CFPB Loan Transaction Disclosure - Training Aid

CFPB Loan Transaction Disclosure - Training Aid

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  FEBRUARY 7, 2014 H-25(B)Mortgage Loan Transaction Closing Disclosure – Fixed Rate Loan Sample TILA RESPA Integrated Disclosure This is a sample of a completed Closing Disclosure for the fixed rate loan illustrated by form H-24(B). The purpose, product, sale price, loan amount, loan term, and interest rate have not changed from the estimates provided on the Loan Estimate. The creditor requires an escrow account and that the consumer pay for private mortgage insurance for the transaction.
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  Projected Payments Loan TermsCan this amount increase after closing? Loan Amount $162,000 NO Interest Rate 3.875% NO Monthly Principal & Interest See Projected Payments below for your Estimated Total Monthly Payment $761.78 NO Does the loan have these features? Prepayment Penalty YES • As high as $3,240 if you pay off the loan during the first 2 years Balloon Payment NO Costs at Closing CLOSING DISCLOSURE PAGE 1 OF 5 • LOAN ID # 123456789 Payment Calculation Years 1-7 Years 8-30 Principal Interest Mortgage Insurance Estimated Escrow Amount can increase over time $761.78 + 82.35 + 206.13 $761.78 + — + 206.13 Estimated Total Monthly Payment $1,050.26 $967.91 Estimated Taxes, Insurance Assessments Amount can increase over time See page 4 for details $356.13 a month See Escrow Account on page 4 for details. You must pay for other property costs separately. This estimate includes In escrow? x Property Taxes YES x Homeowner’s Insurance YES x Other: Homeowner’s Association Dues NO Closing Costs $9,712.10 Includes $4,694.05 in Loan Costs + $5,018.05 in Other Costs – $0 in Lender Credits. See page 2 for details. Cash to Close $14,147.26 Includes Closing Costs. See Calculating Cash to Close on page 3 for details. Transaction Information Borrower Michael Jones and Mary Stone 123 Anywhere Street Anytown, ST 12345 Seller Steve Cole and Amy Doe 321 Somewhere Drive Anytown, ST 12345 Lender Ficus Bank Loan Information Loan Term 30 years Purpose Purchase Product Fixed Rate Loan Type x Conventional FHA VA _____________ Loan ID # 123456789 MIC # 000654321 Closing Information Date Issued 4/15/2013 Closing Date 4/15/2013 Disbursement Date 4/15/2013 Settlement Agent Epsilon Title Co. File # 12-3456 Property 456 Somewhere Ave Anytown, ST 12345 Sale Price $180,000 This form is a statement of final loan terms and closing costs. Compare this document with your Loan Estimate.Closing Disclosure
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  Borrower-Paid Seller-Paid Paidby Others At Closing Before Closing At Closing Before Closing A. Origination Charges $1,802.00 01 0.25 % of Loan Amount (Points) $405.00 02 Application Fee $300.00 03 Underwriting Fee $1,097.00 04 05 06 07 08 B. Services Borrower Did Not Shop For $236.55 01 Appraisal Fee to John Smith Appraisers Inc. $405.00 02 Credit Report Fee to Information Inc. $29.80 03 Flood Determination Fee to Info Co. $20.00 04 Flood Monitoring Fee to Info Co. $31.75 05 Tax Monitoring Fee to Info Co. $75.00 06 Tax Status Research Fee to Info Co. $80.00 07 08 09 10 C. Services Borrower Did Shop For $2,655.50 01 Pest Inspection Fee to Pests Co. $120.50 02 Survey Fee to Surveys Co. $85.00 03 Title – Insurance Binder to Epsilon Title Co. $650.00 04 Title – Lender’s Title Insurance to Epsilon Title Co. $500.00 05 Title – Settlement Agent Fee to Epsilon Title Co. $500.00 06 Title – Title Search to Epsilon Title Co. $800.00 07 08 D. TOTAL LOAN COSTS (Borrower-Paid) $4,694.05 Loan Costs Subtotals (A + B + C) $4,664.25 $29.80 Loan Costs CLOSING DISCLOSURE PAGE 2 OF 5 • LOAN ID # 123456789 J. TOTAL CLOSING COSTS (Borrower-Paid) $9,712.10 Closing Costs Subtotals (D + I) $9,682.30 $29.80 $12,800.00 $750.00 $405.00 Lender Credits Closing Cost Details Other Costs E. Taxes and Other Government Fees $85.00 01 Recording Fees Deed: $40.00 Mortgage: $45.00 $85.00 02 Transfer Tax to Any State $950.00 F. Prepaids $2,120.80 01 Homeowner’s Insurance Premium ( 12 mo.) to Insurance Co. $1,209.96 02 Mortgage Insurance Premium ( mo.) 03 Prepaid Interest ( $17.44 per day from 4/15/13 to 5/1/13 ) $279.04 04 Property Taxes ( 6 mo.) to Any County USA $631.80 05 G. Initial Escrow Payment at Closing $412.25 01 Homeowner’s Insurance $100.83 per month for 2 mo. $201.66 02 Mortgage Insurance per month for mo. 03 Property Taxes $105.30 per month for 2 mo. $210.60 04 05 06 07 08 Aggregate Adjustment – 0.01 H. Other $2,400.00 01 HOA Capital Contribution to HOA Acre Inc. $500.00 02 HOA Processing Fee to HOA Acre Inc. $150.00 03 Home Inspection Fee to Engineers Inc. $750.00 $750.00 04 Home Warranty Fee to XYZ Warranty Inc. $450.00 05 Real Estate Commission to Alpha Real Estate Broker $5,700.00 06 Real Estate Commission to Omega Real Estate Broker $5,700.00 07 Title – Owner’s Title Insurance (optional) to Epsilon Title Co. $1,000.00 08 I. TOTAL OTHER COSTS (Borrower-Paid) $5,018.05 Other Costs Subtotals (E + F + G + H) $5,018.05
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  Calculating Cash toClose BORROWER’S TRANSACTION K. Due from Borrower at Closing $189,762.30 01 Sale Price of Property $180,000.00 02 Sale Price of Any Personal Property Included in Sale 03 Closing Costs Paid at Closing (J) $9,682.30 04 Adjustments 05 06 07 Adjustments for Items Paid by Seller in Advance 08 City/Town Taxes to 09 County Taxes to 10 Assessments to 11 HOA Dues 4/15/13 to 4/30/13 $80.00 12 13 14 15 L. Paid Already by or on Behalf of Borrower at Closing $175,615.04 01 Deposit $10,000.00 02 Loan Amount $162,000.00 03 Existing Loan(s) Assumed or Taken Subject to 04 05 Seller Credit $2,500.00 Other Credits 06 Rebate from Epsilon Title Co. $750.00 07 Adjustments 08 09 10 11 Adjustments for Items Unpaid by Seller 12 City/Town Taxes 1/1/13 to 4/14/13 $365.04 13 County Taxes to 14 Assessments to 15 16 17 CALCULATION Total Due from Borrower at Closing (K) $189,762.30 Total Paid Already by or on Behalf of Borrower at Closing (L) – $175,615.04 Cash to Close x From To Borrower $14,147.26 SELLER’S TRANSACTION M. Due to Seller at Closing $180,080.00 01 Sale Price of Property $180,000.00 02 Sale Price of Any Personal Property Included in Sale 03 04 05 06 07 08 Adjustments for Items Paid by Seller in Advance 09 City/Town Taxes to 10 County Taxes to 11 Assessments to 12 HOA Dues 4/15/13 to 4/30/13 $80.00 13 14 15 16 N. Due from Seller at Closing $115,665.04 01 Excess Deposit 02 Closing Costs Paid at Closing (J) $12,800.00 03 Existing Loan(s) Assumed or Taken Subject to 04 Payoff of First Mortgage Loan $100,000.00 05 Payoff of Second Mortgage Loan 06 07 08 Seller Credit $2,500.00 09 10 11 12 13 Adjustments for Items Unpaid by Seller 14 City/Town Taxes 1/1/13 to 4/14/13 $365.04 15 County Taxes to 16 Assessments to 17 18 19 CALCULATION Total Due to Seller at Closing (M) $180,080.00 Total Due from Seller at Closing (N) – $115,665.04 Cash From x To Seller $64,414.96 Summaries of Transactions CLOSING DISCLOSURE PAGE 3 OF 5 • LOAN ID # 123456789 Loan Estimate Final Did this change? Total Closing Costs (J) $8,054.00 $9,712.10 YES • See Total Loan Costs (D) and Total Other Costs (I) Closing Costs Paid Before Closing $0 – $29.80 YES • You paid these Closing Costs before closing Closing Costs Financed (Paid from your Loan Amount) $0 $0 NO Down Payment/Funds from Borrower $18,000.00 $18,000.00 NO Deposit – $10,000.00 – $10,000.00 NO Funds for Borrower $0 $0 NO Seller Credits $0 – $2,500.00 YES • See Seller Credits in Section L Adjustments and Other Credits $0 – $1,035.04 YES • See details in Sections K and L Cash to Close $16,054.00 $14,147.26 Use this table to see a summary of your transaction. Use this table to see what has changed from your Loan Estimate.
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  Assumption If you sellor transfer this property to another person, your lender will allow, under certain conditions, this person to assume this loan on the original terms. will not allow assumption of this loan on the original terms. Demand Feature Your loan has a demand feature, which permits your lender to require early repayment of the loan. You should review your note for details. does not have a demand feature. Late Payment If your payment is more than 15 days late, your lender will charge a late fee of 5% of the monthly principal and interest payment. Negative Amortization (Increase in Loan Amount) Under your loan terms, you are scheduled to make monthly payments that do not pay all of the interest due that month. As a result, your loan amount will increase (negatively amortize), and your loan amount will likely become larger than your original loan amount. Increases in your loan amount lower the equity you have in this property. may have monthly payments that do not pay all of the interest due that month. If you do, your loan amount will increase (negatively amortize), and, as a result, your loan amount may become larger than your original loan amount. Increases in your loan amount lower the equity you have in this property. do not have a negative amortization feature. Partial Payments Your lender may accept payments that are less than the full amount due (partial payments) and apply them to your loan. may hold them in a separate account until you pay the rest of the payment, and then apply the full payment to your loan. does not accept any partial payments. If this loan is sold, your new lender may have a different policy. Security Interest You are granting a security interest in 456 Somewhere Ave., Anytown, ST 12345 You may lose this property if you do not make your payments or satisfy other obligations for this loan. CLOSING DISCLOSURE PAGE 4 OF 5 • LOAN ID # 1234567890 Loan Disclosures Escrow Account For now, your loan will have an escrow account (also called an“impound”or“trust” account) to pay the property costs listed below. Without an escrow account, you would pay them directly, possibly in one or two large payments a year. Your lender may be liable for penalties and interest for failing to make a payment. Escrow Escrowed Property Costs over Year 1 $2,473.56 Estimated total amount over year 1 for your escrowed property costs: Homeowner’s Insurance Property Taxes Non-Escrowed Property Costs over Year 1 $1,800.00 Estimated total amount over year 1 for your non-escrowed property costs: Homeowner’s Association Dues You may have other property costs. Initial Escrow Payment $412.25 A cushion for the escrow account you pay at closing. See Section G on page 2. Monthly Escrow Payment $206.13 The amount included in your total monthly payment. No Escrow Estimated Property Costs over Year 1 Estimated total amount over year 1.You must pay these costs directly, possibly in one or two large payments a year. Escrow Waiver Fee will not have an escrow account because you declined it your lender does not offer one. You must directly pay your property costs, such as taxes and homeowner’s insurance. Contact your lender to ask if your loan can have an escrow account. In the future, Your property costs may change and, as a result, your escrow pay- ment may change. You may be able to cancel your escrow account, but if you do, you must pay your property costs directly. If you fail to pay your property taxes, your state or local government may (1) impose fines and penalties or (2) place a tax lien on this property. If you fail to pay any of your property costs, your lender may (1) add the amounts to your loan balance, (2) add an escrow account to your loan, or (3) require you to pay for property insurance that the lender buys on your behalf, which likely would cost more and provide fewer benefits than what you could buy on your own. Additional Information About This Loan x x x x x
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  Contact Information Confirm Receipt OtherDisclosures Appraisal If the property was appraised for your loan, your lender is required to give you a copy at no additional cost at least 3 days before closing. If you have not yet received it, please contact your lender at the information listed below. Contract Details See your note and security instrument for information about • what happens if you fail to make your payments, • what is a default on the loan, • situations in which your lender can require early repayment of the loan, and • the rules for making payments before they are due. Liability after Foreclosure If your lender forecloses on this property and the foreclosure does not cover the amount of unpaid balance on this loan, state law may protect you from liability for the unpaid balance. If you refinance or take on any additional debt on this property, you may lose this protection and have to pay any debt remaining even after foreclosure. You may want to consult a lawyer for more information. state law does not protect you from liability for the unpaid balance. Refinance Refinancing this loan will depend on your future financial situation, the property value, and market conditions. You may not be able to refinance this loan. Tax Deductions If you borrow more than this property is worth, the interest on the loan amount above this property’s fair market value is not deductible from your federal income taxes. You should consult a tax advisor for more information. By signing, you are only confirming that you have received this form. You do not have to accept this loan because you have signed or received this form. Applicant Signature Date Co-Applicant Signature Date CLOSING DISCLOSURE PAGE 5 OF 5 • LOAN ID # 123456789 Total of Payments. Total you will have paid after you make all payments of principal, interest, mortgage insurance, and loan costs, as scheduled. $285,803.36 Finance Charge. The dollar amount the loan will cost you. $118,830.27 Amount Financed. The loan amount available after paying your upfront finance charge. $162,000.00 Annual Percentage Rate (APR). Your costs over the loan term expressed as a rate. This is not your interest rate. 4.174% Total Interest Percentage (TIP). The total amount of interest that you will pay over the loan term as a percentage of your loan amount. 69.46% Loan Calculations x Lender Mortgage Broker Real Estate Broker (B) Real Estate Broker (S) Settlement Agent Name Ficus Bank FRIENDLY MORTGAGE BROKER INC. Omega Real Estate Broker Inc. Alpha Real Estate Broker Co. Epsilon Title Co. Address 4321 Random Blvd. Somecity, ST 12340 1234 Terrapin Dr. Somecity, MD 54321 789 Local Lane Sometown, ST 12345 45 987 Suburb Ct. Someplace, ST 12340 123 Commerce Pl. Somecity, ST 12344 NMLS ID 222222 ST License ID Z765416 Z61456 Z61616 Contact Joe Smith JIM TAYLOR Samuel Green Joseph Cain Sarah Arnold Contact NMLS ID 12345 394784 Contact ST License ID P16415 P51461 PT1234 Email joesmith@ ficusbank.com JTAYLOR@ FRNDLYMTGBRKR.CM sam@omegare.biz joe@alphare.biz sarah@ epsilontitle.com Phone 123-456-7890 333-444-5555 123-555-1717 321-555-7171 987-555-4321 Questions? If you have questions about the loan terms or costs on this form, use the contact information below. To get more information or make a complaint, contact the Consumer Financial Protection Bureau at www.consumerfinance.gov/mortgage-closing?