It is Atlantic Bay’s mission to ensure that our loan officers have all of the tools and information necessary to make the loan experience enjoyable for our clients and partners. We achieve this through our innovation, ongoing training and consistent communication.

1. TRID
TILA/RESPA Integrated Disclosures
Are you prepared?
The New
Loan Estimate
and
Closing Disclosure

2. The 2007 Housing Market
The Climate
• Interest rates were low and economic confidence was
high
• Homeownership was viewed as an entitlement, not a
privilege
• Buyers were extremely eager to buy a home
• Paying significantly more than the appraised value
• Entering into exotic loans, with risky and unstable features
• Qualifying for loans that did not require full disclosure of
income and/or assets

3. The lender’s role in 2007
Mortgage Bankers were faced with 2 options:
• Be conservative (and lose business to other lenders
willing to do riskier loans) OR
• Be competitive and profitable
Predatory lending and non-disclosure of terms ran
rampant and virtually unchecked

4. How often have you heard a client
say…
“No one told me…”
• The payment could go up
• The balance would increase
• The rate was adjustable
• There was a pre-payment penalty

5. The need for change
Under the Dodd-Frank Act, the Consumer Financial
Protection Bureau (CFPB) was directed to make
disclosures:
• Easier to read
• Easier to understand

6. Why the change?
The current disclosure forms were developed under
2 different federal agencies:
• The Truth in Lending Act (TILA)
• The Real Estate Settlement Procedures Ave (RESPA)
So what’s wrong with them?
• The information overlaps and the language is
inconsistent
• Consumers find them confusing
• Lenders and settlement agents find them burdensome to
provide and explain

7. A new dawn…
The new TRID forms will go into effect for all
applications taken August 1, 2015
• Borrower is not required to pay any fees until an intent
to proceed is indicated
• Any written estimates must have a “terms and costs may
change” disclaimer
• Prohibits submission of borrower’s documentation as a
condition of receiving the new Loan Estimate (LE)

8. Who does this apply to?
The majority of closed-end residential mortgages
must use the new disclosure forms
Who can still use the current disclosures?
• Home equity lines of credit (HELOCs)
• Reverse mortgages
• Mortgages secured by a mobile home or land

9. “Your Home Loan Toolkit,
A Step-by-Step Guide”
Will replace the “Shopping For Your Home Loan”
booklet
• Lenders are required to provide this to the borrower
• More comprehensive and detailed
• Covers all aspects of the home-buying and mortgage
process

10. The Loan Estimate (LE)
Designed to assist consumers in understanding:
• Key terms of the loan
• Costs
• Potential risks of the mortgage they are applying for

11. The Loan Estimate (LE)
The Lender must provide the LE to the consumer no later than
3 business days of the receipt of an application
An application is considered received when the consumer has
provided the following:
• Name
• Income
• Social Security number to obtain a credit report
• Address of the property
• Estimated value of the property
• Loan amount requested

12. The Loan Estimate (LE)
Lenders may only revise or correct the LE when there
is a changed circumstance
The LE must be re-disclosed within 3 business days of
the change, but no later than 7 business days before
consummation (closing)

13. The Loan
Estimate (LE)
Features of the LE
• Contains all terms of
the note
• Calculates current
payments (and any
future adjustments)
• Defines the escrow
account
• Estimates closing costs
AND estimated amount
needed at closing

14. The Loan Estimate (LE)
The current GFE does not show:
• How much the borrower will need at closing
Only reflects the total cost of all finance charges, even if they are
financed into the loan (i.e. VA funding fee or FHA UFMIP)
• Funds needed for a down payment

15. The Loan Estimate (LE)
The creditor is bound by the LE (absent a changed
circumstance), and the fees can only change within certain
“tolerances” or “variances”
Zero Tolerance - fees that cannot change
• Charges by a creditor, broker, or their affiliates
• Charges for non-affiliate services for which the
borrower may not shop
• Transfer taxes
10 % Tolerance – allows up to a 10% variance from the
original quote
• 3rd party charges (by non-affiliates) for which the
borrower may shop
No Tolerance – fees can change without limits
• Per diem interest
• Hazard insurance & taxes (i.e. escrow)
• 3rd party charges not on the creditor’s list

16. The Loan Estimate (LE)
The new LE clearly shows the borrower:
• The payment and/or rate is adjustable AND
• The worse case scenario of what could happen to the
monthly payment, and when this may occur

17. The Closing
Disclosure (CD)
Features of the CD
• Page 1 – mirrors page 1 of the LE

18. The Closing
Disclosure (CD)
Features of the CD
• Page 2 – itemization of costs

19. The Closing
Disclosure (CD)
Features of the CD
• Page 3 – calculation of costs and
summary of the transaction

20. The Closing
Disclosure (CD)
Features of the CD
• Page 4 – defines the terms of the
loan disclosures, escrow account,
and any adjustable payments or
interest rates

21. The Closing
Disclosure (CD)
Features of the CD
• Page 5 – calculation of payments
and finance charges, APR, additional
disclosures, and contact information

22. The Closing Disclosure (CD) – Buyer’s Side
Designed to assist consumers in understanding all costs
incurred
• Must be given 3 days before closing
• Must provide a detailed summary of the transaction
• Provided by the lender or settlement agent, however the
lender is ultimately responsible
• If it becomes inaccurate after it has been provided, a
corrected CD must be provided at or before closing
• The borrower has a right to view any changes, at least 1
business day before closing

23. The Closing Disclosure (CD) – Buyer’s Side
The buyer must be re-disclosed a new CD AND wait
an additional 3 days to close if:
• The loan product changes
• The APR changes over the tolerance level
Fixed rate loans - 0.125%
ARMs loans – 0.25%
• A pre-payment penalty is added

24. The Closing Disclosure (CD) – Seller’s Side
The settlement agent is responsible for providing the
CD to sellers
• Must reflect actual terms of the seller’s transaction
With or without buyer side information
• A separate disclosure that only reflects the seller’s side
may be provided
This must be provided to the lender
• Must be provided no later than the day of closing

25. Are you prepared?
What should you do?
• Communicate with your clients
These forms are designed to provide clarity
• Prepare them for the waiting period and advise them to
submit all documentation as soon as possible
• Know who your client’s lender is and the terms of their
loan
• Communicate with both the lender and the settlement
agent

26. Atlantic Bay Mortgage is ready!
Timely closings will ALWAYS be our priority
• ABMG closes 99.7% of our purchase transactions by the
contract date
This includes short sales and bank-owned properties that require
a HUD-1 several days in advance
• No matter what changes may occur, ABMG will always
be ready to assist you and your clients

27. Want to learn more?
Contact an Atlantic Bay
mortgage banker today!