final TIL Closing Disclosure HUD-1 + = 8

9. introduction SPECIAL INFORMATION BOOKLET OldNew = 9

10. Special Information Booklet Closing Disclosure Agenda Introduction Summary Loan Estimate loan estimate 10

11. loan estimate PURPOSE  Discloses key features, costs, and risks  Combines GFE and initial TIL  Is based on best information available 11

12. loan estimate WHAT IS AN “APPLICATION”?  Includes six data elements: –Name –Income –Social Security number –Property address –Estimate of property value –Loan amount Standardizes definition for all Lenders 12

13. loan estimate TIMING REQUIREMENTS  No change in timing requirements –“Business day” still includes Saturdays  Send by third business day after app received (Unless app denied or withdrawn within 3 days)  Deliver at least seven business days before closing 13

14. loan estimate FEE & DOCUMENT COLLECTION  Mirrors current policy  Borrower must receive Loan Estimate before: –Payment collected –Requiring documentation (e.g. Sales Contract) Note: Borrowers can still offer docs voluntarily  Lender must document borrower’s intent to proceed 14

15. loan estimate FEE TOLERANCES  Same three tolerance categories: –Fees that cannot change –Fees that can increase by a limited amount (i.e., 10%) –Fees that can change Certain fees have changed categories: –Fees paid to third parties if consumer not permitted to shop Appraisal Credit Report Flood Certificate Tax Certificate Some transaction specific fees (e.g., CP inspections) 15

16. loan estimate LENDER CREDITS Cannot decrease (Loan Estimate vs. Closing Disclosure) Exception: When rate is locked/re-locked after initial Loan Estimate provided 16

17. loan estimate REVISED LOAN ESTIMATE  Permitted when a “changed circumstance” occurs –Required within three business days  Permitted when the interest rate is locked Must be received at least four business days prior to closing 17

18. Closing Disclosure Agenda Introduction Loan Estimate Summary Special Information Booklet special info booklet 18

19. special info booklet PURPOSE  Provides basic information about the mortgage process  Required for all purchase money transactions –Including 1 st position HELOCs –Alternative booklets available for HELOCs 19

20. special info booklet TIMING REQUIREMENTS  No change in timing requirement –Provided with initial Loan Estimate  Not required if: –If application denied or withdrawn within the three-day period 20

21. Agenda Introduction Loan Estimate Summary Special Information Booklet Closing Disclosure closing disclosure 21

22. closing disclosure PURPOSE  Replaces HUD-1 and “final” TIL  Provides information helpful in understanding loan costs  Provided by the creditor 22

23. closing disclosure TIMING REQUIREMENTS Must be received three business days prior to closing –Saturdays included –Receipt date dependent on delivery method Exceptions: –Seller’s copy –Personal financial emergency 23

24. closing disclosure Thurs. Fri.Sat.Sun.Mon.Tues.Wed.Thurs. SENT (PROVIDED) RECEIVED EARLIEST DATE TO CLOSE REC’D CLOSE SENT TIMING REQUIREMENTS: EXAMPLE 1 Sent (No “Early Receipt” date) 24

25. closing disclosure Thurs. Fri.Sat.Sun.Mon.Tues.Wed.Thurs. SENT (PROVIDED) RECEIVED EARLIEST DATE TO CLOSE REC’D SENT CLOSE TIMING REQUIREMENTS: EXAMPLE 2 Emailed (With “Early Receipt” date) 25

26. closing disclosure REVISIONS BEFORE CLOSING New three day wait period required when: –APR outside of standard tolerances –Loan product changes (Fixed to ARM) –Prepayment penalty is added New three day wait period NOT required when: –Changes made outside of 3 listed above (Must be available for inspection 1 day before closing) 26

27. closing disclosure MISCELLANEOUS REQUIREMENTS  Upcharges not allowed Fee cannot be charged for preparing Closing Disclosure 27

28. Agenda Introduction Loan Estimate Special Information Booklet Closing Disclosure Summary summary 28

29. summary WHAT ARE THE MAJOR CHANGES? New disclosures: –Loan Estimate –Closing Disclosure Revisions to Special Information Booklet Reclassified categories of certain fees New waiting period for Closing Disclosures 29

30. summary HOW CAN YOU HELP?  Consult lender when establishing Contract closing date  Provide Closing Agent Name at time of Contract  Encourage customer to obtain Insurance quickly  Assist in setting appropriate expectations with customer –Understand required waiting periods –Understand impact changes can have on closing  Encourage customer to use eConsent to receive Disclosures via email 30