Disclosure Quick Reference - The Compliance …

1 Disclosure Requirement- Quick Reference Guide Disclosure requirements for a loan to an individual secured by 1-4 family residential real property. Only if loan closes RESPA/Regulation X Regulation Z If not turned down within 3 days Always GFE Info Book HUD 1 or 1A STD Early TIL TIL ROR ARM DB Home Eq HMDA Flood Ins. Construction Without permanent N N N N N Y N A N Y With permanent Y Y Y Y Y * N A Y Y Refinance First Mortgage Original lender, no new funds Y N Y Y N Y N A Y Y Other Y N Y Y N Y Y A Y Y Other First Mortgage Closed End Home improvement Y N Y Y N Y Y A Y Y Other consumer purpose Y N Y Y N Y Y A N Y Nonconsumer purpose N N N N N N N N N Y Junior Mortgage Closed End Home improvement Y N

2 Y N N Y Y A Y Y Other consumer purpose Y N Y N N Y Y A N Y Nonconsumer purpose N N N N N N N N N Y First or Junior Mortgage Open End Home improvement N N N N Y * Y Y Y Other consumer purpose N N N N Y * Y N Y Nonconsumer purpose N N N N N N N N N Y Purchase Money Mortgage Y Y Y Y Y * N A Y Y Loan Modification N N N N N N N N N Y KEY Chart Code Description Chart Code Description GFE Good Faith Estimate TIL Truth-in-Lending Disclosure Info Book Special Information Booklet published by HUD ROR Right of Rescission HUD 1 or 1A HUD official settlement statement form ARM DB Adjustable Rate Mortgage Disclosure Booklet STD Loan Servicing Transfer Disclosure HMDA Home Mortgage Disclosure Act Early TIL Early Truth-in-Lending Disclosure Flood Ins.

3 Flood Insurance NOTES 1. Construction without permanent: All the N s under RESPA become Y s and the Early TIL (and, if adjustable rate, the ARM DB) must be given if the construction loan also finances transfer of title of the land to the first user of the residence. 2. An * in the TIL column means that the disclosures do not need to be given if the initial disclosures are still accurate. 3. Effective January 14, 1997, RESPA follows the TIL rules for what constitutes a business purpose loan. The following are business purpose loans and therefore exempt from TIL and RESPA: All loans to acquire, improve or maintain non-owner-occupied residential rental property Purchase money loans to acquire owner-occupied residential rental property of more than 2 units Loans to improve or maintain owner-occupied residential rental property of more than 4 units 4. Refinance versus Loan Modification This distinction is crucial.

4 If the borrower signs a new note, replacing and satisfying the old note, a refinancing has occurred and new disclosures are required. The only exceptions are: A renewal of a single payment obligation with no other change in the original terms (does not include the renewal of an amortizing balloon note) A reduction in a note s APR with a corresponding change in the payment schedule An agreement involving a court proceeding A loan workout if there is no increase in rate or amount financed A renewal of optional insurance if properly disclosed initially On the other hand, if the borrower and the bank put their changes in a modification agreement or similar document, and merely agree that the note (and mortgage if necessary) will not be replaced and satisfied, but only modified as set out in the modification agreement, then it will not be a refinancing. The only exceptions are for a change from fixed rate to variable (which will be deemed a refinancing no matter how it is documented) and an increase in interest rate based on a variable rate feature that was not previously disclosed to the consumer (which probably will be a TIL violation, as well as a refinancing).

5 5. Regulations That Always Apply The following are other laws, rules, and regulations that apply to all residential mortgage loans: The Fair Housing Act, and in particular, its antidiscrimination provisions Regulation B, including both the appraisal availability notification and the adverse action notice requirements The appraisal requirements regarding content and preparation, and based upon the loan amount, the required credentials of the person preparing it The regulatory limits on maximum loan-to-value ratios The Community Reinvestment Act The Comprehensive Environmental Response, Compensation, and Liability Act ( CERCLA ) and its environmental hazard liability. 6. Regulations That Apply Under Certain Circumstances The following are additional laws, rules, and regulations that apply to residential mortgage loans in certain circumstances: Fair Credit Reporting Act - if you obtain credit report on the borrower Regulation O if the borrower is an insider of the bank The RESPA Initial Escrow Account Disclosure if an escrow is being established with the loan Regulation AA if there is a cosigner , as defined in the regulation Annemaria Allen, 760 747 0364