Untangling the Web Of Fee Disclosures

• High-Cost Mortgages;
• Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosures (TRID);
• Ability to Repay/Qualified Mortgage Rules; and
• Home Mortgage Disclosure Act/Regulation C.

This program explains:

• Which fees are included in or excluded from the:
• Finance charge, per §1026.4 - The finance charge is a critical component in the calculation of the APR. Regulation Z provides a list of fees that are included in the finance charge and a list of fees that may be excluded, if certain conditions are met. Violations often occur when a fee is excluded from the finance charge but all of the conditions for the exclusion have not been met.
• Annual Percentage Rate (APR), per §1026.22 - The APR is based on the finance charge. Violations frequently occur when the finance charge is not properly calculated.
• Total Points and Fees, per §1026.32 - Jack has declared this number as "the most important number in the world of compliance." It is used to determine coverage for Section 32 rules, it is disclosed in a Section 32 disclosure and on the HMDA LAR, and it is used to determine QM status under Section 43. A single miscalculation can result in multiple violations.
• Military Annual Percentage Rate (MAPR), per the Department of Defense’s §232 - Disclosure of the MAPR has been required since October 2007, but as a result of the limited scope of the rule most lenders have not needed to disclose the number. As a result of revisions to Part 232, effective October 3, 2016, the scope of the rule is dramatically expanded and most lenders will need to disclose the number. Although the calculation of the MAPR is similar to the calculation of an APR, differences generally result in a much higher number.
• The TRID Tolerance rules contained in §1026.19; and
• The proper disclosure of fees on the Loan Estimate and Closing Disclosure, per §1026.37 and .38.

WHY?

Violations of any of the requirements listed above may result in:

• Regulatory reimbursement;
• Consumer lawsuits;
• Regulatory cures;
• Higher liability from the failure to meet QM standards; and
• Civil monetary penalties.

Upon completion of the program, participants understand that improper fee disclosure may result in violations. In some cases a violation of one section may result in one or more violations of other sections. It is a tangled web. For example:

• A violation of the finance charge rules contained in §1026.4 may also cause a violation of the disclosure requirements in §1026.18 or §1026.38 since the finance charge is included in those disclosures;
• Improper categorization of fees on the TRID disclosures contained in §1026.37 and .38 may result in a violation of the tolerance rules contained in §1026.19;
• Failure to follow the APR calculation rules contained in §1026.22 may result in:
• The incorrect APR appearing in the disclosures contained in §1026.18, §1026.32, §1026.37 or §1026.38;
• Inadvertently triggering coverage of §1026.32;
• An inaccurate calculation of the rate spread disclosed on the HMDA LAR and used to determine the applicability of the high-cost mortgage loan rules contained in §1026.32 and the higher-priced mortgage loan rules contained in §1026.35; or
• The incorrect disclosure of the HOEPA status disclosed on the HMDA LAR;
• An inaccurate determination of the higher-priced covered transaction status of a loan for purpose of determining which a transaction achieves safe harbor or presumption of compliance status for the ability to repay rules in Section 1026.43;
• Failure to properly calculate the total points and fees as prescribed by the high-cost mortgage loan rules contained in §1026.32 can:
• Inadvertently trigger §1026.32 coverage;
• Violate the disclosure rules contained in §1026.32;
• Result in an incorrect entry on the HMDA LAR; and
• Blow the Qualified Mortgage status for purposes of §1026. 43; or
• Failure to follow TRID rules contained in §1026.38 may result in the incorrect disclosure of the total of all itemized amounts that are designated borrower-paid at or before closing on HMDA LAR.

The live versions are interactive, meaning that participants can ask questions in real time, plus are a very cost-effective form of training because 1) you receive fast, convenient learning without any out-of-office time; 2) you can invite as many colleagues as you'd like to listen in on a single phone line; 3) you incur no travel expenses; and 4) you and your colleagues are back at work immediately after the session ends!

And though with recorded versions you do lose the ability to ask questions, you gain the ability to hear the presentation numerous times and to share it with others in your office.

Handout materials and the phone number for live presentations are made available to you prior to the event via email from the presenter and from the "MyAccount" link on the menu bar. Copies of the presentations are included with recorded versions.

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