Regulation Z - Overview

The new TIL rules will apply to loans on all real property or dwellings

Loan Originator Payment Changes

Loan originator:  anyone who gets paid by arranging a loan other than creditor who uses warehouse line. A broker is a loan originator who is not a w2 employee of the creditor.

Loan originator payment

• No one can pay, and no one can receive any compensation related to the terms of the loan:
  • Option 1: includes loan amount
  • Option 2: does not include loan amount

• If originator compensation is paid by borrower, compensation can be related to the terms of the loan, however, there can be no additional compensation paid by any other party (no YSP or SRP).

Disclosure Additions and Changes

Disclosures at application

• New 1 Page “Key Questions about Your Mortgage”
• New 1 Page “Fixed versus Adjustable” (replaces CHARM book.)
• Revised ARM Disclosure (tabular form.)

Disclosures within 3 days

• TILA – more fees in APR (more loans HOEPA will be created),
• APR relative credit graph (visual graphing of your APR and the APRs those with better or worse credit are receiving.  
• total settlement charges (like GFE),
• disclosure of potential loan changes.

Disclosures before 3 days before close

• Final TILA – 2 alternatives for changes to final TILA

Disclosures after close

• Pre-disclosure of changes from 25 to 60 days, neg-am disclosure, 45 day notice before imposed hazard insurance.

Miscellaneous Changes

Refinance – the new finance charge shall include any unused portion of the old finance charge not credited back. 226.20.

No appraiser coercion language