The document discusses changes to mortgage disclosure forms that take effect on October 1, 2015 under the TILA-RESPA Integrated Disclosure rule. Key changes include combining GFE and initial TIL forms into a new Loan Estimate, combining HUD-1 and final TIL forms into a new Closing Disclosure, and requiring delivery of the Closing Disclosure 3 days before closing. The definition of a mortgage application now only requires 6 key pieces of information. Lenders must provide accurate disclosures or could face penalties for violations.

1. PRESENTED BY
Hometrust Mortgage Company
1660 W Lake Houston Pkwy, Suite 505
Kingwood, TX 77345
NMLS# 149932
TILA-RESPA
INTEGRATED DISCLOSURE RULE
EFFECTIVE OCTOBER 1, 2015

2. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 NMLS# 149932
LOAN ESTIMATE VS. CLOSING DISCLOSURE

10. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 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. 1660 W Lake Houston Pkwy, Suite 505, Kingwood, TX 77345 NMLS# 149932
CONTACT US!
MIKE MARSHALL
Branch Manager
NMLS# 621079
Cell: 281-728-5853
ApplywithMikeMarshall.com
HOLLY WHITNEY
Sr. Loan Officer
NMLS# 457611
Cell: 281-705-4659
HollyWhitney.com
CONNIE THARP
Sr. Loan Officer
NMLS# 414087
Cell: 713-826-0051
ConnieTharp.com
CHELSEA DAWSON
Loan Officer
NMLS# 1083316
Cell: 281-703-7874
HomeLoansbyChelsea.com