TILA/RESPA: More than Just the
Loan Estimate and Closing
Disclosure
Presented by:
CUNA Mutual Group Proprietary
Reproduction, Adaptation or Distribution Prohibited
© 2015 CUNA Mutual Group, All Rights Reserved.
Presenter
Maureen Clark
Regulatory Compliance Manager
LOANLINER® Documents
CUNA Mutual Group
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Agenda
• Review of the Truth In Lending Act (TILA)/Real Estate Settlement
Procedures Act (RESPA) Integrated Disclosure Rule
• Current documents that require updates
• Transition period to new disclosures
• New documents required by the Rule
– Settlement Service Providers List
– Escrow Cancellation Notice
• Action steps and resources
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Integrated Disclosures Review
Combination of RESPA and TILA disclosures
Purpose is to create disclosures that are
easier to understand and use
Scope: Most closed-end consumer credit
transactions secured by real property
Effective August 1, 2015
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Integrated Disclosures Review
Loan
Estimate
Closing
Disclosure
• Initial TILA Disclosure
• RESPA Good Faith Estimate
• Provided 3 business days after
application
• Final TILA Disclosure
• HUD-1 / HUD-1A
• Received 3 business days before
consummation
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Integrated Disclosure Review
Which loans require the new disclosures?
Included
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Closed-end consumer transactions
Secured by real property (land)
First and subordinate liens
Includes – Purchases, refinances, closed-end home
equity, vacation and second homes, loans on 25 acres or
more, vacant lot loans, construction-only loans
Excluded
• Home Equity Lines of Credit (HELOCs)
• Reverse mortgages
• Loans secured by mobile homes or a dwelling not
attached to real property
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Integrated Disclosures Review
Documents Are Very Dynamic at the Loan Level
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Disclosures based on loan type & purpose
Different requirements for loans with or without a seller
If disclosure is not required, it cannot show
Cannot use “n/a” or leave something blank
New Disclosures and Calculations
• New documents
• New data fields
• New required calculations
Testing and Training
Want more information about the dynamic nature of the new
disclosures? Check out www.cunamutual.com/tilarespa for
previous webinars.
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Documents Being Replaced
Document Name
Number
Replacement
Truth in Lending Disclosure
Fixed Rate*
MXX12
Loan Estimate/Closing
Disclosure
Truth in Lending Disclosure
Adjustable*
MXX1B
Loan Estimate/Closing
Disclosure
Good Faith Estimate
EST77
Loan Estimate
HUD-1/1A Settlement
Statement
RM001/EST22
Closing Disclosure
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Documents Being Replaced
Document Name
Number
Replacement
Servicing Disclosure
RM002
Loan Estimate
Appraisal Disclosure*
RM004
Loan Estimate
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New Closed-End Home Equity Note
Document Name
Number
Closed End Home Equity Note and
EST55 and State
Disclosure (Multi State and State Specific) Specific Versions
Replacement
Closing Disclosure
and Standalone Note
Updated version will be sent to current customers automatically.
You must call to cancel, if applicable.
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Available or Archived?
Documents Available
• After August 1, 2015, the following documents will continue to be available:
– TILA Disclosure Fixed Rate and Adjustable Rate
• Still required for consumer loan secured by a dwelling
– Appraisal Disclosure
• Still required for a first lien secured by a dwelling which could include HELOCs
Documents Being Archived
• The following documents will be archived and removed from customer
accounts at the end of 2015:
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–
–
–
Good Faith Estimate (EST77)
Servicing Disclosure (RM002)
HUD-1/1A Settlement Statement (RM001/EST22)
Closed End Home Equity Note and Disclosure (EST55 and State Specific Versions)
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Transition Period
If a loan application is received on or before July 31, 2015 use:
At Application
At Closing
Initial TILA Disclosure
• Fixed (MXX12) or
• Adjustable (MXX1B)
Final TILA Disclosure
• For Closed-end Home Equity, use EST55
or state specific
• For First Mortgage, use a stand alone
TILA disclosure
Good Faith Estimate (EST77)
HUD-1/1A (RM001/EST22)
Servicing (RM002) and
Appraisal Disclosures (RM004)
If a loan application is received on or after August 1, 2015 use:
At Application
At Closing
Loan Estimate
Closing Disclosure
This is not a complete list of documents required for a real estate transaction. This list only
addresses disclosures affected and created due to the Integrated Mortgage Disclosure Rule.
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Transition Period
Successful Implementation of the New Disclosures
– Training
• Appropriate disclosures to use both pre and post-effective date
• Change in scope for new disclosures
– Tracking
• Ensure that the correct disclosures are provided throughout the
loan process
• End date for using current disclosures
– Timing
• Timing requirements for Loan Estimate and Closing Disclosure
• Credit Union is ultimately responsible for timely provision
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New Timing Requirements
• Loan Estimate Timing
– Delivered or placed in the mail, 3rd business day after application
• “Application” definition updated.
– Additionally, must be delivered or placed in the mail no later than the 7th
business day before consummation.
• Closing Disclosure Timing
– Received at least three business days before consummation.
• Once the Closing Disclosure has been provided, revised Loan Estimate cannot be
given.
• The Settlement Agent may be the party providing the Closing Disclosure at this
time, but the Credit Union is still responsible for the accuracy and confirming the
delivery of the disclosure.
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New Documents
Settlement Service
Providers List
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New Documents
Settlement Service Providers List
Scope
Closed-end consumer credit transactions secured by real property where
the creditor allows a consumer to shop for a settlement service
Timing
Must be provided no later than the 3rd business day after receipt of the
consumer’s application.
Content
The list must identify at least one provider for each service for which the
consumer is permitted to shop.
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New Documents
Escrow Cancellation
Notice
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New Documents
Escrow Cancellation Notice
Scope
Closed-end consumer credit transactions secured by a first lien on real property,
other than a reverse mortgage, for which an escrow account was established in
connection with the transaction and will be cancelled.
Timing
• If the consumer requests cancellation, the disclosure must be received no later
than three business days before the closure of the escrow account.
• If the creditor or servicer cancels the account, the consumer must receive the
disclosure no later than 30 business days before closure of the escrow account.
Content
The disclosure has very specific information and requirements.
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Action Items - Documents
Loan Estimate and Closing Disclosure
– Complete Questionnaire
– Approve Quote
New Documents
Settlement Service Providers List and
Escrow Cancellation Notice
– Determine necessity and order
– Develop process for use and train staff
Current TILA and RESPA Disclosures
– Assess loan programs
– Cancel unnecessary documents
Transition Planning
– Process development and training for staff
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Action Items – Business Decisions and Contacts
• Decisions to Make
– What loan programs to do?
– What services will you allow a
member to shop for?
– Update policies and
procedures
• Who to contact?
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System provider
Forms provider
Settlement Agent
Other outside business partners
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Action Items - Internal
• Review current procedures
• Implementation
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Who is in charge?
What needs to change?
How will the change occur?
What other partners do you need to be successful?
• Update policies and procedures
• Test new documents and system changes
• Training for staff
– New disclosures and documents
– Transition period
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Resources
LOANLINER Resources
– Webinar Recordings
– The Game-Changing Impacts and Action Steps – August 19, 2014
– It’s A Whole New World – October 15, 2014
– Lending Resource Center - Current LOANLINER Customers
– www.loanliner.com/realestate
– Continue checking for upcoming webinars
– Contact LOANLINER Compliance Support
– Email loanliner@cunamutual.com
– Call 800.356.5012, Option 4
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Resources
Consumer Financial Protection Bureau (CFPB)
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CFPB's TILA-RESPA Integrated Disclosure Rule
CFPB's TILA-RESPA Integrated Disclosure Rule Compliance Guide
CFPB's TILA-RESPA Integrated Disclosure Rule Guide to Forms
CFPB's TILA-RESPA Integrate Disclosure Rule Disclosure Timeline
CFPB's TILA-RESPA Integrated Disclosure Rule Loan Disclosure
Forms & Samples
• CFPB’s Readiness Guide
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