Integrated Disclosures Qs & As

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  • #6710

    Following are answers to a few recent questions we have received:

    Question: Our Bank currently does not allow our customers to shop so with the new ruling we would be subject to a 0 Tolerance for Third Party Fees and the exception is for recording fees because paid to the government entity and are subject to 10% Tolerance. Is this correct?
    Answer: A third-party fee is eligible for the 10% tolerance if:
    (A) The aggregate amount of charges for third-party services and recording fees paid by or imposed on the consumer does not exceed the aggregate amount of such charges disclosed in the Loan Estimate by more than 10 percent;
    (B) The charge for the third-party service is not paid to the creditor or an affiliate of the creditor; and
    (C) The creditor permits the consumer to shop for the third-party service, consistent with paragraph (e)(1)(vi) of this section.

    Generally your analysis appears accurate, but remember certain third party fees, such as property insurance are permitted to increase and are not subject to a tolerance limit.

    Question: If the Bank were to change and permit the consumer to shop for unaffiliated third-party fees, providing the list of Third-party fees the tolerance is 10% if one is chosen from the list. If the consumer picks their own third-party not on the list given to the consumer at disclosure time and the amount comes in more than disclosed, that is a permitted Variation and no limitation to how much the fee is above or below the amt disclosed on the loan estimate is allowed?
    Answer: Again your interpretation is generally correct, but when the customer does shop and chooses a provider not on the list provided by the lender a charge higher than the estimate is acceptable so long as the original estimated charge for a particular service, was based on the best information reasonably available to the creditor at the time the disclosure was provided.

    Question: To clarify the list given to the consumer: If allowed to shop we have to list at least one Third-party for each service and the Third –party servicer has to supply that service in the area where the consumer or property is in order to be compliant?
    Answer: Correct

    Question: Third Party Fees for example are Appraisal, Title Insurance that the lender would require correct? (Our Bank closes almost all of our loans not the title companies)
    Answer: Your examples are accurate.


    I am trying to figure out how we should handle our rate lock dates, I have been reviewing section 1026.37(a)(13), but am still confused. We do a lot of arm loans in which we don’t really have have a rate lock, we honor the rate that was disclosed at the time of application. From what I have read I think we should set our rate lock date to be 90 days out in this instance, and then the all other estimated costs will be 10 days.


    We have a customer who applied for a purchase loan. The appraisal came in as needing repairs. We have already sent out the loan estimate. The customer will be putting the repairs into an escrow account at closing. Do we re-disclose with a “changed circumstance”? Also if we do re-disclose the loan estimate, what section are the repair funds reflected?

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