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TRID TOPICS I
April 20, 2015
TRID TOPICS
Effective Date, Fees and Intent to Proceed, IFW’s & Verification Documents
EFFECTIVE DATE OF THE RULE:
The new Integrated Disclosures must be provided by a creditor or mortgage broker that receives an
application from a consumer on or after August 1, 2015.
However, the new Rule includes new restrictions on certain activity prior to a consumer’s receipt of the
Loan Estimate (LE). These restrictions take effect on August 1, 2015, regardless of when the application
is received. These elements are:
1. The prohibition against imposing fees on a consumer before the consumer has received a Loan
Estimate and indicated an intent to proceed with the transaction.
2. The specific requirements for situations when a consumer is provided a written estimate of
terms or costs (IFW) specific to the consumer before they receive a Loan Estimate.
3. The prohibition against requiring the submission of documents verifying information related to
the consumer’s application before providing the Loan Estimate.
4. The provisions regarding preemption of state laws.
When a creditor receives an application on or after August 1, 2015 and a Loan Estimate is provided, then
the Closing Disclosure must be used as the disclosure document at closing. The Loan Estimate and
Closing Disclosure are designed and required to be used together. When a creditor receives an
application before August 1, 2015, a HUD-1 or HUD-1A Settlement Statement must be used in
connection with the transaction, even if the closing occurs on or after August, 1, 2015.
Creditors may not implement the Loan Estimate and Closing Disclosure before the August 1, 2015
effective date.
INTENT TO PROCEED & FEES:
A creditor or other person may not impose any fee on a consumer in connection with the consumer’s
application for a mortgage transaction until the consumer has received the Loan Estimate and has
indicated intent to proceed with the transaction.
The restriction includes limits on imposing:
 Application fees;
 Appraisal fees;
 Underwriting fees; and
 Other fees imposed on the consumer.
First Community Mortgage, 275 Robert Rose Drive, Murfreesboro, TN 37129, NMLS # 629700
DISCLAIMER:
This is not legal advice. Consult legal counsel or regulator at all times. Multiple sources were used including the CFPB
This is not a consumer advertisement. It is for industry professionals only and not for delivery to consumers for a commercial communication purpose.
However, a creditor or other person may impose a bona fide and reasonable fee for obtaining the
consumer’s credit report before the consumer has received a Loan Estimate.
Like the Good Faith Estimate requirements, there also is the concept of a consumer indicating an intent
to proceed with a Loan Estimate. A consumer indicates intent to proceed with the transaction when
they communicate, in any manner acceptable to the creditor that the consumer chooses to proceed
after the Loan Estimate has been delivered. The creditor must document this communication to satisfy
record retention requirements for Regulation Z.
This may include:


Oral communication in person immediately upon delivery of the Loan Estimate;
Oral communication over the phone, written communication via email, or signing a pre-printed
form after receipt of the Loan Estimate.
FCM Policy requires the Intent to proceed to be in writing. This can be a written acknowledgement from
the borrower or a signed and certified statement from the loan originator documenting an oral
communication from the borrower.
Silence cannot be used as intent to proceed. Although the Rule does not mandate a specific method for
a consumer to indicate an intent to proceed, a consumer’s silence may not be used as an indication of
an intent to proceed.
A creditor may revise the Loan Estimate if the consumer does not indicate an intent to proceed within
10 business days of the delivery of the Loan Estimate.
A fee is imposed by a person if the person requires a consumer to provide a method for payment, even
if the payment is not made at that time. The Commentary provides that, a consumer may not pay or
incur any other fees before the consumer has received a Loan Estimate and indicated an intent to
proceed with the transaction described in the Loan Estimate.
For example: A creditor or mortgage broker requiring the consumer to provide a credit card
number for a processing fee before the consumer receives the Loan Estimate, even it the credit
card will not be charged until after the Loan Estimate is received and the consumer has
indicated an intent to proceed.
ITEMIZED FEE WORKSHEETS:
The TILA-RESPA rule does not prohibit a creditor or other person from providing a consumer with
estimated terms or costs prior to the consumer receiving the Loan Estimate. However, if terms or costs
that are specific to a consumer will be provided in writing, the Rule requires that the written cost
estimate include a disclaimer that it is not a Loan Estimate, and the Rule imposes format and
appearance restrictions.
The required disclaimer must clearly and conspicuously state at the top of the front of the first page of
the written estimate “Your actual rate, payment, and costs could be higher. Get an official Loan
Estimate before choosing the loan.” This disclaimer must be printed no smaller than 12-point font and
First Community Mortgage, 275 Robert Rose Drive, Murfreesboro, TN 37129, NMLS # 629700
DISCLAIMER:
This is not legal advice. Consult legal counsel or regulator at all times. Multiple sources were used including the CFPB
This is not a consumer advertisement. It is for industry professionals only and not for delivery to consumers for a commercial communication purpose.
may not have headings, content, and format substantially similar to the Loan Estimate or the Closing
Disclosure.
For example, if a creditor provides a consumer with a written document showing the estimated
monthly payment for a mortgage loan, and the estimate is based on the estimated loan amount
and the consumer’s estimated credit score, the requirement to include the disclaimer would
apply.
In the October 1, 2014 webinar the CFPB staff informally advised that no document other than a Loan
Estimate may include the title “Loan Estimate”.
The requirements do not apply to written costs estimates that are not specific to the consumer. For
example, the requirements do not apply to (1) a preprinted list of closing costs common in the
consumer’s area, (2) a preprinted list of available rates for different loan products or (3) advertisements.
Effective August 1, 2015, all Itemized Fee Worksheets provided to consumer must be generated within
the loan origination software. No other worksheets will be permitted.
VERIFICATION DOCUMENTS:
A creditor or other person may not require an applicant to submit documents verifying the information
they have provided on the loan application prior to providing the Loan Estimate (LE). This includes the
sales contract, paystubs, W-2’s, bank statements, 401K statements or any other verification
documentation. The Commentary includes the following illustrations of this restriction:
1. A creditor may ask for the sale price and address of the property, but the creditor may not
require the consumer to provide a purchase and sale agreement to support the information the
consumer provides orally before the creditor provides the Loan Estimate. In many cases, this
will be a significant change from current processes. Today most companies require a fully
executed contract prior to entering the property address in the LOS and issuing loan
disclosures.
2. A mortgage broker may ask for the names, account numbers, and balances of the consumer’s
checking and savings accounts, but the mortgage broker may not require the consumer to
provide bank statements, or similar documentation, to support the information the consumer
provides orally before the mortgage broker provides the Loan Estimate.
The CFPB also notes in the supplementary information to the Rule that if a consumer offers verification
documentation before receiving a Loan Estimate, a creditor may accept the documentation, provided
the creditor does not require the consumer to provide. Therefore, if a consumer volunteers to provide
the documentation, the creditor may accept it; so long as it was not required prior to providing the Loan
Estimate.
ADDITIONAL RESOURCES:
Additional compliance resources can be found at the CFPB website at:
http://www.consumerfinance.gov/regulatory-implementation/tila-respa/
First Community Mortgage, 275 Robert Rose Drive, Murfreesboro, TN 37129, NMLS # 629700
DISCLAIMER:
This is not legal advice. Consult legal counsel or regulator at all times. Multiple sources were used including the CFPB
This is not a consumer advertisement. It is for industry professionals only and not for delivery to consumers for a commercial communication purpose.