Topic: Truth in Lending Act (TILA)
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If we have more than 14 settlement services that an applicant is allowed to shop for, are we required to include an addendum to the Loan Estimate (LE) disclosing the remaining settlement services? Or should we just label line 14 “Additional Charges”? Either way, should all of the settlement services still be disclosed on the Service Provider List?
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We believe that if you have more than 14 items in the “Services You Can Shop For” section of the LE (Section C), you should either include an addendum with the remaining items or disclose the remaining charges in line 14 as an aggregate amount labeled as “Additional Charges.” Regulation Z requires creditors to itemize…
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On the service provider list included with a Loan Estimate (LE), does each charge for title services need to be itemized (“lender policy,” “settlement fee,” “closing protection letter fee,” etc.), or can we simply list “Title Services”?
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We believe that each settlement service the consumer can shop for should be itemized on your service provider list. If a consumer is permitted to shop for a settlement service, Regulation Z requires you to provide a written list “identifying available providers of that settlement service” (with a disclosure stating that the consumer may choose…
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We extend loans in Missouri and Illinois, and we charge a document preparation fee. We believe that Missouri law requires us to refer to this fee as an “origination fee.” For consistency, can we call this fee an “origination fee” in Illinois?
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Any fees you charge must be disclosed clearly and conspicuously and agreed to by your customers. We believe that switching to an “origination fee” label has some potential to confuse customers, unless your disclosures otherwise make it clear that the fee is being charged for the service of preparing loan documents. As explained below, we…
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Can we disclose title fees under Section C (“Services You Can Shop For”) of the Loan Estimate (LE) if we do not disclose a corresponding service provider on our service provider list? Also, can we disclose title fees on the service provider list that are not disclosed on the LE? We only disclose one title company on our service provider list, and we do not include the amounts of the title fees.
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No, we do not believe you may disclose settlement services (and their related fees) under Section C of the LE if you do not disclose at least one corresponding service provider on your written list of settlement service providers. Also, you are not required to disclose estimated fees on your service provider list, and you…
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How can we properly disclose at the origination of a home equity line of credit (HELOC) what the release fee will be when the loan is terminated? We are aware that such fees are allowable in Illinois, but we can’t say with certainty what the amount will be, and the fees vary by county.
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We do not believe you are required to disclose the exact amount of the release fee at the HELOC’s origination. Rather, you can disclose the existence of the release fee and explain how it will be determined. For home-equity plans, Regulation Z states that creditors must disclose at account opening “the circumstances under which a…
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How can we properly disclose at the origination of a home equity line of credit (HELOC) what the release fee will be when the loan is terminated? We are aware that such fees are allowable in Illinois, but we can’t say with certainty what the amount will be, and the fees vary by county.
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We do not believe you are required to disclose the exact amount of the release fee at the HELOC’s origination. Rather, you can disclose the existence of the release fee and explain how it will be determined. For home-equity plans, Regulation Z states that creditors must disclose at account opening “the circumstances under which a…
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We are a national bank that is going to begin offering escrow accounts to mortgage loan customers. We are aware we will need to provide several documents in conjunction with these accounts, including an initial escrow account statement, annual escrow account statement, escrow closing notice, Illinois Mortgage Escrow Account Act notice, Illinois notice of right to terminate escrow, Illinois notice of tax payments, Illinois escrow account disclosure agreement, and Illinois escrow account election form. Are there any other federal or state documents we may be overlooking, and can you direct us to any model forms (other than the escrow closing notice, which we have)?
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While we cannot provide an exhaustive list of every document you might need in relation to offering your customers escrow accounts, as your needs may vary depending on the circumstances of each loan, we believe the federal documents you listed generally would meet federal requirements related to providing escrow accounts, with the caveats noted below.…
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Are we required to send the borrower a revised Closing Disclosure (CD) post-consummation if only the seller’s fees are being updated? After closings, we often receive a title company’s settlement statement reflecting changes to the seller’s fees such as additional title charges or attorney’s fees.
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No, you are not required to send the borrower a revised CD if an event occurs after consummation resulting in a changed amount only paid by the seller. Under Regulation Z, if an event in connection with the settlement of a transaction occurs during the thirty-day period following consummation that causes the CD “to become…
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Is there a model Illinois Mortgage Escrow Account Act notice (advising borrowers that they may terminate their escrow account when certain conditions are met) that also references Regulation Z’s additional requirements for canceling escrow accounts associated with higher-priced mortgage loans (HPMLs)? Can we modify our current notice to reference Regulation Z’s HPML escrow cancellation requirements?
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No, we are not aware of a model Illinois Mortgage Escrow Account Act notice that references Regulation Z’s additional requirements for canceling escrow accounts associated with HPMLs, but we submitted a request for such a notice to our Compliance Division Advisory Committee and will provide any responses we receive. Additionally, we believe you may modify…
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If a mortgage loan applicant is scheduled to come into the bank to receive and sign their Loan Estimate (LE) on the third business day after we received their application — but is unable to do so because the bank is closed due to inclement weather — can the LE be signed on the following business day, or is the date of the closure for inclement weather considered a “business day” for purposes of the LE deadline? Should we mail the LE as a precaution instead of planning to hand deliver the LE?
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No, we do not believe a day on which your bank closes due to inclement weather would be considered a “business day” for purposes of delivering the LE — provided your bank ceases to carry out substantially all of its business functions on that day. Whether to mail or hand deliver the LE to a…