Comment on 1026.19 – Certain Mortgage and Variable Rate Transactions | Financial Consumer Protection Department (2023)

19(a)(1)(i) Timing of disclosure

1.Ceiling.Section 1026.19(a) requires advance disclosure of credit terms in reverse mortgage transactions under Section 1026.33 secured by the residence of a consumer who is also subject to the Real Estate Settlement Procedures Act (RESPA) and its implementing regulations. X. To be covered by §1026.19(a), a transaction must be a federal mortgage loan under RESPA. "Federal Mortgage Loan" is defined by RESPA (12 U.S.C. 2602) and Regulation X (12 CFR 1024.2(b)) and is subject to any interpretation by the Office.

2.Schedule and Use of Estimates.The disclosures required by §1026.19(a)(1)(i) must be provided or mailed within three business days after the lender receives the consumer's written request. The general definition of "business day" in §1026.2(a)(6) - a day on which the creditor's offices are open to the public for substantially all of their business functions - is used for the purposes of §1026.19(a )( 1 ) used )(I).verComment 2(a)(6)-1. This general definition is consistent with the Regulation X definition of a "business day" - a day on which the creditor's offices are open to the public to carry out substantially all of their business functions.ver12 CFR 1024.2. Accordingly, the three business day period in §1026.19(a)(1)(i) for prior disclosure coincides with the period in which creditors subject to RESPA must provide good faith estimates of settlement costs. If the lender does not know the exact terms of the loan, the lender must base the disclosures on the best information reasonably available and state that the disclosures are estimates pursuant to §1026.17(c)(2). If many of the disclosures are estimates, the creditor may include an appropriate explanation (for example, "all numerical disclosures, except the late payment disclosure, are estimates") rather than identifying each estimate separately. Alternatively, the lender can mark only those items primarily affected by unknown information as estimates. (vercomment to §1026.17(c)(2).) Creditor may provide explanatory material regarding estimates and contingencies that may affect actual conditions pursuant to comment to §1026.17(a)(1).

3.Written request.Lenders may rely on RESPA and Regulation X (including interpretations issued by the Office) to determine whether a "written request" has been received. In general, Regulation X defines an “application” as the submission of financial information by the borrower in anticipation of a credit decision with respect to a federal mortgage loan.ver12 CFR 1024.2(b). An order is received when it reaches the creditor by any of the means by which orders are normally transmitted: by mail, hand delivery, or through an intermediary agent or broker. (verComment 19(b)-3 provides guidance in determining whether or not the transaction involves an intermediary or broker). When an order reaches the creditor through an intermediary or broker, the order is considered to have been received when it reaches the creditor, not when it reaches the agent or broker.

4.Applications rejected or withdrawn.The lender may determine within three business days that the application is not or cannot be approved on the requested terms, e.g. B. When a consumer applies for a type or amount of credit that the lender does not offer, or the consumer's application cannot be approved for any other reason. In this case, or if the consumer withdraws the claim within three business days, the creditor is not obliged to provide the information referred to in this section. If the lender does not provide advance information and the transaction is subsequently consummated on the original terms, the lender is in breach of this provision. However, if the consumer changes the order because the lender is unwilling to approve it on the original terms, there is no default for failure to provide disclosures based on the original terms. But the amended application is a new application under §1026.19(a)(1)(i).

5.Breakdown of the amount financed.For many mortgage transactions, the breakdown of the amount financed required by §1026.18(c) includes items such as fees or points of origin that must also be disclosed as part of the good faith estimates of settlement costs required by RESPA. Lenders that provide good faith RESPA estimates are not required to provide consumers with a breakdown of the amount financed.

19(a)(1)(ii) Collection of Fees

1.Tariff.The consumer must receive the disclosures required by this section before paying or assuming any fees charged by a lender or other person in connection with the consumer's application for a mortgage settlement pursuant to §1026.19(a)(1)(i), except as otherwise provided in §1026.19(a)(1)(iii). If the lender personally delivers the information to the consumer, a fee may be collected at any time after delivery. If the lender publishes the disclosures, the lender may collect a fee after the consumer receives the disclosures or, in all cases, after midnight of the third business day after the disclosures are mailed. For the purposes of §1026.19(a)(1)(ii), the term "business day" means any calendar day that is not a Sunday or a holiday, as defined in §1026.2(a)(6).verComment 2(a)(6)-2. For example, assuming no intervening holidays, a lender that receives the consumer's written application on Monday and mails the mortgage loan advance notice by mail on Tuesday may charge the consumer after midnight on Friday.

2.restricted prices.A lender or other person will not charge any fees, e.g. B. for appraisal, underwriting, or brokerage services, until the consumer has received the disclosures required by §1026.19(a)(1)(i). The only exception to the interest rate cap allows a creditor or another person to:Realand a reasonable fee to obtain a consumer's credit history, such as B. for credit reports.

3.chargingA creditor complies with §1026.19(a)(1)(ii) if:

I. The lender receives the consumer's written application directly from the consumer and charges no fee other than the consumer's credit history fee until the consumer receives advance notice of the mortgage loan.

ii. A third party submits a consumer's written request to a lender, and neither the lender nor the third party collects any fees other than the fee for obtaining the consumer's credit history until the consumer receives advance notice of the mortgage loan from the lender.

iii. A third party submits a consumer's written request to a second lender after a request from the same consumer has been rejected by a prior lender (or after the consumer has withdrawn), and if a fee has already been collected, the new lender The lender or third party does not impose or collect any additional fees until the consumer receives an advance mortgage loan statement from the new lender.

19(a)(1)(iii) Exception to rate limitation

1.Requirements.A lender or other person may charge a fee before the consumer receives required disclosures when obtaining a consumer's credit history, for example, when purchasing consumer credit reports. The fee must also beRealand in reasonable quantity. For example, a lender may charge a fee for obtaining one or more credit reports if obtaining one or more credit reports is part of the creditor's normal course of business. For example, if the criteria of §1026.19(a)(1)(iii) are met, the creditor may label or refer to that fee as an "application fee."

19(a)(2) Waiting Periods for Prior Disclosures and Modified Disclosures

1.Definition of working hours.For the purposes of §1026.19(a)(2), “business day” means any calendar day that is not a Sunday or a holiday, as defined in §1026.2(a)(6).verComment 2(a)(6)-2.

2.Completion after both cooldowns expire.Execution may not take place before both the seven business day waiting period and the three business day waiting period have expired. Suppose a lender delivers the preliminary information to the consumer in person or by mail on Monday, June 1, and the lender delivers the amended information to the consumer in person on Wednesday, June 3. is the third business day after the consumer has received the changed information, settlement cannot take place until Tuesday, June 9, which is the seventh business day after the changed information is notified or mailed.

Paragraph 19(a)(2)(i)

1.Tempo.Disclosures required by §1026.19(a)(1)(i) must be delivered or mailed no later than the seventh business day prior to Termination. The seven business day waiting period begins when the lender delivers or posts the advance statements, not when the consumer receives or is deemed to have received the advance statements. For example, if a lender delivers the preliminary information to the consumer in person or mails it on Monday, June 1, the settlement can occur beginning Tuesday, June 9, the seventh business day after delivery or mailing. of the preliminary information.

Section 19(a)(2)(ii)

1.Conditions of rediscovery.If, at the time of consummation, the disclosed APR is correct pursuant to §1026.22, the obligor need not provide any corrected disclosure pursuant to §1026.19(a)(2). Conversely, if the reported annual fee is incorrect under §1026.22, the lender must amend the amended terms (including the annual fee) so that the consumer receives it no later than the third business day prior to completion. Assuming closing is scheduled for Thursday, June 11, and early postings for a typical mortgage transaction show an APR of 7.00%:

I. On Thursday, June 11, the annual rate is 7.10%. The creditor is not required to provide corrected information pursuant to §1026.19(a)(2).

ii. On Thursday, June 11, the APR is 7.15%. The lender must provide the corrected information so that the consumer receives it by Monday, June 8.

2.content of new releases.If a new disclosure is required, the lender may provide a complete set of new disclosures or disclose only the changed terms. If the creditor chooses to provide a complete set of new disclosures, the creditor may or may not highlight the new terms as long as the disclosures meet the format requirements of §1026.17(a). If the creditor chooses to disclose only the new terms, all of the new terms must be disclosed. For example, a different APR almost always results in a different finance charge and often a new payment schedule; Any such changes would have to be published. If, in addition, irrelevant terms such as the financing amount or the prepayment penalty deviate from those originally announced, the exact terms must be specified. However, new disclosure is not required if the only misstatements involve different estimates of the APR and no variable interest rate has been added. For a discussion of the redisclosure requirement when adding a floating rate feature,verComment 17(f)-2. For a discussion of disclosure requirements in general,verthe comment in §1026.17(f).

3.Tempo.If new disclosures are required due to the annual percentage inaccuracy, they must be received by the consumer no later than the third business day prior to termination. (In the case of rediscoveries triggered by other events, the creditor must provide corrected information prior to foreclosure.ver§1026.17(f).) If the lender personally notifies the consumer of the amended disclosures, the settlement may occur any time on the third business day after notification. If the lender posts the corrected information, the consumer will be deemed to have received the corrected information three business days after posting to determine the three business day grace period required by §1026.19(a)(2)(ii). Lenders who use email or a courier other than the postal service can also go this route.

4.Basis for comparison of the annual effective interest rate.To determine whether a lender is required to make modified disclosures under Section 1026.22, a lender must compare (a) the APR at the time of termination with (b) the APR specified in the lender's most recent disclosures to consumers. Assuming that a typical mortgage transaction is scheduled to close on Thursday, June 11, initial May disclosures indicated an annualized rate of 7.00% and revised disclosures received by the consumer on Friday, June 5 stated an annualized rate of 7.15%:

I. On Thursday, June 11, the annual rate is 7.25%, which exceeds the last published annual rate by less than the prevailing tolerance. The creditor is not required to provide additional corrected information or to wait an additional three business days under §1026.19(a)(2).

ii. As of Thursday, June 11, the annual rate is 7.30%, exceeding the last published annual rate by more than the applicable tolerance. The lender must provide corrected information to consumers by Monday, June 8.

19(a)(3) Consumer Waiver of Waiting Period Before Consumption

1.Modification or Waiver.A consumer may modify or waive the right to a waiting period under §1026.19(a)(2) only after the lender provides the information required under §1026.18. The consumer owes aRealpersonal financial difficulties that imply the conclusion of the credit operation before the end of the grace period. Compliance with these conditions will be determined by the circumstances of each situation. An example of aRealpersonal financial difficulties. Any consumer who is primarily responsible for the legal obligation must sign the waiver in writing for the waiver to take effect.

2.Examples of exemptions within the seven business day waiting period.Assume that the advance notice is personally delivered to the consumer on Monday, June 1, and the consumer then waives the seven-business-day grace period (which would have ended on Tuesday, June 9) for the loan to be completed on Friday, June 1. June. 5th June:

I. If the APR on advance disclosures is inaccurate under §1026.22, the lender must provide the consumer with an amended disclosure prior to consummation, which triggers the three business day waiting period under §1026.19(a)(2)(ii ). Upon receipt of the corrected disclosure, the consumer must waive the three business day waiting period to complete the transaction by Friday, June 5.

ii. If a change occurs that does not make the APR inaccurate in advance disclosures pursuant to §1026.22, the obligor must disclose the changed terms prior to consummation pursuant to §1026.17(f). Disclosure of the changed terms does not create an additional waiting period and the transaction can be completed on June 5 without the consumer providing the lender with any additional changes or waivers.

3.Examples of waivers made after the seven business day grace period.Assume that the preliminary information is delivered personally to the consumer on Monday, June 1, and execution is scheduled for Friday, June 19. On Wednesday June 17 there is a change in the Annual Plan:

I. If the APR on advance disclosures is inaccurate under §1026.22, the lender must provide the consumer with an amended disclosure prior to consummation, which triggers the three business day waiting period under §1026.19(a)(2). Upon receipt of the corrected disclosure, the consumer must waive the three business day waiting period to complete the transaction by Friday, June 19.

ii. If a change occurs that does not make the APR inaccurate in advance disclosures pursuant to §1026.22, the obligor must disclose the changed terms prior to consummation pursuant to §1026.17(f). Disclosure of the modified terms will not create an additional waiting period and the transaction may be completed on Friday, June 19 without the consumer providing the lender with any additional modification or waiver.

19(a)(4) Note

1.inclusion in other information.The notice required by §1026.19(a)(4) must be grouped with the disclosures required by §1026.19(a)(1)(i) or §1026.19(a)(2).verComment 17(a)(1)-2 for a discussion of the rules for separation of disclosures. In other cases, the notice specified in §1026.19(a)(4) may be disclosed together with or separately from the disclosures required by §1026.18.verCommentary 17(a)(1)-5.xvi.

19(b) Certain Variable Rate Transactions

1.Ceiling.Section 1026.19(b) applies to any entered into floating rate business that is secured by the consumer's primary residence and has a maturity of more than one year. The requirements of this section apply not only to transactions that finance the initial purchase of the consumer's principal residence, but also to any other completed variable rate transaction secured by the consumer's principal residence. Floating rate transactions entered that are not secured by the primary residence or are secured by the primary residence but have a term of one year or less are subject to the disclosure requirements of section 1026.18(f)(1) in lieu of section 1026.19(b) . . (In addition, "shared value" or "shared appraisal" mortgages are subject to the disclosure requirements of §1026.18(f)(1) instead of §1026.19(b), regardless of the general coverage of those sections ). Purposes This section determines the term of an adjustable rate cash loan in accordance with the comment to §1026.17(c)(5). In determining whether a construction loan that can be permanently financed by the same lender is included in this section, the lender may treat the construction phase and the permanent phase as separate transactions with different maturities or as a single combined transaction. However, for purposes of the disclosures required by §1026.18, the creditor may treat the two phases as separate transactions or as a single combined transaction pursuant to §1026.17(c)(6). Finally, for floating rate transactions that are secured by the consumer's primary residence and have a maturity of more than one year, disclosures are not required under sections 1026.18(f)(2)(ii) or 1026.19(b). .

2.Tempo.A lender must provide the information required in this section at the time an application form is provided or before a consumer pays a non-refundable fee, whichever occurs first.

UE.intermediaries or corridors.However, in cases where a creditor receives a written request through an intermediary or broker, section 1026.19(b) provides a substitute time rule that requires the creditor to provide or receive disclosures within three days after receipt of the creditor's written request. ship consumers. (See Comment 19(b)-3 for guidance on determining whether or not the transaction involves an intermediary or broker.) This three-day rule also applies when the creditor receives a claim over the phone.

ii.Telephone request.In cases where the consumer only requests a telephone request, the creditor must include the prior information required in this section with the request that is sent to the consumer.

iii.In the mailIn cases where the creditor requests applications by mail, the creditor must also provide the information required in this section if an application form is attached to the application.

4.conversion.In cases where a credit account opened pursuant to this section is converted to a closed transaction pursuant to a written agreement with the consumer, the disclosures pursuant to this section may be provided at the time of conversion. (See the commentary to §1026.20(a) for information on the timing requirements for §1026.19(b)(2) disclosures when a variable interest rate is subsequently added to a transaction.)

v.Electronic Disclosure Form provided on or with Electronic Applications.Lenders must provide the information requested in this section (including the brochure) on a blank application available to the consumer in an electronic format, such as on the lender's website. Lenders have the flexibility to meet this requirement. There are several methods that lenders can use to meet the requirement. Regardless of the method used, the lender is not required to certify that the consumer has read the information. Examples of methods include the following:

A. Disclosures may automatically appear on the screen when the App appears;

B. Disclosures may be located on the same web page as the Application (whether or not they appear on the home screen) if the Application provides a clear and conspicuous reference to the location of the Disclosures and indicates that the course, fee and other cost information, as appropriate;

C. Lenders may provide a link to the electronic disclosures on or with the application as long as consumers cannot bypass the disclosures before submitting the application. The link would take the consumer to the information, but does not require the consumer to scroll through the information in its entirety; either

D. Disclosures may be located on the same web page as the request, without necessarily appearing on the home screen immediately before the button the consumer clicks to submit the request.

3.intermediaries or corridors.

I. In certain transactions involving a "middle or broker," a creditor may delay disclosure. A creditor will not delay in providing disclosures in transactions involving an attorney (as determined by applicable law) or other third party who is not an "intermediary or broker." In determining whether or not a "middleman or broker" is involved in a transaction, the following factors must be considered:

A. The number of requests sent by the broker to the lender compared to the total number of requests received by the lender. The higher the percentage of all loan applications submitted by the broker in a given period, the less likely it is that the broker will be considered a "middleman or agent" for the lender in the next period.

B. The number of orders sent by the broker to the lender compared to the total number of orders received by the broker. (This factor only applies if the lender has such information.) The higher the percentage of total loan applications received by the broker that are sent to a lender in a given time period, the less likely the broker is to be considered a Lender. “broker or agent” during the next period.

C. The amount of work (eg, document preparation) Lender expects to perform on a Broker's request, based on Lender's prior negotiations with Broker and Lender's requirements for accepting orders, taking into account the standard practice of runners in a certain area. The more the lender expects the broker to go beyond what is normally expected of a broker in this area on an application, the less likely the broker will be considered a "facilitator or agent" to the lender.

ii. An example of a "intermediary or broker" is a broker who, typically shortly after receiving a request, inquires about the credit conditions of several creditors with whom the broker does business and sends the inquiry to one of them. The broker is responsible for only a small percentage of the orders the lender receives. By the time the agent has the application, they can request a credit report and appraisal (or even create a full loan package if applicable in that particular area).

4.Other Variable Rate Schemes.Transactions in which the creditor is obligated and has complied with the disclosure requirements of the variable interest rate rules of other federal agencies are exempt from the requirements of §1026.19(b) by virtue of §1026.19(d). An exception also applies to lenders who are required by state law to comply with the above federal rules on variable interest rates. Lenders using this exemption must comply with the timing requirements of these Regulations and not the timing requirements of Regulation Z when disclosing variable interest rates.

5.Examples of floating rate transactions.

I. The following transactions, if they last for more than one year and are secured by the consumer's primary residence, are floating rate transactions subject to the disclosure requirements of §1026.19(b).

A. Revolving balloon payment instruments, where the lender has an unconditional obligation to refinance the balloon payment loan at the consumer's option (or is obligated to refinance under conditions over which the consumer has control) and has the option to increase the interest rate at the time of the rollover. (See Comment 17(c)(1)-11 for a discussion of conditions within the control of the consumer in connection with revolving balloon payment loans.)

B. Prime rate loans where the terms of the legal obligation provide that the underlying initial interest rate is fixed but will change upon the occurrence of an event such as a B. the departure of an employee of the lender, and the bond reflects the interest rate preferential interest. The disclosures made under §§1026.19(b)(1) and 1026.19(b)(2)(v), (viii), (ix), and (xii) do not apply to such loans.

C. “Price-adjusted mortgages” or other indexed mortgages that have a fixed interest rate but provide for periodic adjustments to loan payments and balances to reflect changes in an index that measures prices or inflation. The disclosures in §1026.19(b)(1) do not apply to such loans, nor do the following provisions related to determining the interest rate by adding a margin, changing the interest rate, or discounting interest: § 1026.19(b) (2)(i), (iii), (iv), (v), (vi), (vii), (viii) and (ix). (See Comments 20(c)(1)(ii)-3.ii, 20(d)(1)(ii)-2.ii, and 30-1 regarding unenforceability of variable rate reset notices and interest rate caps on the price -adjusted or similar mortgages.)

ii. Step-payment mortgages and step-rate transactions without a floating-rate feature are not considered floating-rate transactions.

Section 19(b)(1)

1.Substitute.Lenders who wish to use publications other than theseA Consumer's Guide to Adjustable Rate Mortgages,available on the Office's website must establish in good faith that their brochures are a reasonable substitute forconsumer handbook.A replacement is suitable if it is at least comparable in content and scope to the consumer's manual. Lenders may provide more detailed information than is contained in theconsumer handbook.

2.Applicability.oConsumer Handbookit need not be included for floating rate transactions subject to this section where the underlying interest rate is fixed. (See Comment 19(b)-5 for an example of a floating rate transaction where the underlying interest rate is fixed.)

Section 19(b)(2)

1.Disclosure for each variable rate program.A lender must provide disclosures to the consumer that fully describe each of the lender's variable rate loan programs in which the consumer expresses interest. If a program is available only to certain customers of an institution, a lender need not disclose that program to other consumers who express a general interest in a lender's ARM programs. Disclosures must be made at the time a request form is provided or before the consumer pays a non-refundable fee, whichever occurs first. If program disclosures cannot be provided because a consumer expresses an interest in individually negotiating credit terms that are not commonly offered, disclosures reflecting those terms may be provided as soon as possible after the terms are decided, but no later than at the time a non-refundable fee is paid. If a consumer who received program information later expresses interest in other variable rate programs available under 1026.19(b)(2), or the lender and consumer choose a program for which the consumer did not receive information, the appropriate disclosures from Lenders make disclosures as soon as possible. Of course, the lender is permitted to initially provide the consumer with information about additional programs pursuant to §1026.19(b).

2.Variable Rate Loan Program.

I. When this section is required to disclose the identification, existence or nonexistence, or exact value of a loan feature, adjustable rate loans that differ in those features generally constitute separate loan programs. For example, separate loan programs they would be based on differences in the existence of any of the following characteristics of the Loan:

A. The index or other formula used to calculate interest rate adjustments.

B. The rules regarding changes in the value of the index, interest rate, payments and loan balance.

C. The existence or absence and amount of any fees or payment limits.

D. The presence of a lawsuit resource.

E. The possibility of negative amortization.

F. The ability to transfer interest.

G. The frequency of the interest rate and payment adjustments.

H. The presence of a discount function.

I. If a loan feature is to be considered in preparing the disclosures required by §1026.19(b)(2)(viii), then adjustable rate loans that differ in that feature constitute separate programs under §1026.19(b). (2) .

ii. However, if a representative value can be provided for a loan feature or if the feature is not required to be disclosed under §1026.19(b)(2), then adjustable rate loans that differ in those features are not programs. of separate loans. For example, there would be no separate programs based on differences in the following loan characteristics:

A. The amount of a discount.

B. The value of a margin.

3.Form of distribution of the program.A lender may provide separate program disclosure forms for each ARM program it offers, or a single disclosure form that describes multiple programs. A disclosure form may consist of more than one page. For example, a creditor may attach a separate page containing a sample payment history for a specific program. A disclosure form that describes more than one program need not repeat the information applicable to each program described. For example, a form describing multiple programs might disclose information applicable to all programs in one place, with different program features (such as options that allow conversion to a flat fee) disclosed separately. However, the form must indicate whether certain features of the program described are only available in conjunction with other features of the program. Separate and multiple program disclosures may illustrate more than one loan term or payment amortization; for example, multiple columns of payments and loan balances in the historical payment example. Information can be entered into or printedConsumer Handbook(or an appropriate substitute) as long as they are identified as disclosures of the lender's loan program.

4.As appropriate.The information required in this section should only be provided if applicable. Any disclosure that is not relevant to a particular transaction may be removed. For example, if the transaction does not include a demand function, the disclosure required by §1026.19(b)(2)(x) need not be made. As used in this section,payrefers solely to a payment based on the interest rate, loan balance, and loan term, and does not refer to payment for other items such as mortgage insurance premiums.

5.reviews.A lender is required to review the disclosures required by this section annually, as soon as reasonably possible after the new index value becomes available. Revisions to the disclosures are also required when the loan program changes.

Paragraph 19(b)(2)(i)

1.Change in interest rate, payment or term.A lender must disclose the fact that the terms of the legal obligation allow it, after the transaction is complete, to increase (or decrease) the interest rate, payment, or term of the loan originally communicated to the consumer. For example, claims for a variable rate program where the interest rate and payment (but not the term of the loan) may change might say: "Your interest rate and payment may change annually." Due to interest rate fluctuations, the creditor must report this fact.

Paragraph 19(b)(2)(ii)

1.Identification of the index or formula.If a lender links interest rate changes to a particular index, that fact must be disclosed along with a source of information about the index. For example, if a lender uses the constant-maturity-adjusted average weekly US Treasury yield as an index, the disclosure might read: "Your index is the constant-maturity-adjusted average weekly US Treasury yield." .Wall Street Journal.If no specific index is used, the lender must briefly describe the formula used to calculate interest rate changes.

2.Changes at Lender's discretion.If interest rate changes are at the creditor's discretion, this must be disclosed. When a relationship is specified internally, such as a lender's policy rate, the lender should briefly describe this relationship or indicate that interest rate changes are at the discretion of the lender.

Paragraph 19(b)(2)(iii)

1.Determination of interest rate and payment.This determination requires an explanation of how the lender will determine the interest rate and the consumer's payment. In cases where a lender bases its interest rate on a specific index and adjusts the index by adding a margin, for example, the disclosure might say: "Your interest rate is based on the index plus a margin, and your payment will be based on interest rate, loan balance, and term to maturity. of the loan.” For transactions where the payment of periodic payments does not fully repay the outstanding amount at the end of the loan term, and where the final payment is equal to the periodic payment plus the remaining outstanding amount, the creditor must disclose that fact. For example, the disclosure might say: "Your recurring payments will not fully repay your loan, and you must make a one-time payment of the recurring payment plus any remaining outstanding balance at the end of the loan term."You are not required to make a final payment. irregular in the historical example or in the disclosure of rates and initial and maximum payments.If applicable, the creditor must also indicate that the fee and payment are rounded.

Paragraph 19(b)(2)(iv)

1.Present value of the margin and interest rate.Because the disclosures can be prepared in advance, the interest rate and margin may be several months old when the disclosures are delivered. Therefore, a statement advising the consumer to find out the present value of the margin applied to the index and the current interest rate is required. For example, the disclosure might say: "Ask about our current interest rate and margin."

Paragraph 19(b)(2)(v)

1.Discounted interest rate and premium.In some variable rate transactions, lenders may set an initial interest rate that is not determined by the index or formula used for subsequent interest rate adjustments. Typically, this initial fee charged to consumers is less than if it were calculated using the index or formula. However, in some cases the initial fee may be higher. If the initial interest rate is a discount or premium rate, lenders must inform the consumer of this. For example, if a lender has lowered a consumer's initial interest rate, the disclosure might read: "Your initial interest rate from him is not based on the index used for subsequent adjustments." Discussions on transactions with discount and variable premium). In addition, the disclosure should prompt consumers to inquire about the program's current discount amount. For example, the disclosure could say: "Ask us how much our adjustable rate mortgages are currently discounted." In the case of a consumer repurchase agreement or a third-party purchase agreement included in the legal obligation, the lender must disclose the program as a variable rate discount transaction, but need not disclose additional information about the repurchase agreement in your program disclosures. (See the comment on §1026.19(b)(2)(viii) for a discussion of how to reflect the discount or premium in the historical example or the maximum rate and payment disclosure.)

Article 19(b)(2)(vi)

1.Frequency.The frequency of interest rate adjustments and payments must be disclosed. If interest rate changes occur more frequently or at different intervals than payment changes, the creditor must disclose the frequency and timing of both types of changes. For example, in a floating rate transaction where interest rates change monthly but payments change annually, that fact must be disclosed. For certain ARM operations, the interval between loan completion and initial adjustment is unknown and may differ from the regular adjustment interval. In such cases, the lender may specify the initial adjustment period as a range of minimum and maximum payoff or closing dates. For example, the lender might state: “The first adjustment to your interest rate and payment will be no later than 6 months and no later than 18 months after closing. Subsequent adjustments can be done once a year after the first adjustment.” (See comment 19(b)(2)(viii)(A)-7 and 19(b)(2)(viii)(B)-4 for guidance on other disclosures when using this alternative disclosure rule.)

Paragraph 19(b)(2)(vii)

1.Fees and payment limits.The lender must disclose limits to changes (increase or decrease) in the interest rate or payment. If an initial discount is not taken into account when applying periodic or global rate caps, this fact must be disclosed. If there are general or specific time limits on interest rate increases due to other events, such as the exercise of a fixed rate conversion option or termination of the lender's employment, those limits must also be disclosed. The restrictions do not include statutory limitations as to the nature of usury or rate caps under any state or federal law or regulation. (See §1026.30 for the rule that requires a maximum interest rate to be included in certain variable rate transactions.) The lender need not disclose every general or periodic interest cap currently available. Alternatively, the lender may disclose the range of the lowest and highest general and periodic fee limits that may apply to the lender's ARM transactions. For example, the lender might state: “The limit on your rate increases at each adjustment will be set at an amount in the range: Between 1 and 2 percentage points at each adjustment. The limit to the increase in your interest rate during the term of the loan is established in an amount in the range: Between 4 and 7 percentage points above the original interest rate.” A lender applying this alternative rule must include a statement in its program Disclosures indicating that the consumer is inquiring about the general rate limits currently offered for the lender's ARM programs. (See Comment 19(b)(2)(viii)(A)-6 and 19(b)(2)(viii)(B)-3 for an explanation of the additional requirements for a creditor using this rule Alternative Disclosure of Periodic and Aggregate Rate Limits.)

2.Negative amortization and interest report.A creditor may need to disclose the possibility of a negative amortization. For example, the disclosure might say, "If any of your payments are insufficient to cover the interest owed, the difference will be added to the loan amount." that require separate disclosures. (See the comment at §1026.19(b)(2) for a discussion of the definition of an adjustable rate loan program and the disclosure format.) If a consumer has the ability to limit monthly payments, it may result in a negative amortization requirement so the lender will fully disclose the rules regarding the option, including the implications of exercising the option (how there will be negative amortization and an increase in the principal of the loan); however, the disclosure is not required to be provided in §1026.19(b)(2)(viii).

3.conversion option.If a loan program allows consumers to convert their variable rate loan to a fixed rate loan, the lender must disclose that the interest rate may increase if the consumer converts the loan to a fixed rate loan. The lender must also disclose the rules related to the conversion function, such as the period during which the loan can be converted, what fees can be charged when converting, and how the fixed interest rate is determined. The lender must identify any index or other measure or formula used to determine the fixed interest rate and any margin to be added. In disclosing the period during which the loan and margin can be converted, the lender may use information that was applied to the conversion facility in the six months prior to the preparation of the disclosures and state that the information is representative of the facilities. newly offered conversion rates. of the lender are . Information may be used pending verification of program disclosures. Although the rules regarding the conversion option must be disclosed, the effect of the exercise of the option must not be reflected in any other part of the disclosures, such as in the historical example or in the calculation of interest rates and initial and maximum payments. .

4.Loans with preferential interest rates.Section 1026.19(b) applies to prime loans where the interest rate increases upon the occurrence of an event, such as an employee's departure from the lender's employment, regardless of whether the underlying interest rate is fixed or variable. In these transactions, the creditor must disclose the event that would allow the creditor to increase the interest rate so that the interest rate increases if the employee leaves the creditor's employment. The lender must also disclose the rules for canceling the prime rate, e.g. B. Fees that may be charged when the interest rate changes and how the new interest rate will be determined.

Paragraph 19(b)(2)(viii)

1.Historical example and interest rates and initial and maximum payments.A lender may disclose the historical example, as well as interest rates and initial and maximum payments.

Paragraph 19(b)(2)(viii)(A)

1.movement index.In this section, a lender is required to provide a historical example, based on a $10,000 loan made in 1977, showing how interest rate changes made under the terms of the loan program would have affected payments and the balance of the loan. loan for a period of 15 years. . (In all cases, the lender only needs to calculate the payments and loan balance over the life of the loan. For example, on a five-year loan, the lender would show the payments and loan balance for the five-year term. ., from 1977 to 1981, with a reflected loan balance of zero for 1981. For the remaining ten years, 1982-1991, the lender need only provide the remaining index, margin, and interest values, and must continue to reflect any material terms program, such as interest caps, that affect them.) In this section, the lender will need to provide a history of index values ​​for the last 15 years. Initially, the data would give index values ​​from 1977 to the present. Each subsequent year, revised program disclosures must include one additional year's index value until 15 years of values ​​are shown. If the securities of an index are not available for 15 years, the lender only needs to go back to where the securities are available and provide a payment history and example. In all cases, only one index value should be reported per year. Thus, in operations in which interest rate adjustments are made more frequently than once a year, the creditor may assume that the interest rate and the resulting payment of the value of the index chosen for financial purposes apply throughout the entire the year for calculation of the loan balance at the end of the year and for consideration of other terms of the loan program. In cases where interest rate changes are at the discretion of the creditor (see comment to §1026.19(b)(2)(ii)), the creditor must provide a history of fees imposed for the last 15 years as of 1977 interest rates. Submit In providing this history, the creditor need only go back as far as the creditor's interest rates can reasonably be determined.

2.Selection of index values.The historical example should reflect the method by which index values ​​are determined in the program. If a lender uses an average of index values ​​or another index formula, the history provided must reflect those values. The lender must select a date or, if an average of individual values ​​is used as an index, a time period and must base the example on index values ​​measured from the same date or time period for each year represented in the history. . Any date or period during the year can be selected, but in the historical example the same date or period must be used for each year. For example, a creditor might use values ​​for the first business day of July or the first week ending in July for each of the 15 years shown in the example.

3.margin selection.For purposes of the disclosure required by §1026.19(b)(2)(viii)(A), a creditor may select the representative margin used in the six months prior to the preparation of the disclosures and disclose that the margin is one that the lender has recently used. The selected margin can be used until a creditor reviews the disclosure form.

4.amount of discount or rebate.For purposes of the disclosure required by §1026.19(b)(2)(viii)(A), a creditor may select a discount or premium (amount and term) used in the six months prior to the disclosure, and must disclose that the discount or surcharge has been used recently by the creditor. The discount or premium must be reflected in the historical example whenever the discount or premium is valid. A believer might assume that a refund that would have been in effect for any part of the year would have been in effect for the entire year to reflect the historical example. For example, a 3-month discount could be valid for the entire first year of the example; a 15-month discount may be applied during the first two years of the example. When illustrating the impact of the discount or premium, lenders should adjust the interest rate value in the historical example and not adjust the margin or index values. For example, if the fully indexed interest rate was 10% in the six months prior to the preparation of the disclosures, but the interest rate for the first year of the program was 8%, the lender would discount the first interest rate by 2 percent. points in the historical example.

5.credit term.In calculating loan payments and balances in the historical example, a lender need not base disclosures on every payment or amortization term it offers. Instead, the disclosures for ARMs may be based on 5-, 15-, and 30-year payback maturities or amortizations, as follows: ARMs with terms or paybacks greater than 1 to 10 years may be based on a 5-year term or payback years; ARMs with terms or amortization greater than 10 to 20 years may be based on a 15-year term or amortization; and ARMs with a life or amortization greater than 20 years may be based on a life or amortization of 30 years. Therefore, disclosures for ARMs offered in maturities greater than 1 year up to 40 years can only be based on maturities of 5, 15, and 30 years. Of course, a lender can always base the information on the terms or rebates actually offered. If the creditor bases disclosures on 5, 15, or 30 year terms or amortizations, as noted above, the term or amortization used for the disclosure must be identified.

6.rate limits.A creditor using the alternative interest cap disclosure rule described in Comment 19(b)(2)(vii)-1 must base the historical example on the larger periodic and general interest caps set forth in §1026.19(b). )(2) (vii). In addition, the creditor must indicate the restrictions used in the historical example. (See Comment 19(b)(2)(viii)(B)-3 for an explanation of the use of the higher interest rate in other disclosures.)

7.adjustment frequency.For certain transactions, creditors may apply the alternative rule described in Comment 19(b)(2)(vi)-1 to disclose the frequency of payment and fee adjustments. In such cases, for purposes of historical illustration, the creditor may assume that the first adjustment occurred at the end of the first full year in which the adjustment could occur. For example, for an ARM where the first adjustment may occur between 6 and 18 months after closing and annually thereafter, the lender may assume that the first adjustment in the historical example occurred at the end of the first year. (See Comment 19(b)(2)(viii)(B)-4 for an explanation of the maximum interest rate calculation and payment when the initial adjustment period is unknown.)

Paragraph 19(b)(2)(viii)(B)

1.Interest rates and initial and maximum payments.The disclosure form must disclose the initial and maximum interest rates and payments on a $10,000 loan maturing at an initial interest rate (index value plus adjusted margin by the amount of any repayment or premium) applicable to the loan program. starting from a specific month and year. Of disclosure. (See Comment 19(b)(2)-5 for revisions to loan program disclosure.) In calculating the maximum payment under this paragraph, the lender must assume that the interest rate on the loan program will increase as soon as possible and the disclosed maximum payment must reflect the amortization of the loan during that period. So, for a loan with caps or interest rate caps of 2 percentage points per year (and 5 percentage points in general), the maximum interest rate would be 5 percentage points higher than the originally published interest rate. In addition, because of the 2 percentage point annual interest rate cap, the loan would not reach the maximum interest rate until the fourth year, and the maximum payment disclosed would reflect the amortization of the loan during that period. If the loan program includes an initial discount or premium rate, the initial interest rate must be adjusted by the amount of the discount or premium.

2.credit term.When calculating the initial and maximum payments, the lender does not need to base the information on each payment term or amortization offered in the program. Instead, the creditor can follow the rules set forth in Comment 19(b)(2)(viii)(A)-5. If a historical example is provided pursuant to §1026.19(b)(2)(viii)(A), the terms or amortization used in the historical example will be used in the calculation of the initial and maximum payments. In addition, creditors must provide the payment or repayment term used for disclosure under this section.

3.rate limits.A creditor applying the alternative interest rate limitation disclosure rule described in Comment 19(b)(2)(vii)-1 must calculate the maximum interest rate and maximum payment based on the interest rate limitations. periodic and global interest disclosed in §1026.19 (b) )(2)(vii). In addition, the lender must specify the interest caps that will be used to calculate the maximum interest rate and payment. (See Comment 19(b)(2)(viii)(A)-6 for an explanation of the use of the higher interest rate in other disclosures.)

4.adjustment frequency.For certain transactions, a creditor may apply the alternative rule for disclosing the frequency of fee and payment adjustments described in Comment 19(b)(2)(vi)-1. In such cases, the creditor must base calculations of initial and maximum fees and payments on the first possible adjustment disclosed in §1026.19(b)(2)(vi). (See Comment 19(b)(2)(viii)(A)-7 for an explanation of how the historical example may be disclosed when the initial adjustment period is unknown.)

5.Periodic declaration of payments.A statement that the periodic payment may increase or decrease significantly may be satisfied by disclosure in paragraph 19(b)(2)(vi) where it states, for example: "Your monthly payment may increase or decrease significantly due to annual changes in the interest".

Paragraph 19(b)(2)(ix)

1.Payment Calculation.A lender must include a statement with the disclosure form that explains how a consumer can calculate their actual monthly payments for a loan amount other than $10,000. The example must be based on the most recent payment shown in the historical example or the starting interest rate reflected in the maximum rate and payment disclosure. For transactions where the final payment shown in the historical example is not for the last year of the index values ​​shown (such as a five-year loan), a lender may provide additional examples based on the initial and maximum payments specified in § 1026.19(b)(2)(viii)(B). However, the lender is not required to calculate the consumer's payments. (See model clauses in Exhibit H-4(C).)

Paragraph 19(b)(2)(x)

1.request function.If an adjustable rate loan that is subject to the requirements of §1026.19(b) contains a claim feature, as discussed in the commentary to §1026.18(i), that fact must be disclosed. (Under §1026.18(i), creditors would also disclose the claim in the Standard Disclosures provided below.)

Paragraph 19(b)(2)(xi)

1.Personalization notes.A lender must inform the consumer what information will be included in subsequent notices of adjustment and when such notices will be made. (See comment to §1026.20(c) and (d) regarding notifications of adjustments.) For example, the disclosure under §1026.20(d) could read: “You will be given at least 210 but not more than 240 days notice before the first payment of the adjusted amount is due after the initial interest rate adjustment. of the loan. This notice will contain information about the adjustment, including the interest rate, payment amount, and loan balance." Date of first payment for the adjusted amount after an interest rate adjustment that results in a change in payment This notice contains information about the adjustment, including the interest rate, payment amount, and loan balance.”

Paragraph 19(b)(2)(xii)

1.Various credit programs.A lender that offers multiple adjustable rate loan programs must provide information about each adjustable rate loan program in accordance with §1026.19(b)(2). Unless disclosures are initially provided for all of its variable rate programs, the lender must inform the consumer that other closed variable rate programs exist and that disclosure forms are available for these additional loan programs. For example, the disclosure form might say: "Information on other adjustable rate mortgage programs is available upon request."

19(c) Electronic Disclosures

1.form of disclosure.Whether disclosures are required to be made electronically depends on:

I. If a consumer accesses an ARM Loan Application electronically (other than as described in ii. below), p. B. online on a personal computer, the lender must provide the disclosures electronically (such as with the application form on its website) to comply with the requirement to provide timely disclosures in or with the application. If, instead, the creditor sent the consumer paper notices, this requirement would not be met.

ii. On the other hand, if a consumer is physically present at the lender's office and electronically accesses an ARM Loan Application, for example, through a terminal or kiosk (or if the consumer uses a terminal or kiosk located on the premises of affiliate or a third party agreed upon with the lender to provide applications to consumers), the lender may provide disclosures in electronic or paper format, provided the lender complies with the time, delivery, and retention requirements of the Regulation.

19(e) Mortgage Loans - Advance Notices.

1.Affiliate.The term "affiliate" as used in §1026.19(e) has the same meaning as in §1026.32(b)(5).

19(e)(1) Supply of Disclosures.

19(e)(1)(i) Accreditors.

1.Requirements.Section 1026.19(e)(1)(i) requires prior disclosure of credit terms on completed loan transactions secured by real property or a unit of interest, other than reverse mortgages. These disclosures must be made in good faith. Except as provided in §1026.19(e), a disclosure is bona fide if it is consistent with §1026.17(c)(2)(i). Section 1026.17(c)(2)(i) provides that when the creditor is unaware of the information necessary for an accurate disclosure, the creditor must make the disclosure based on the best information reasonably available to the creditor at the time of the disclosure. divulgation. will be provided to the consumer. The 'reasonable availability' standard requires the creditor to act in good faith and exercise due diligence in obtaining information. See comment 17(c)(2)(i)-1 for a discussion of the standard set forth in §1026.17(c)(2)(i). See Comment 17(c)(2)(i)-2 for disclosures under §1026.19(e) that are estimates.

2.cooperative units.Section 1026.19(e)(1)(i) requires advance disclosure of credit terms on completed loan transactions that are not reverse mortgages secured by real estate or a cooperative entity, regardless of whether a cooperative entity is treated as real estate. by state or other applicable laws.

19(e)(1)(ii) Mortgage Agent.

1.Mortgage Broker Responsibilities.Section 1026.19(e)(1)(ii)(A) ​​provides that when a mortgage broker receives a request from a consumer, the lender or mortgage broker will provide the consumer with the information required in §1026.19(e). (1). ) must provide disclosures (i) pursuant to §1026.19(e)(1)(iii). Section 1026.19(e)(1)(ii)(A) ​​also provides that in providing the required information, the mortgage broker must comply with all applicable requirements of §1026.19(e). This means that "mortgage broker" should read in place of "lender" for all provisions of §1026.19(e), except to the extent that such reading would create liability for mortgage brokers under §1026.19(f). By way of illustration, §1026.19(e)(4)(i) states that if a creditor uses a revised estimate pursuant to §1026.19(e)(3)(iv) for the purpose of determining good faith under the terms of §1026.19(e)(3)(i) and (ii), the creditor must provide a revised version of the information required in §1026.19(e)(1)(i) or the information required in §1026.19(f )(1). (i) (including any revised disclosures pursuant to §1026.19(f)(2)(i) or (ii)) that reflect the revised estimate. "Mortgage broker" may not be read in place of "lender" with respect to disclosures required by §1026.19(f)(1)(i), (f)(2)(i), or (f)(2)(ii) ) ), as mortgage brokers are not responsible for the disclosures required by §1026.19(f)(1)(i), (f)(2)(i), or (f)(2)(ii). In addition, §1026.19(e)(1)(ii)(A) ​​provides that the lender must ensure that the disclosures provided by mortgage brokers meet all the requirements of §1026.19(e) and that the disclosures made by the Disclosures provided to mortgage brokers, all of these requirements satisfy the lender's obligation under §1026.19(e). The term “mortgage broker” as used in §1026.19(e)(1)(ii) has the same meaning as in §1026.36(a)(2). See also comment 36(a)-2. Section 1026.19(e)(1)(ii)(B) provides that if a mortgage broker provides the information required by section 1026.19(e), he must also comply with the requirements of section 1026.25(c). For example, if a mortgage broker provides the information required by §1026.19(e)(1)(i), he must retain the records for three years under §1026.25(c)(1)(i).

2.Lender Responsibilities.If a mortgage broker makes the disclosures required by §1026.19(e) on behalf of the lender, the lender remains responsible under §1026.19(e) to comply with the requirements of §1026.19(e). For example, if a mortgage broker receives a consumer's request and provides the consumer with the information required by §1026.19(e)(1)(i), the lender meets the requirements of §1026.19(e)(1)( i) if you provide consumers with duplicate information. In the same example, even if the broker provides an erroneous disclosure, the creditor is liable and cannot issue a revised disclosure to correct the error. The lender is expected to communicate with the broker to ensure that the broker is acting on behalf of the lender.

19(e)(1)(iii) Term.

1.Schedule and Use of Estimates.The disclosures required by §1026.19(e)(1)(i) must be made no later than three business days after the lender receives the consumer's request. For example, if a request is received on a Monday, the creditor meets this requirement by making the disclosures in person on or before Thursday or by mailing them on or before Thursday, provided each weekday is a business day. For purposes of §1026.19(e)(1)(iii)(A), the term “business day” means a day on which the obligee's offices are open to the public for the conduct of substantially all of its business functions.ver§1026.2(a)(6).

2.Waiting period.The seven business day grace period begins when the lender delivers or mails the disclosures, not when the consumer receives or is deemed to have received the disclosures. For example, if a lender provides the preliminary information to the consumer in person or on Monday, 1 of §1026.19(e)(1)(iii)(B), Saturday is a business day under §1026.2(a)(6) .

3.Applications rejected or withdrawn.The lender may determine within three business days that the application is not or cannot be approved on the terms requested, such as when the consumer's creditworthiness is below the minimum score required for the terms requested by the consumer. or the consumer requests a type or amount of credit that the lender does not offer. In that case, or if the consumer withdraws the application within three business days, for example, by informing the lender that they intend to borrow from another lender within three business days, the lender must comply with the established requirements. at §1026.19(e)(1)(i). If the creditor does not provide advance disclosures and the transaction is subsequently consummated on the terms originally required, the creditor is in breach of §1026.19(e)(1)(i). However, if the consumer changes the application because the lender is unwilling to approve it on the originally requested terms, there is no breach of contract since no information was provided based on those original terms. But the amended application is a new application under §1026.19(e)(1)(i).

4.Shared time.If Completion occurs within three business days after creditor's receipt of an instruction for a transaction made for the consumer's interest in a timeshare plan pursuant to 11 U.S.C. 101(53D), a creditor complies with §1026.19(e)(1)(iii) by providing the disclosures required in §1026.19(f)(1)(i) in lieu of the disclosures required in §1026.19(e)(1 ) ). ) )(YO).

5.Mortgage loan with multiple initial payments.Section 1026.19(e)(1)(iii) generally requires a lender to deliver or mail the credit estimate no later than the third business day after the lender receives the consumer's application and no later than the seventh business day before consummation. When a multiple down payment loan to finance the construction of a home can be continuously financed by the same lender, §1026.17(c)(6)(ii) and Comment 17(c)(6)-2 allow a Lenders will treat the construction phase and the ongoing phase as one combined disclosure transaction or more than one separate disclosure transaction for each transaction. For as-work transactions that are disclosed as one transaction, the creditor will comply with §1026.19(e)(1)(iii) by providing a combined disclosure required by §1026.19(e)(1)(i) no later than the third day or sent the business day following receipt of the order by the creditor and up to the seventh business day prior to execution. For permanent and construction transactions identified as a separate construction phase and a separate permanent phase for which a request for permanent and construction financing has been received, the creditor complies with Section 1026.19(e)(1)(iii) by delivering or by mailing separate disclosures pursuant to §1026.19(e)(1)(i) for both construction and permanent financing, no later than the third business day after the lender receives the application and no later than the seventh business day business before completion. A Holder may also provide the separate disclosure required by Section 1026.19(e)(1)(i) for the Perpetual Phase prior to receiving a Perpetual Financing Request at any time up to the seventh business day prior to Completion. To illustrate:

I. Suppose a lender does not receive a consumer home loan application until Monday, June 1. The lender is only required to provide or mail the disclosures required under §1026.19(e)(1)(i) for mortgage loans by Thursday, June 4, the third business day after the lender receives the consumer's request and the seventh business day before closing the transaction.

ii. Suppose the lender receives a consumer application for construction and permanent financing on Monday, June 1. disclosed as a separate transaction or transactions no later than Thursday, June 4, the third business day after the lender receives the consumer's order, and no later than the seventh business day prior to the completion of the transaction.

iii. Suppose the lender does not receive the consumer's mortgage application until Monday, June 1. Let's further assume that on Monday, June 8, the lender receives the consumer's application for permanent financing. (e)(1)(i) for mortgage loans, by Thursday, June 4, the third business day after the lender receives the consumer's mortgage application only and the seventh business day before the closing of the mortgage transaction. The lender must provide the disclosures required by §1026.19(e)(1)(i) for perpetual financing by Thursday, June 11, the third business day after the lender receives the consumer's application for perpetual financing and the seventh business day prior. upon closing of the permanent financing transaction.

4. Assume the same facts as Comment 19(e)(1)(iii)-5.ii, with the lender providing the disclosures required by §1026.19(e)(1)(i) for mortgage loans and permanent loans . If the lender generally conducts, or expects to have, separate accounts for mortgage loans and permanent financing for mortgage loans and permanent financing, providing separate credit estimates for mortgage loans and permanent financing allows the lender to provide separate closing information for separate stages. For example, further assume that the consumer applied for permanent financing after receiving separate credit estimates for the home loan and permanent financing, that the mortgage loan is scheduled to complete on July 1, and that the permanent financing is scheduled to complete on July 1. of July. is scheduled on or about June 1 of the following year. Lender may provide the closing disclosure for the Mortgage Financing at least three business days prior to the closing of this transaction on July 1 and delay the closing disclosure for the Permanent Financing until three business days prior to the closing of this transaction on or about on June 1 of the following year pursuant to §1026.19(f)(1)(ii). Lender may also prepare a revised credit estimate for Perpetual Financing in accordance with the procedures in §1026.19(e)(3)(iv)(F) at any time prior to 60 days prior to Closing.

19(e)(1)(iv) Obtaining prior information.

1.courier delivery.Section 1026.19(e)(1)(iv) provides that if the disclosures required by §1026.19(e)(1)(i) are not provided to the consumer in person, the consumer is deemed to have made the disclosures three business days after delivery or publication. Alternatively, the creditor may rely on proof that the consumer received the information within three business days. For example, if the lender sends the notices by overnight mail on Monday and the consumer signs up for the overnight mail on Tuesday, the lender can show that the notices were received on Tuesday.

2.Electronic Delivery.The three business day period provided in §1026.19(e)(1)(iv) applies to electronic delivery methods, such as email. For example, if a lender emails the disclosures required by Section 1026.19(e) on Monday, Section 1026.19(e)(1)(iv) would assume that the consumer received the disclosures on Thursday, three business days later. Alternatively, the lender may rely on evidence that the consumer previously received the emailed information. For example, if the lender sends an email with the details at 1:00 p.m. m. At 5:00 p.m. on Tuesday, the consumer sends an email to the lender acknowledging receipt of the notifications. the same day the creditor was able to prove that the notifications were received on the same day. Lenders using electronic delivery methods such as email must also comply with §1026.37(o)(3)(iii), which states that the disclosures in §1026.37 may be provided to the consumer in an electronic format, subject to the consumer's consent and other applicable provisions. of the Electronic Signature Law. For example, if a lender emails the disclosures required by §1026.19(e)(1)(i) to a consumer, but the lender does not obtain the consumer's consent to receive email disclosures before sending the disclosures, then the lender fails to comply with §1026.37(o)(3)(iii) and the creditor fails to comply with §1026.19(e)(1)(i), assuming the disclosures are not otherwise made in accordance with the requirements of § 1026.19(e) )(1)(iii).

19(e)(1)(v) Consumer waives waiting time before consumption.

1.Modification or Waiver.A consumer may not modify or waive their eligibility for the seven business day waiting period required by §1026.19(e)(1)(iii) until the lender provides the information required by §1026.19(e)(1)( Yo). . The consumer must be in an honest personal financial situation, which implies the conclusion of the credit operation before the end of the grace period. Compliance with these conditions is determined by the circumstances of the individual case. The impending foreclosure sale of the consumer's home, where the foreclosure proceeds unless the loan funds are made available to the consumer during the waiting period, is an example of genuine personal financial distress. Any consumer who is primarily responsible for the legal obligation must sign the waiver in writing for the waiver to take effect.

2.Examples of exemptions within the seven business day waiting period.If the pre-notification is personally delivered to the consumer on Monday, June 1, the seven business day waiting period will end on Tuesday, June 9. After a one-day waiting period, final disclosures required by §1026.19(f)(1)(i) may be provided three business days prior to Completion as required by §1026.19(f)(1)(ii) in on Tuesday, April 2, June 2020, and the loan can be completed on Friday, June 5. See §1026.19(f)(1)(iv) for the waiver of the three business day waiting period under §1026.19(f).

19(e)(1)(vi) Purchasing for Compliance Service Providers.

1.Permission to buy.Section 1026.19(e)(1)(vi)(A) ​​allows lenders to set reasonable requirements for provider qualifications. For example, the lender may require that a consumer-selected settlement agent be duly licensed in the applicable jurisdiction. Conversely, a lender will not allow a consumer to make a purchase for the purposes of §1026.19(e)(1)(vi) if the lender requires the consumer to select a provider from a list provided by the lender. Whether the lender will allow the consumer to purchase pursuant to §1026.19(e)(1)(vi)(A) ​​will be determined based on all relevant facts and circumstances. The requirements of §1026.19(e)(1)(vi)(B) and (C) do not apply if the lender does not allow the consumer to purchase under §1026.19(e)(1)(vi)(A). . .

2.Disclosure of services that the consumer can buy.If a lender allows a consumer to purchase a fulfillment service, §1026.19(e)(1)(vi)(B) requires the lender to identify the fulfillment services requested by the provider for which the consumer may purchase in the information provided pursuant to §1026.19(e)(1)(i). See §1026.37(f)(3) for the content and format of the disclosure of services that require credit that the consumer can purchase.

3.Written list of providers.If the lender allows the consumer to purchase a required settlement service, §1026.19(e)(1)(vi)(C) requires the lender to provide the consumer with a written list that identifies at least one available provider of that service and the consumer can choose another provider for this service. The fulfillment service providers identified on the written list required by §1026.19(e)(1)(vi)(C) must match the required fulfillment services for which the consumer can make the purchases specified in §1026.37(f )(3). See Form H-27 in Appendix H to this part for a list of models. Holders who correctly use Form H-27 on Schedule H will comply with §1026.19(e)(1)(vi)(C). Lenders may make changes to the format or content of the Form H-27 on Schedule H and will be deemed to comply with §1026.19(e)(1)(vi)(C) as long as the changes reflect the content that Clarity or the sequence essential part of the form. For example, an acceptable change to Form H-27 in Appendix H would include deleting the Estimated Fees column.

4.Identification of available providers.Section 1026.19(e)(1)(vi)(C) requires the lender to identify settlement service providers available to the consumer for settlement services requested by the lender that the consumer may purchase. A lender does not meet the identification requirement in §1026.19(e)(1)(vi)(C) unless it provides sufficient information to allow the consumer to contact the provider, such as: B. the name under which the provider does business and the name of the provider's address and phone number. Similarly, a lender does not meet the availability requirement in §1026.19(e)(1)(vi)(C) if it provides a written list consisting only of settlement service providers who are no longer in business or provide services where the consumer or property is located.

5.Statement that the consumer can choose another provider.Section 1026.19(e)(1)(vi)(C) requires the lender to include in the written list a statement that the consumer may choose a provider not on that list.verForm H-27 of Appendix H to this part to obtain a sample of said statement.

6.Additional information to the written list.The creditor may include in the written quote a statement that the quote from a settlement service provider does not constitute an endorsement of that service provider. The lender may also identify providers of services the consumer may not purchase on the written list, provided the lender clearly and conspicuously distinguishes those services from services the consumer may purchase. This can be achieved by placing the services under different headings. For example, if the list provided pursuant to §1026.19(e)(1)(vi)(C) identifies pest inspection and survey providers, but the consumer can choose a provider other than the one listed only for the purpose of research, then the Listing expressly informs the consumer that the consumer may select a provider other than the one mentioned in the listing for search purposes only.

7.Relationship to RESPA and Regulation X.Section 1026.19 does not prohibit creditors from including members on the written list required by section 1026.19(e)(1)(vi)(C). However, a lender that includes affiliates on the written list must also comply with 12 CFR 1024.15. In addition, the written list is a "reference" under 12 CFR 1024.14(f).

19(e)(2) Activities prior to disclosure.

19(e)(2)(i) Collection of Consumer Charges.

19(e)(2)(i)(A) ​​Limitation of Fees.

1.restricted prices.A lender or other person cannot collect a fee, e.g. B. for an assignment, appraisal, or subscription until the consumer has received the disclosures required by §1026.19(e)(1)(i) and has indicated their intent to proceed with the transaction. . The only exception to the fee limitation allows the lender or another person to charge a reasonable, bona fide fee to obtain a consumer credit report pursuant to §1026.19(e)(2)(i)(B).

2.intention to proceed.Section 1026.19(e)(2)(i)(A) ​​provides that a consumer may indicate their intent to proceed with a transaction in any manner they choose, except where the lender requires a specific form of Communication. The creditor must document this notice to satisfy the requirements of §1026.25. For example, oral communication in person immediately after making the disclosures required by §1026.19(e)(1)(i) is a sufficient indication of intent. Oral communications by telephone, written communications by email, or signing a preprinted form are also sufficient indications of intent if such actions are taken after receipt of the disclosures required by Section 1026.19(e)(1)(i). . However, the consumer's silence is not an indication of intent because it cannot be documented to meet the requirements of §1026.25. For example, a lender or third party may not provide information, wait some time for the consumer to respond, and then charge the consumer a fee for a review if the consumer does not respond, even though the lender or third party discloses that this has been done.

3.Tariff.Prior to providing the disclosures required by §1026.19(e)(1)(i), a lender or other person may, at any time, charge a credit reporting fee in connection with a consumer's application for a mortgage loan. pursuant to §1026.19(z)(1)(i), as provided in §1026.19(e)(2)(i)(B). The consumer must have received the disclosures required by §1026.19(e)(1)(i) and have indicated their intent to proceed with the transaction described by those disclosures before paying any other fees charged by a creditor or other person in connection with the payments. or handles the consumer's application for a mortgage loan subject to §1026.19(e)(1)(i).

4.chargingA creditor or other person complies with §1026.19(e)(2)(i)(A) ​​if:

I. A lender receives a consumer request directly from the consumer and charges no fee other than a reasonable and fair fee for obtaining the consumer's credit report until the consumer receives the disclosures required by §1026.19(e)(1)(i ) and indicates the intent to proceed with the transaction described by these disclosures.

ii. A third party submits a consumer application to a lender and neither the lender nor the third party charges any fee other than a reasonable and bona fide fee to obtain a consumer's credit report until the consumer receives the disclosures required in §1026.19( e) . (1)(i) and indicates the intent to proceed with the transaction described in these disclosures.

iii. A third party submits a consumer application to a lender after another lender has denied the consumer's application (or after the consumer has withdrawn the application) and if a fee for obtaining the credit report has already been charged, the new No additional fees are charged by the lender or third party until the consumer receives the information required in §1026.19(e)(1)(i) from the new lender and indicates their intention to proceed with the transaction described by that information.

5.Rates “imposed” by one person.For the purposes of §1026.19(e), a person "imposes" a fee when asking a consumer to provide a method of payment, even if payment is not made at that time. For example, if a lender or other person requires the consumer to present a check for $500 to pay a "handling fee" before the consumer receives the disclosures required by §1026.19(e)(1)(i), the lender or another person fails to comply with §1026.19(e)(2)(i), even if the creditor or other person has stated that the check will not be paid until the time required by §1026.19(e)(1)(i ) disclosures required have been received by the consumer and are awaiting the subsequent manifestation of the consumer's intention to cash the check. Similarly, a lender or other person does not meet the requirements of §1026.19(e)(2)(i) if the lender or other person requires the consumer to provide a credit card number before the consumer can make disclosures required under §1026.19 receives (e)(1)(i), even if the lender or other person has promised not to charge the consumer's credit card the $500 processing fee up to the time required by §1026.19(e )(1)(i) required disclosures to the consumer and waited for the consumer to subsequently indicate their intent to proceed. Conversely, a lender or other person complies with §1026.19(e)(2)(i) if the lender or other person requires the consumer to provide a credit card number before the consumer obtains the information required under § 1026.19(e)(1). ). (i) and subsequently indicate intent to proceed, provided the consumer's authorization is only to pay the cost of a credit report and the lender or other person pays a reasonable, good faith fee only to obtain the credit report from the consumer. This occurs even if the lender or someone else maintains the consumer's credit card number and charges the consumer a $500 processing fee upon receipt of the disclosures required by Section 1026.19(e)(1)(i), and the consumer subsequently issues an Express Intent to Proceed with the transaction described by these disclosures, provided the lender or other person requests and obtains separate approval from the consumer for the processing fee after the consumer has taken the necessary steps pursuant to Section 1026.19 (y )(1)( i) disclosures and has indicated its intent to proceed with the transaction described in such disclosures.

19(e)(2)(i)(B) Exception to rate limitations.

1.Requirements.A lender or other person may charge a fee before providing the consumer with the required information when the fee is charged for the purchase of a consumer's credit report. The fee must also be bona fide and of a reasonable value. For example, a lender or other person may charge a fee to obtain a credit report if it is part of the ordinary course of business for the lender or another person to obtain a credit report. If the criteria of §1026.19(e)(2)(i)(B) are met, the creditor or other person must accurately describe or refer to that fee as a "credit report fee."

19(e)(2)(ii) Written consumer information.

1.Requirements.Section 1026.19(e)(2)(ii) requires the lender or other person to include a clear and prominent statement at the top of the first page of a written estimate of a specific condition or charge to the consumer, if applicable. previously provided to the consumer the consumer will receive the disclosures required by §1026.19(e)(1)(i). For example, if the lender provides a document showing the estimated monthly payment for a mortgage loan and the calculation is based on the estimated loan amount and the consumer's estimated creditworthiness, the lender must include the statement in the document. On the other hand, if the lender provides the consumer with a pre-printed list of typical closing costs in the consumer's area, the lender does not have to attach the statement. Also, a statement on a pre-printed list of interest rates available on various loan products will not be required. This requirement does not apply to advertising as defined in §1026.2(a)(2). Section 1026.19(e)(2)(ii) requires that the font size of the notice be no less than 12 point and states: “Your actual rate, payment, and costs may be higher. Get an official credit estimate before deciding on a loan.verForm H-26 of Appendix H to this part for a model return. Section 1026.19(e)(2)(ii) also prohibits the creditor or any other person from making those estimates in writing with a title, content, and format substantially similar to Form H-24 or H-25 in Appendix H to this part.

19(e)(2)(iii) Verification of information.

1.Requirements.The lender or other person may obtain any necessary information from the consumer prior to providing the Prior Information before or simultaneously with obtaining the information listed in §1026.2(a)(3)(ii). However, the lender or any other person may not require the consumer to provide documentation to verify the information collected from the consumer before providing the disclosures required by §1026.19(e)(1)(i). See also §1026.2(a)(3) and the associated application definition comment. To illustrate:

I. A lender may request the sale price and address of the property, but the lender may not require the consumer to provide a bill of sale to support the consumer's verbal information before the lender provides the information required by §1026.19 (e)(1). could. (YO).

ii. A mortgage broker may request the consumer's names, account numbers, and checking and savings account balances, but the mortgage broker may not require the consumer to provide bank statements or similar documentation to support the information the consumer provided orally prior to the mortgage brokerage contract. makes disclosures pursuant to §1026.19(e)(1)(i).

19(e)(3) Good Faith Determination for Closing Cost Estimates.

19(e)(3)(i) General Rule.

1.Application.Section 1026.19(e)(3)(i) establishes the general rule that estimated closing costs disclosed in §1026.19(e) are not bona fide if the fee paid or imposed on the consumer exceeds that originally specified in §1026.19 (e) the amount indicated exceeds ) 1026.19 (e)(1)(i). Although §1026.19(e)(3)(ii) and (iii) provide exceptions to the general rule, the fees generally governed by §1026.19(e)(3)(i) include those that:

I. Fees paid to the lender.

ii. Fees paid to a mortgage broker.

iii. Commissions paid to an affiliated credit institution or mortgage broker.

4. Fees paid to an independent third party when the lender does not allow the consumer to purchase a third party service provider for a settlement service.

v. Transfer fees.

2.Fees paid or imposed by the consumer.For the purposes of §1026.19(e), a “fee paid or imposed on the consumer” means the final amount of the fee paid or imposed on the consumer when consuming or billing, whichever is later. “Termination” is defined in §1026.2(a)(13). “Billing” is defined in Regulation X, 12 CFR 1024.2(b). For example, the consumer pays the creditor $100 in filing fees at closing. Settlement of the transaction is complete five days after completion and the actual registration fees are $70. The lender refunds the consumer $30 immediately upon registration. The registration fee paid by the consumer is $70.

3.Dues “paid” to an individual.For the purposes of §1026.19(e), a fee is not considered to have been “paid to a person” if the person does not retain the fee. For example, if a consumer pays the lender's transfer taxes and filing fees at closing, and the lender later uses those funds to pay the district that imposed those fees, the transfer taxes and filing fees will not apply. "pay" the creditor. for the purposes of §1026.19(e). If a consumer pays an appraisal fee to the lender prior to closing on the property and the lender later uses those funds to pay another party for an appraisal, the appraisal fee is not remitted to the lender for purposes of Section 1026.19(e). . A fee is also not considered “paid to a person” for the purposes of §1026.19(e) if the person retains the fee as reimbursement of an amount already paid to the other party. If a lender pays for an appraisal before closing and the consumer pays the lender an appraisal fee at closing, the fee is not "paid" to the lender for purposes of §1026.19(e), even if the lender withholds the fee because payment is the return of an amount already paid.

4.Transfer fees and admission fees.See comments 37(g)(1)-1, -2, and -3 for a discussion of the difference between transfer taxes and registration fees.

5.provider.Disclosure of "creditor claims" under §1026.37(g)(6)(ii) is required under §1026.19(e)(1)(i). "Lender-Creditor", as identified in §1026.37(g)(6)(ii), represents the sum of non-specific creditor claims and specific creditor claims. Non-specific creditor claims are generalized payments from creditors to the consumer not specify a specific fee in disclosures pursuant to §1026.19(e)(1) Specific creditors are specific payments, such as B. credit, discount, or rebate, from a lender to a consumer to pay a specific fee Unspecified creditor claims and specified creditor claims are negative charges on the consumer The actual total amount of creditor-provided creditor claims, whether specified or unspecified, less than "creditor claims " estimates identified in §1026.37(g)(6)(ii) and pursuant to §1026.19(e)) is an additional Fee to the consumer for the purpose of establishing good faith pursuant to c at §1026.19(e)(3)(i). For example, if the lender discloses an estimate of $750 for "creditor's credit" under §1026.19(e), but the consumer is awarded only $500 in creditor's credit, the lender has not complied with §1026.19(e)( 3) ) (i) because the actual value of the creditor's claims provided is less than the estimated "creditor's claims" disclosed pursuant to §1026.19(e) and, therefore, a greater burden on the consumer for purposes of good faith determination pursuant to §1026.19(e )(3)(i). However, if the creditor discloses an estimate of $750 for "creditors' claims" under §1026.37(g)(6)(ii) to cover the cost of a $750 appraisal fee, and the appraisal is subsequently increased by $150 , increases creditor's value increases the amount of creditor's claim by $150 to pay for the increase, the credit is not revised in a manner that violates the requirements of §1026.19(e)(3)(i) because, although the credit increases by relative to the amount disclosed, the amount paid by the consumer has not. However, if the lender discloses a "lender's loan" estimate of $750 to cover the cost of a $750 appraisal fee, but then reduces the loan by $50 because the appraisal fee decreased by $50, then the creditor requirements are met. § 1026.19(e)(3) ) (i) defaulted because, although the value of the appraisal rate has decreased, the value of the creditor's credit has decreased. See also §1026.19(e)(3)(iv)(D) and Comment 19(e)(3)(iv)(D)-1 for a discussion of creditor claims related to charges based on in interests.

6.Good faith examination of creditors' claims.For the purpose of performing the good faith analysis required in §1026.19(e)(3)(i) for creditor claims, the total amount of creditor claims, specific or non-specific, actually provided to the consumer with claim value compared “creditor claims” under §1026.37(g)(6)(ii). The total amount of creditor credit actually extended to the consumer is determined by adding the value of "creditor credit" identified in §1026.38(h)(3) with amounts paid by the lender that are attributable to specific borrowing costs or other costs. . disclosed pursuant to §1026.38(f) and (g).

7.Use of unrounded numbers.Sections 1026.37(o)(4) and 1026.38(t)(4) require that the dollar amounts of certain charges disclosed in the credit estimate and financial statement disclosure, respectively, be rounded to the nearest whole dollar. However, to perform the good faith analysis required by §1026.19(e)(3)(i) and (ii), the lender must use unrounded numbers to compare the fee actually paid or imposed on the consumer for a settlement service. Compare the cost of the service with the estimated rate.

19(e)(3)(ii) Limited increases allowed for certain rates.

1.Requirements.Section 1026.19(e)(3)(ii) provides that certain estimated fees are bona fide if the sum of all fees paid or imposed on the consumer is the sum of all fees disclosed pursuant to §1026.19(e). . exceed rates. by more than 10%. Section 1026.19(e)(3)(ii) allows this limited increase only for the following items:

I. Fees paid to an unaffiliated third party if the lender allows the consumer to purchase the third party's service pursuant to §1026.19(e)(1)(vi)(A).

ii. admission fees.

2.Total increase limited to 10 percent.Pursuant to §1026.19(e)(3)(ii)(A), if an individual fee estimated pursuant to §1026.19(e)(3)(ii) is bona fide if the sum of all fees pursuant to with § 1026.19(e)(3)(ii) is increased by more than 10 percent, regardless of whether a particular rate is increased by more than 10 percent. This applies even if an individual charge is omitted from the estimate provided in §1026.19(e)(1)(i) and is then charged to consumption. The following examples illustrate the good faith determination of fees pursuant to §1026.19(e)(3)(ii):

I. Assuming the creditor includes an estimated $300 settlement agent fee in the disclosures in §1026.19(e)(1)(i), the settlement agent fee is included in the category of fees required by section 1026.19 (e)(3) are subject to )(ii) and the total of all charges subject to §1026.19(e)(3)(ii) (including settlement agent fees) is $1,000. In this case, the creditor does not violate §1026.19(e)(3)(ii) if the settlement agent's actual fee exceeds the settlement agent's estimated fee by more than 10% (that is,fee exceeds $330), provided the sum of all actual fees does not exceed the sum of all estimated fees by more than 10% (that is,the sum of all such fees does not exceed $1,100).

ii. For disclosures in §1026.19(e)(1)(i), assume the total of all estimated fees subject to §1026.19(e)(3)(ii) is $1,000. If the creditor does not include an estimated fee for the notary fee, but the consumer is billed a $10 notary fee and the notary fee is subject to section 1026.19(e)(3)(ii), the creditor will not is in violation of section 1026.19(e)(1)(i) if the sum of all amounts billed to the consumer under §1026.19(e)(3)(ii) does not exceed $1,100, even if no fees have been filed individual notaries in the estimated disclosures pursuant to §1026.19(e)(1)(i).

3.Services for which the consumer can, but does not have to, choose a billing service provider.Good faith will be determined under §1026.19(e)(3)(ii) and not under §1026.19(e)(3)(i) if the lender allows the consumer to purchase a fulfillment service provider under §1026.19(e ). (1)(vi)(A). Section 1026.19(e)(3)(ii) provides that if the lender requires a service related to the mortgage loan transaction and allows the consumer to purchase that service pursuant to Section 1026.19(e)(1)(vi ) , but the consumer does not select a settlement service provider or selects a creditor-designated settlement service provider from the list, then good faith will be determined in accordance with §1026.19(e)(3)(ii) instead of §1026.19(e)(3) )(i). For example, when a lender, in disclosures pursuant to §§1026.19(e)(1)(i) and 1026.37(f)(3), discloses an estimated fee to an independent settlement agent and allows the consumer to purchase that service, but the consumer chooses not to have a provider or selects a provider designated by the lender from the written list provided pursuant to §1026.19(e)(1)(vi)(C), then the settlement agent's estimated fee will be included in applicable fees for purposes of §1026.19(e)(3)(ii) may not increase by more than 10% in total. However, if the consumer chooses a provider that is not on the written list, good faith will be determined in accordance with §1026.19(e)(3)(iii).

4.admission fees.Section 1026.19(e)(3)(ii) provides that a good faith estimate of a third party service fee or registration fee will be made if the information specified in Section 1026.19(e)(3)(ii) )(A) the specified conditions are met, (B) and (C) are met. There are no filing fees for third-party services because filing fees are paid to the appropriate government agency with which the documents related to the mortgage transaction are filed, and thus the provisions of §1026.19(e)(3) (ii) (B) that a third party service fee not paid to an affiliate of Lender may not be counted toward registration fees. The condition in §1026.19(e)(3)(ii)(C) that the creditor allows the consumer to purchase the service from a third party also does not apply. Therefore, registration fee estimates must only meet the condition set forth in §1026.19(e)(3)(ii)(A) ​​to meet the requirements of §1026.19(e)(3)( ii).

5.Calculation of the added value of the estimated rates.In calculating the total amount of the Estimated Fees for the purpose of performing a good faith check pursuant to §1026.19(e)(3)(ii), the total amount of the Estimated Fees must reflect the fees for the services actually rendered. . For example, suppose the creditor included an estimated fee of $100 for a pest inspection in the disclosures required by §1026.19(e)(1)(i), and the fee is included in the category of fees subject to §1026.19 ( z) (3)(ii) but a pest inspection was not conducted in connection with the transaction, then for the purposes of the good faith verification required by §1026.19(e)(3)(ii), the the sum of all § 1026.19(e)(3)(ii) fees paid or tax to the consumer will be compared to the sum of all fees disclosed under § 1026.19(e) less the $100 estimated pest inspection fee.

6.Purchase a third-party service.For good faith to be determined in §1026.19(e)(3)(ii), a creditor must allow a consumer to purchase in accordance with §1026.19(e)(1)(vi)(A). Section 1026.19(e)(1)(vi)(A) ​​provides that a lender allows a consumer to purchase a settlement service if the lender allows the consumer to choose the provider of that service, subject to reasonable requirements. If the lender allows the consumer to purchase under §1026.19(e)(1)(vi)(A), good faith will be governed by §1026.19(e)(3)(ii), unless the lender either the lender or an affiliate of the obligee, in which case good faith is determined in §1026.19(e)(3)(i). As noted in Comment 19(e)(1)(vi)-1, all relevant criteria are used to determine whether the lender allows the consumer to purchase under §1026.19(e)(1)(vi)( A) Facts and circumstances

19(e)(3)(iii) Variations Allowed for Certain Fares.

1.Good faith requirement for prepaid interest, property insurance premiums, and pledged amounts.Estimates of prepaid interest, property insurance premiums, and amounts held in an escrow, lien, reserve, or similar account must be consistent with the best information reasonably available to the creditor at the time of disclosure. Differences between the amounts of such charges set forth in §1026.19(e)(1)(i) and the amounts of such charges paid or consumer taxes shall not constitute a good faith violation provided that the originally estimated charge or lack of a The estimated fee for a particular service was based on the best information reasonably available to the creditor at the time of disclosure. This means that the appraised value disclosed in §1026.19(e)(1)(i) was obtained by the creditor with due care and in good faith.verNotes 17(c)(2)(i)-1 and 19(e)(1)(i)-1. For example, if the creditor applies for home insurance but does not include the home insurance premium in the estimates under §1026.19(e)(1)(i), the creditor's nondisclosure does not comply with §1026.19(e)) (3(iii). However, if the lender does not require flood insurance and the subject property is located in an area with frequent flood events but not specifically in an area where flood insurance is required, the flood insurance flooding will not be within the original estimates under Section 1026.19(e)(1)(i) are not a good faith violation under §1026.19(e)(3)(iii) OR, if the lender knows the loan is due on the 15th of the month, but estimates that the prepaid interest, payable on or after the 30th of that month, does not comply with the §1026.19(e)(3)(iii) subdisclosure. However, if the Lender estimates , consistently using the best information reasonably available, that the loan will be available on 30 §1026.19(e)(3)(iii).

2.Request in good faith the required services selected by the consumer.If the lender requests a service, the lender will allow the consumer to purchase that service in accordance with §1026.19(e)(1)(vi)(A), the lender will provide the services required in §1026.19(e)(1) list available. ). required in §1026.19(e)(3)(i) or (ii). Differences between the amounts of such charges set forth in §1026.19(e)(1)(i) and the amounts of such charges paid or consumer taxes shall not constitute a good faith violation provided that the originally estimated charge or lack of a The estimated fee for a particular service was based on the best information reasonably available to the creditor at the time of disclosure. For example, if the consumer notifies the lender that it will select a clearing agent not specified by the lender from the written list required by Section 1026.19(e)(1)(vi)(C), and the lender selects a clearing agent that is too low value discloses the billing agent's estimated price of $20, if the average prices of billing agent fees in this range are $150, then the subdisclosure does not comply with §1026.19(e)(3)(iii) and in good faith is specified in § 1026.19(e). (3)(i). If the lender allows the consumer to purchase pursuant to §1026.19(e)(1)(vi)(A) ​​but fails to provide the written list required by §1026.19(e)(1)(vi)(C), in good faith provision is provided in §1026.19(e)(3)(ii) instead of §1026.19(e)(3)(iii) unless the Settlement Service Provider is the Creditor or an affiliate of the Creditor in good faith faith in that case Faith is specified in § 1026.19(e)(3)(i). As noted in Comment 19(e)(1)(vi)-1, all relevant criteria are used to determine whether the lender allows the consumer to purchase under §1026.19(e)(1)(vi)( A) Facts and circumstances

3.Good faith requirement for property taxes or non-mandatory services chosen by the consumer.Differences between the amounts disclosed in §1026.19(e)(1)(i) of estimated charges for property taxes or services not claimed by the creditor and the amounts of those charges paid or consumer taxes will not constitute a breach of trust. and belief provided that the original estimated fee, or lack of an estimated fee, for a particular service was based on the best information reasonably available to the creditor at the time of disclosure. For example, if the consumer notifies the lender that they will receive a type of inspection not required by the lender, the lender must include the charge for that item in the disclosures required by section 1026.19(e)(1)(i), but not comparison of the actual inspection fee amount with the original inspection fee calculation is necessary to perform the good faith verification required by §1026.19(e)(3)(iii). The original estimated fee, or lack of an estimated fee, for a particular service complies with §1026.19(e)(3)(iii) when prepared based on the best information reasonably available to the Lender at the time Estimate is offered. But, for example, if the property in question is in a jurisdiction where consumers would normally be represented at closing by their own attorney, even if this is not required, and the lender does not include a fee for the consumer's attorney, or includes one under an Estimate for such rate based on original estimates pursuant to §1026.19(e)(1)(i), then the creditor's improper nondisclosure or understatement does not comply with §1026.19(e)(3)(iii ). Also, the amount disclosed for property taxes must be based on the best information reasonably available to the creditor at the time of disclosure. For example, if the creditor fails to account for a property tax charge or includes a gross understatement of that charge in the original estimates under section 1026.19(e)(1)(i), then the creditor's failure to disclose creditor or excessive understatement, does not correspond to §1026.19(e)(3)(iii) and property tax collection would be subject to a good faith determination pursuant to §1026.19(e)(3)( Yo).

4.Good faith accusations.For covered transactions, §1026.19(e)(1)(i) requires the lender to provide the consumer with good faith estimates of the disclosures in §1026.37. Section 1026.19(e)(3)(iii) establishes that a good faith estimate of the expenses established in §1026.19(e)(3)(iii) corresponds to the best information reasonably available to the creditor at the time of the disclosure provided and that good faith is determined in accordance with Section 1026.19(e)(3)(iii), even if such fees are paid to the obligor or the obligee's affiliate, provided that the fees are in good faith. To determine good faith under §1026.19(e)(1)(i), fees must be legal and related to the services actually provided.

19(e)(3)(iv) Revised estimates.

1.Application.Pursuant to §1026.19(e)(3)(i) and (ii), good faith is determined by calculating the difference between the estimated rates originally provided pursuant to §1026.19(e)(1)(i) and the rates actual estimates Payments paid or imposed by the consumer. Section 1026.19(e)(3)(iv) provides the exception to this rule. Pursuant to §1026.19(e)(3)(iv), in order to make a good faith determination pursuant to §1026.19(e)(3)(i) and (ii), the creditor may use an estimate of a lien in lieu of the estimate originally provided in § 1026.19(e)(1)(i) if the change is due to any of the reasons set forth in §1026.19(e)(3)(iv)(A) to ( F) ).

2.Actual increase.A creditor may determine good faith pursuant to §1026.19(e)(3)(i) and (ii) based on the increased charges reflected in the revised disclosures only to the extent that the reason for the verification, as stated set forth in § 1026.19 (e)(3)(iv)(A) through (F) actually increases the specific charge. For example, if a consumer requests an extension of the rate freeze, the revised disclosures a lender relies on for purposes of a good faith determination under Section 1026.19(e)(3)(i) may reflect a new fee freeze extension, but the fee will not exceed the fee for the fee freeze extension that Provider charges in the ordinary course of its business, and Provider cannot rely on changes in other fees unrelated to the extension of the rate freeze to comply with any provision under Good Faith pursuant to §1026.19(e)(3)(i) and (ii).

3.documentation requirement.To comply with §1026.25, creditors must maintain records showing compliance with the requirements of §1026.19(e). For example, when revised disclosures affecting settlement costs are made pursuant to section 1026.19(e)(3)(iv)(A) due to a change in circumstances, the creditor must be able to establish compliance with section 1026.19(e) documenting the original document estimating the costs in question, explaining the reason for the revision and how this affected settlement costs, showing that the corrected disclosure has increased the estimate only to the extent that the reason for the revision actually increased the cost and showing that the time requirements of §1026.19(e)(4) are met. However, the documentation obligation does not require separate corrected information for each change. A creditor may provide modified disclosures that reflect various modified circumstances, as long as the creditor's documentation shows that each correction meets the requirements of §1026.19(e).

4.The information has been reviewed for general information purposes.Section 1026.19(e)(3)(iv) does not prohibit a creditor from issuing revised disclosures for informational purposesFor example.,keep the consumer up to date with current information, even if the revised disclosures cannot be used for a good faith determination under §1026.19(e)(3)(i) and (ii). See Comment 19(e)(3)(iv)(A)-1.ii for an example where the creditor provides revised disclosures even though the sum of all costs subject to the 10 percent forbearance category does not increases by more than 10 percent. has increased.

5.The best information reasonably available.Regardless of whether a creditor may use certain disclosures for the purpose of a good faith determination under §1026.19(e)(3)(i) and (ii), all disclosures must be made except as provided in §1026.19( and). determined based on the best information reasonably available to the lender at the time it is made available to the consumer.ver§1026.17(c)(2)(i) and Comment 17(c)(2)(i)-1. For example, if the creditor issues revised disclosures that reflect a new fee for the extension of the fixed rate period for purposes of a good faith determination under §1026.19(e)(3)(i), other fees not related to the extension of fixed rate period must include rate period must be reflected in revised disclosures Disclosures are based on the best information reasonably available to the creditor at the time the revised disclosures are provided. However, any increase in these other fees that is not related to the extension of the fee freeze cannot be used for good faith determination purposes pursuant to §1026.19(e)(3).

19(e)(3)(iv)(A) Modified Circumstances Affecting Interchange Fees.

1.Application.To determine good faith pursuant to §1026.19(e)(3)(i) and (ii), the revised rates will be compared to the actual rates if the verification was caused by a change in circumstances. See also Comment 19(e)(3)(iv)(A)-2 for the definition of a modified circumstance. The following examples illustrate the application of this provision:

UE.Fees are subject to the zero percent tolerance category.For example, suppose a lender provides an estimated appraisal fee of $200 under §1026.19(e)(1)(i) that is paid to an Associate Appraiser and therefore cannot be increased to make a determination of goodwill. faith under §1026.19 comply (e)(3)(i), except as provided in §1026.19(e)(3)(iv). The estimate was based on the information provided by the consumer in the application, which indicated that the property in question was a single-family home. Upon arriving at the property in question, the appraiser will determine that the property is in fact a single family home on a working farm. A different fee schedule applies to farmhouses. A change of circumstance has occurred (that is,Information provided by the consumer is deemed inaccurate after the disclosures required by §1026.19(e)(1)(i) have been provided, which has resulted in an increase in the cost of the evaluation. Therefore, when the lender issues revised disclosures with the adjusted appraisal fee, the actual appraisal fee of $400 paid by the owner at closing is compared to the revised appraisal fee of $400 to determine if the actual fee has increased above of the estimated rate. However, if the lender does not provide revised disclosures, the actual $400 appraisal fee must be compared to the $200 estimated appraisal fee originally disclosed.

ii.Rates are subject to 10% tolerance class.Assume a creditor submits an estimate of $400 in title rights included in the category of rights that in good faith pursuant to §1026.19(e)(3)(ii) cannot increase by more than 10 percent, except as provided at §1026.19(e)(3)(iv). Unreleased collateral is discovered and the securities firm has to do additional work to release the collateral. However, the additional charges represent only a five percent increase over the sum of all charges included in the fee category, which may not increase by more than 10 percent. A change of circumstance has occurred (that is,new information), but the sum of all costs subject to the 10 percent tolerance category has not increased by more than 10 percent. Section 1026.19(e)(3)(iv) does not prohibit the obligor from providing revised disclosures, but if the obligor issues revised disclosures in this scenario, if the disclosures required by §1026.19(f)(1)(i) are provided . , the actual yields on the $500 bonds cannot be compared to the revised yields on the $500 bonds; should be compared to the originally budgeted title fees of $400, as the sum of all costs subject to the 10 percent surcharge category has not increased by more than 10 percent as a result of changed circumstances.

2.changed circumstance.A change of circumstances may be an extraordinary event beyond the control of an interested party. For example, a war or a natural disaster would be an extraordinary event beyond the control of any interested party. A change of circumstance can also be an unexpected event specific to the consumer or the transaction. For example, if the lender provided a title insurance estimate in the disclosures required by §1026.19(e)(1)(i), but the title insurer closes the deal during underwriting, then that transaction-specific unexpected event it is a different circumstance. A changed circumstance may also include specific consumer or transaction information that the lender relied on to provide the disclosures required by §1026.19(e)(1)(i) that was inaccurate or changed after the disclosures were provided. . For example, if the lender relied on the consumer's income in providing the disclosures required by §1026.19(e)(1)(i) and the consumer indicated to the lender that they had an annual income of $90,000, however, the underwriting will prevail. that the consumer's annual income is only $80,000, so this inaccuracy in the information on which it is based is a modified circumstance. Or suppose two co-applicants applied for a home loan. One candidate's income was $30,000 while the other's income was $50,000. If the creditor relied on the combined income of $80,000 to provide the disclosures required by §1026.19(e)(1)(i), the claimant who earns $30,000 at the time of underwriting becomes unemployed and therefore reduces income combined to $50,000, then that change changes. The information referenced is a changed circumstance. A change of circumstances may also include the discovery of new consumer or transaction-specific information that the lender did not rely on when providing the original disclosures required by §1026.19(e)(1)(i). For example, if the lender relied on the value of the property when providing the disclosures required by §1026.19(e)(1)(i), but during underwriting, the seller's neighbor after learning of the impending sale of the property property disputes a property for sale limit claim, this new transaction-specific information is a different circumstance.

3.Six pieces of information presumably collected but not required.Section 1026.19(e)(1)(iii) requires lenders to provide, no later than the third business day after the lender receives the consumer's request, disclosures resulting from the six elements listed in Section 1026.2(a)( 3)(ii) information identified exist. . A lender is not required to collect a consumer's name, monthly income, social security number for a credit report, property address, property value estimate, or mortgage loan amount requested. However, in determining whether to provide a good faith estimate pursuant to §1026.19(e)(1)(i), a creditor is considered to have obtained all six of these facts. For example, if a lender provides the information required by §1026.19(e)(1)(i) before obtaining the consumer's home address, the lender cannot later claim that obtaining the home address is a change of address. circumstances under §1026.19(e)(3)(iv)(A) or (B).

19(e)(3)(iv)(B) Modified circumstances affecting eligibility.

1.Application.If changed circumstances result in a change in the consumer's eligibility for certain credit terms disclosed under §1026.19(e)(1)(i) and revised information is provided because the change in eligibility has resulted in an increased cost of processing beyond the applicable tolerance Threshold, the fee paid or charged to the consumer for the billing service, the cost of which has increased due to the change in eligibility, is compared to the revised estimated cost of the billing service to determine whether the actual fee has increased above the applicable rate. rate. My dear. For example, suppose that before providing the disclosures required by §1026.19(e)(1)(i), the lender believed that the consumer was eligible for a credit program that does not require a review. The creditor then makes the estimate disclosures required by §1026.19(e)(1)(i), which do not include the estimated cost of an estimate. During underwriting, the consumer is determined to have missed mortgage payments in the past, making them ineligible for the loan program originally identified in the estimated disclosures, but the consumer remains eligible for another program that requires an evaluation . If the lender provides revised disclosures that reflect the new program and include the qualifying rate, the actual qualifying rate will be compared to the qualifying rate included in the revised disclosures to determine if the actual rate has increased above the estimated rate. However, when revised disclosures include higher estimates of bond yields, the actual bond yields should be compared with the original estimates, assuming that the higher bond yields do not result from the change in eligibility or other justifying change. the revised disclosure. See also §1026.19(e)(3)(iv)(A) and Comment 19(e)(3)(iv)(A)-2 for the definition of changed circumstances.

19(e)(3)(iv)(C) Revisions requested by the client.

1.Application.If the consumer requests changes to the transaction that affect the items disclosed pursuant to §1026.19(e)(1)(i) and the lender provides revised disclosures that reflect the changes requested by the consumer, the final disclosures will be compared to the disclosures revised. to determine if the actual rate has risen above the estimated rate. For example, suppose the consumer decides to grant a power of attorney authorizing a family member to complete the transaction on the consumer's behalf after providing the information required by §1026.19(e)(1)(i). If the lender provides revised disclosures that reflect the power of attorney fee, the actual fees will be compared to the revised fees to determine if the fees have increased.

19(e)(3)(iv)(D) Fees related to interest.

1.Requirements.If the interest rate is not locked when the information required by §1026.19(e)(1)(i) is provided, then no later than three business days after the date the interest rate is subsequently locked, §1026.19 (e)(3) ) (iv)(D) requires the obligee to provide a revised version of the disclosures required by §1026.19(e)(1)(i) that include the revised interest rate, those specified in §1026.37 (f)(1), debtor's receivables, and any other interest-related charges and conditions. The following example illustrates this requirement:

I. Suppose a lender sets the interest rate by signing a fixed rate agreement with the consumer. If such agreement is in effect when the original disclosures required by §1026.19(e)(1)(i) are provided, the creditor's actual points and credits will be compared to those specified in §1026.37(f)(1) and the estimated points Borrower credits included in original disclosures pursuant to §1026.19(e)(1)(i) for purposes of determining good faith pursuant to §1026.19(e)(3)(i). If the consumer enters into a fixed interest rate agreement with the lender pursuant to the disclosures required by §1026.19(e)(1)(i), then §1026.19(e)(3)(iv)(D) requires that the lender provide: no later than three Business Days after the date the consumer and the lender enter into a fixed rate agreement, a revised version of the disclosures required in §1026.19(e)(1)(i) that reflects the modified interest rate and items disclosed in §1026.37(f)(1), creditor claims, and all other interest-related charges and conditions. Provided that the revised version of the disclosures required by §1026.19(e)(1)(i) reflects all the revised items and creditors' claims disclosed in §1026.37(f)(1), the actual items and the Creditors' credits will be compared to those of the creditor reviewed the Points and Credits for the purpose of determining good faith pursuant to §1026.19(e)(3)(i).

2.A post-closing disclosure will be provided.Pursuant to §1026.19(e)(3)(iv)(D), the lender must provide the consumer with a revised version of the credit estimate pursuant to §1026.19(e)(1)(i ). Section 1026.19(e)(4)(ii) prohibits a lender from providing a revised version of the credit estimate under §1026.19(e)(1)(i) on or after the date the lender provides the revised credit estimate. financial statement disclosure as required pursuant to § 1026.19(f)(1)(i). If the interest rate is set on or after the date Lender provides the Closing Statement and, as a result, the Closing Statement is inaccurate, Lender must provide Consumer with an amended Closing Statement on or before of Closing that reflects the terms amended accordingly § 1026.19(f)(2). If the interest retention period renders the final notice inaccurate prior to consummation in the manner set forth in §1026.19(f)(2)(ii), the lender must ensure that the final notice is received by the consumer as further amended. take three business days. prior to consummation, as provided in this paragraph.

19(e)(3)(iv)(E) Procedure.

1.Requirements.If more than 10 business days after the initial disclosure pursuant to §1026.19(e)(1)(iii), the consumer indicates intent to proceed with the transaction for purposes of a good faith determination pursuant to §1026.19( e)(3). ) ) (i) and (ii) a creditor may use a revised estimate of a lien instead of the amount originally disclosed in §1026.19(e)(1)(i). Section 1026.19(e)(3)(iv)(E) does not require justification to change the original estimate after 10 business days. Suppose a lender charges a $500 subscription fee for the disclosures provided in §1026.19(e)(1)(i) and the lender provides those disclosures on Monday. If the consumer indicates their intent to proceed 11 business days later, the lender may provide new disclosures for a $700 subscription fee. In this example, §1026.19(e) and §1026.25 require the lender to document that a disclosure has been provided. redisclosure pursuant to §1026.19(e)(3)(iv)(E) but does not require the lender to document a reason for the issuance fee increase.

2.A longer duration of time.For transactions in which the interest rate is fixed for a period of time, §1026.37(a)(13)(ii) requires the creditor to indicate the date and time (including the applicable time zone) of the end of the that period. If the lender establishes a period greater than 10 business days after the initial disclosure (or later extends it to a longer period) before estimated closing costs expire, notwithstanding the 10 business day period discussed in Comment 19 (e)(3) (iv )(E)-1, such longer period shall become the relevant period for purposes of §1026.19(e)(3)(iv)(E). Accordingly, in such a case, the creditor may not issue revised disclosures to make a good faith determination under §1026.19(e)(3)(i) and (ii) under §1026.19(e)(3)(iv). ). (E) until the longest period of time has elapsed. The creditor sets said term at more than 10 business days and informs the consumer of the longer term, also by verbal communication.

19(e)(3)(iv)(F) Late payoff date of a mortgage loan.

1.Requirements.A loan to buy a house not yet built or a loan to buy a house under construction (that is,Construction in Progress) is a home construction loan for the purposes of §1026.19(e)(3)(iv)(F). However, if an occupancy license has been issued for the dwelling prior to the issuance of the disclosures required by §1026.19(e)(1)(i), the dwelling is not considered a dwelling under construction and the transaction is not a construction. loan to build a house as defined in §1026.19(e)(3)(iv)(F).

19(e)(4) Provision and receipt of revised disclosures.

19(e)(4)(i) General Rule

1.Three business days are required.Section 1026.19(e)(4)(i) provides that, subject to the requirements of §1026.19(e)(4)(ii), if a creditor makes a revised estimate pursuant to §1026.19(e)( 3)(iv) ) In order to establish good faith pursuant to §1026.19(e)(3)(i) and (ii), the creditor must provide a revised version of the disclosures required pursuant to §1026.19( e)(1)(i) , or o Disclosures pursuant to §1026.19(f)(1)(i) (including disclosures modified pursuant to §1026.19(f)(2)(i) or (ii)) that reflect the modified estimate, within three business days of receipt of sufficient information, that one of the reasons for review set forth in §1026.19(e)(3)(iv)(A) through (F) has occurred. The following examples illustrate these requirements:

I. Suppose a lender requests a pest inspection. The independent pest inspection firm tells the lender Monday that the property in question contains evidence of termite damage that will require further inspection, the cost of which will result in increased estimated settlement fees under §1026.19(e)(3). )(ii) ) by more than 10 percent. The lender must provide revised disclosures by Thursday to comply with §1026.19(e)(4)(i).

ii. Assume a creditor receives notice on Monday that, due to a change in circumstances pursuant to §1026.19(e)(3)(iv)(A), title fees will increase by a total amount of six percent. of the estimated original settlement amount pursuant to §1026.19(e)(3)(ii). The creditor had received notice three weeks prior that, due to a change in circumstances pursuant to §1026.19(e)(3)(iv)(A), the pest inspection fees were increased by a total of five percent. percent of the original estimated settlement amount. , subject to §1026.19(e)(3)(ii). As such, the creditor received enough information on Monday to show good cause for the revision and must provide revised disclosures reflecting the 11% increase through Thursday to comply with §1026.19(e)(4)(i).

iii. Suppose a creditor needs an appraisal. The lender receives the appraisal report, which shows that the value of the home is significantly lower than expected. However, the creditor has reason to doubt the validity of the appraisal. The reason for the review has not been established as the lender reasonably believes that the appraisal report is incorrect. The lender then decides to send another appraiser for a second opinion, but the second appraiser returns a similar report. At this point, the creditor has received enough information to determine that the reason for the review has actually occurred and must provide the correct information within three business days of receipt of the second appraisal report. In this example, pursuant to sections 1026.19(e)(3)(iv) and 1026.25, the creditor must maintain records documenting the creditor's concerns about the validity of the appraisal to show that the reason for the review did not arise after from the reception. of the first valuation report.

19(e)(4)(ii) Correlation between revised borrowing estimates and final disclosures

1.The revised credit estimate cannot be presented at the same time as the disclosure of the financial statements.Section 1026.19(e)(4)(ii) prohibits a creditor from providing a revised version of the disclosures required by section 1026.19(e)(1)(i) as of the date the creditor made the required disclosures per section 1026.19(f) required disclosures. (1)(i). Section 1026.19(e)(4)(ii) also requires the consumer to receive any revised version of the disclosures required by Section 1026.19(e)(1)(i) no later than four business days prior to termination and provides If the revised version of the disclosures is not provided to the consumer in person, the consumer will be deemed to have received the revised version of the disclosures three business days after the creditor has delivered or mailed the revised version of the disclosures. . See also comments 19(e)(1)(iv)-1 and -2. However, if a creditor uses a revised estimate pursuant to §1026.19(e)(3)(iv) for the purpose of determining good faith pursuant to §1026.19(e)(3)(i) and (ii) , §1026.19(e) ) (4)(i) allows creditor to use revised estimate in disclosures required by §1026.19(f)(1)(i) (including disclosures modified in §1026.19(f)(2 ) (i) or (ii) ). See illustrative examples below:

I. If the lender is scheduled to meet with the consumer on Wednesday, June 3 and provide the disclosures required by §1026.19(f)(1)(i) and the APR becomes inaccurate on Tuesday, June 2, it satisfies that the lender complied with the requirements of § 1026.19(e)(4) by providing the disclosures required in §1026.19(f)(1)(i) that reflect the revised APR on Wednesday, June 3. However, the creditor will not comply with the requirements of §1026.19(e)(4) if it makes the required disclosures before Wednesday, June 3, and also the disclosures required by §1026.19(f)(1)(i) on Wednesday, June 3. of June.

ii. If the lender makes the disclosures required by §1026.19(f)(1)(i) by email on Wednesday, June 3(e)(3)(iv)(C) Tuesday, June 2, the creditor will comply with the requirements of § 1026.19(e)(4) by providing the information required by §1026.19(f)(1)(i) Amendments requested by the consumer on Wednesday, June 3. However, the lender will not comply with the requirements of §1026.19(e)(4) if it provides disclosures that reflect the changes requested by the consumer by providing the revised version of the disclosures required by §1026.19(e)(1)(i ). ). used. on Wednesday, June 3, and the disclosures required by §1026.19(f)(1)(i) on Wednesday, June 3.

iii. Completion is scheduled for Thursday, June 4. The lender's hand will provide the disclosures required by §1026.19(f)(1)(i) On Monday, June 1 and Tuesday, June 2, the consumer requests a loan modification that will result in a modified disclosure of §1026.19(e ). )(3)(iv)(C), but would not require further waiting under §1026.19(f)(2)(ii). Pursuant to §1026.19(f)(2)(i), the lender must provide the consumer with amended disclosures that reflect the amended terms in order for the consumer to receive the amended disclosures on or before Completion. The lender complies with the requirements of §1026.19(e)(4) by making the disclosures required by §1026.19(f)(2)(i) that reflect the changes requested by the consumer in person on Thursday, June 4, broadcast.

4. Completion is originally scheduled for Wednesday, June 10. Creditors will provide the disclosures required by §1026.19(f)(1)(i) by Friday, June 5. On Monday, June 8, the consumer defers compliance to Wednesday, June 17. Also on Monday, June 8, the consumer requests a flat rate extension that would result in revised disclosures under §1026.19(e)(3)(iv)(C) but not a new waiting period under §1026.19(f)( 2)(ii). The lender complies with the requirements of §1026.19(e)(4) by providing the disclosures required by §1026.19(f)(2)(i) that reflect the changes requested by the consumer on Thursday, June 11 or submitted. §1026.19(f)(2)(i) the lender is required to provide the consumer with amended disclosures that reflect the amended terms in order for the consumer to receive the amended disclosures on or before Completion. The creditor will comply with §1026.19(f)(2)(i) by personally submitting the disclosures by Thursday, June 11. Alternatively, the lender will comply with §1026.19(f)(2)(i) by providing the consumer with the disclosures by mail, including email, by Thursday, June 11, as the consumer is deemed to have complied with the receipt. amended disclosures on Monday, June 15 (unless the lender relies on evidence that the consumer received the amended information earlier). See §1026.19(f)(1)(iii) and comments 19(f)(1)(iii)-1 and -2. See also §1026.38(t)(3) and comment 19(f)(1)(iii)-2 to provide the disclosures required by §1026.19(f)(1)(i) (including the modified disclosures required by § 1026.19). (f)(2)(i) or (ii)) in electronic format.

v. Completion is originally scheduled for Wednesday, June 10. The Creditor's Hand will provide the disclosures required by §1026.19(f)(1)(i) on Friday, June 5 and the APR will become inaccurate on Monday, June 8, requiring the Creditor to delay enforcement; and provide amended disclosures, including any other amended Terms, so that Consumer receives them at least three business days prior to the Effective Date, pursuant to §1026.19(f)(2)(ii). Completion has been pushed back to Friday June 12. The lender complies with the requirements of §1026.19(e)(4) by making the disclosures required by §1026.19(f)(2)(ii) that reflect the revised APR and any other modified terms to the consumer on Tuesday, March 9 June 2020 hand delivered. See §1026.19(f)(2)(ii) and related comments for pre-enactment changes that require a new waiting period. See comment 19(e)(4)(i)-1 for further guidance on when sufficient information has been received to determine that an event has occurred.

19(f) Mortgage Loans - Final Disclosures.

19(f)(1) Provision of Disclosures.

19(f)(1)(i) Applicability.

1.Requirements.Section 1026.19(f)(1)(i) requires disclosure of the actual terms of the loan transaction and the actual costs associated with settling that transaction for closed-type loan transactions secured by real estate or a cooperative entity. that are not reverse mortgages. to §1026.33. For example, if the lender requires the consumer to deposit money into a reserve account for future tax payments, the lender must inform the consumer of the exact amount the consumer must deposit into the reserve account. If the disclosures required by §1026.19(f)(1)(i) do not contain the actual terms of the transaction, the creditor will not be in violation of §1026.19(f)(1)(i) if the creditor provides amended disclosures that include the actual terms of the transaction and satisfy the other requirements of §1026.19(f), including the timing requirements of §1026.19(f)(1)(ii) and (f)(2). For example, if the lender provides the disclosures required by §1026.19(f)(1)(i) on Monday, June 1, but the consumer adds a mobile notary service to the terms of the transaction on Tuesday, June 2, the Lender complies with §1026.19(f)(1)(i) when it provides disclosures reflecting revised terms of the transaction effective Tuesday, February 2 (2)(i).

2.The best information reasonably available.Holders may estimate the disclosures in §1026.19(f)(1)(ii)(A) ​​and (f)(2)(ii) using the best information reasonably available if the actual timeframe provided to the Holder in that moment. is the time the information is provided, in accordance with §1026.17(c)(2)(i).

UE.Actual period unknown.An actual term is unknown if it is not reasonably available to the creditor at the time of disclosure. The "reasonable availability" standard requires the creditor to exercise due diligence to obtain the information in good faith. For example, the creditor must at least use generally accepted calculation tools, but does not have to invest in the most sophisticated computer program to perform a specific type of calculation. The creditor can generally rely on the representations of other parties when obtaining information. For example, the creditor may contact the consumer for completion time, insurance companies for insurance costs, real estate agents for taxes and escrow fees, or a debt settlement agent. homeowners association or other related information. The following examples illustrate the reasonably available standard for the purposes of §1026.19(f)(1)(i).

A. Suppose a creditor makes a disclosure pursuant to §1026.19(f)(1)(ii)(A) ​​for a transaction in which the title insurer providing the title insurance policies acts as agent for settlement in connection with the transaction. but the lender does not collect the actual cost of the lender's title insurance that the consumer purchases from the title insurer, but instead discloses an estimate based on information from another transaction. The creditor failed to exercise due diligence in obtaining the information about the cost of the creditor's homeowner's insurance policy required by the "reasonable availability" standard in connection with the cost estimate disclosed for the creditor's homeowner's insurance policy.

B. Assume in the example above that the lender received information about the terms of the consumer's transaction from the settlement agent for the amounts disclosed in §1026.38(j) and (k). Lender has exercised due diligence to obtain cost information pursuant to §1026.38(j) and (k) for purposes of the "reasonably available" standard with respect to such disclosures pursuant to §1026.38(j) and (k). ).

ii.Dear All.When an actual time frame is unknown, the Holder may use estimates using the best information reasonably available to make disclosures, although the Holder knows that more accurate information will be available on or before Completion. However, the lender cannot use an estimate without exercising due diligence to determine the actual time frame of the consumer's transaction.verComment 19(f)(1)(i)-2.i. Subject to the exceptions provided in this paragraph, Section 1026.19(f)(2) requires the Holder to provide amended disclosures detailing the actual terms of the Transaction on or before Completion. Disclosures pursuant to §1026.19(f) are subject to the labeling rules pursuant to §1026.38. See comment 17(c)(2)(i)-2 for guidance on labeling estimates.

iii.liquidating agent.If a Settlement Agent provides the disclosures required by §1026.19(f)(1)(i) three Business Days prior to Completion pursuant to §1026.19(f)(1)(v), the "best information reasonably available". to the terms of its actual term is unknown to the agreement at the time of disclosure. The Settlement Agent may ordinarily rely on the representations of other parties for information, but when information about actual conditions is not reasonably available, the Settlement Agent must also adhere to the "best information reasonably available" standard. Accordingly, the settlement agent must use due diligence to obtain information when providing the financial statement disclosure in accordance with §1026.19(f)(1)(v). For example, for the table of loan terms that must be disclosed under §1026.38(b), the settlement agent used due diligence when receiving that information from the lender. Because Creditor remains responsible under §1026.19(f)(1)(v) for ensuring that financial statement disclosures are provided in accordance with §1026.19(f), Creditor is expected to maintain communication with the liquidating agent to ensure that the liquidation takes place The authorized representative acts in place of the creditor. See Comment 19(f)(1)(v)-3 for guidance on a creditor's responsibilities when disclosures are made by a settlement agent.

3.Applications rejected or withdrawn.The obligor shall not be required to provide the information required by §1026.19(f)(1)(i) if, prior to the time the obligor must provide the information in §1026.19(f), the obligee determines that the Request by the consumer does not or cannot consent to the requested terms or the consumer has withdrawn from the request and therefore the transaction is not completed. For transactions covered by §1026.19(f)(1)(i), the creditor may rely on Comment 19(e)(1)(iii)-3 to determine that disclosures made under §1026.19(f)( 1) are not required. (i) because the consumer's order is not or cannot be accepted in the desired terms or the consumer has withdrawn the order.

19(f)(1)(ii) Term.

1.Tempo.Except as provided in §1026.19(f)(1)(ii)(B), (f)(2)(i), (f)(2)(iii), (f)(2)(iv) and ( f )(2)(v), the disclosures required by §1026.19(f)(1)(i) must be received by the consumer no later than three business days prior to consumption. For example, if the closing is scheduled for Thursday, the creditor meets this requirement by hand-delivering the statements on Monday, provided all weekdays are business days. For the purposes of §1026.19(f)(1)(ii), the term "business day" means any calendar day that is not a Sunday or a holiday, as defined in §1026.2(a)(6).verComment 2(a)(6)-2.

2.Receipt of disclosures three business days prior to termination.Section 1026.19(f)(1)(ii)(A) ​​provides that the consumer must receive disclosures no later than three business days prior to consumption. To comply with this requirement, the obligor must arrange delivery accordingly. Section 1026.19(f)(1)(iii) provides that if the disclosures required by §1026.19(f)(1)(i) are not provided to the consumer in person, the consumer is deemed to have made the disclosures three business days after delivery or publication. So, for example, if the closing is scheduled for Thursday, a creditor would meet the requirements of §1026.19(f)(1)(ii)(A) ​​if the creditor files the disclosures by mail on Thursday of the previous week for For purposes of §1026.19(f)(1)(ii) Saturday is a business day pursuant to §1026.2(a)(6) and §1026.19(f)(1)(iii), the consumer would apply the notices in on the Monday prior to scheduled fulfillment as received.verComment 19(f)(1)(iii)-1. A creditor would not meet the requirements of §1026.19(f)(1)(ii)(A) ​​in this example if the creditor mailed the disclosures on the Monday before the Completion. However, in this example, the creditor could satisfy the requirements of §1026.19(f)(1)(ii)(A) ​​by sending the disclosures by email, for example, on Monday, as long as the requirements of §1026.38(t )(3)(iii) with respect to disclosures made electronically and provided that each weekday is a business day and provided that the lender receives evidence that the consumer received the electronic mail disclosures on Monday.verComment 19(f)(1)(iii)-2.

3.Shared time.For transactions made through a consumer's participation in a timeshare plan pursuant to 11 U.S.C. 101(53D), §1026.19(f)(1)(ii)(B) requires a lender to ensure that the consumer receives the disclosures required in §1026.19(f)(1)(i) through consumption. Timeshare transactions pursuant to §1026.19(f)(1)(ii)(B) may be completed at or at any time after the Consumer receives the required disclosures pursuant to §1026.19(f)(1 )(Yo). For example, if a consumer files an application for a timeshare mortgage loan with the lender pursuant to §1026.2(a)(3) on Monday, June 1, and the timeshare transaction is scheduled to close on Friday, June 5 , the lender will comply with § 1026.19(f)(1)(ii)(B) by ensuring that the consumer receives the information required by §1026.19(f)(1)(i) by the Authority on Friday, June 5 If a consumer lawsuit If Lender applies for a timeshare secured mortgage loan on Monday, June 1 and the timeshare transaction is scheduled to close on Tuesday, June 2, Lender will comply with §1026.19(f)(1))(ii) (B) to ensure that the consumer receives the disclosures required by §1026.19(f)(1)(i) before the close of business on Tuesday, June 2. In some cases, § 1026.19(e) requires that a credit estimate be provided prior to providing financial statement disclosure. See comment 19(e)(1)(iii)-4 for guidance on providing the credit estimate for transactions secured by a consumer's participation in a timeshare plan.

19(f)(1)(iii) Receive disclosures.

1.courier delivery.Section 1026.19(f)(1)(iii) provides that if the disclosures required by §1026.19(f)(1)(i) are not provided to the consumer in person, the consumer is deemed to have made the disclosures three business days after delivery or publication. If the creditor personally provides the information required by §1026.19(f)(1)(i), settlement may occur any time on the third business day after delivery. If information is mailed by Lender, such three business days will be deemed received after posting in determining the three business day waiting period pursuant to §1026.19(f)(1))(ii)(A). Alternatively, the creditor can rely on proof that the consumer received the information no later than three business days after it was posted. See Comment 19(e)(1)(iv)-1 for an example where the creditor sends disclosures by express mail.

2.Other forms of delivery.Lenders using email or a courier service other than the US Postal Service may also follow the postal disclosure approach described in Comment 19(f)(1)(iii)-1. For example, if a lender emails a disclosure required by Section 1026.19(f) on Monday, Section 1026.19(f)(1)(iii) assumes that the consumer received the disclosure on Thursday, which is three business days. after. Alternatively, the lender may rely on evidence that the consumer received the emailed information prior to delivery. See Comment 19(e)(1)(iv)-2 for an example where the lender sends disclosures by email and receives confirmation from the consumer the same day. Creditors using electronic delivery methods, such as email, must also comply with §1026.38(t)(3)(iii). For example, if a lender provides the disclosures required by §1026.19(f)(1)(i) to a consumer by email, but the lender has not obtained the consumer's consent to receive disclosures by email before sending the disclosures submitted, then the lender does not comply with §1026.38(t)(3)(iii) and the lender does not comply with §1026.19(f)(1)(i), assuming the disclosures are not otherwise made in accordance with the timing requirements of § 1026.19(f)(1)(ii).

19(f)(1)(iv) Consumer waiver of waiting period before foreclosure.

1.Modification or Waiver.A consumer may vary or waive the three business day waiting periods prescribed in §1026.19(f)(1)(ii)(A) ​​or (f)(2)(ii) only after the lender has provided the required disclosures provided. pursuant to §1026.19(f)(1)(i). The consumer must be in an honest personal financial situation, which implies the conclusion of the credit operation before the end of the grace period. Compliance with these conditions will be determined by the circumstances of each situation. The impending foreclosure sale of the consumer's home, where the foreclosure proceeds unless the loan funds are made available to the consumer during the waiting period, is an example of genuine personal financial distress. Any consumer who is primarily responsible for the legal obligation must sign the waiver in writing for the waiver to take effect.

19(f)(1)(v) Settlement Agent.

1.Requirements.For the purposes of §1026.19(f), a settlement agent is the person who performs the settlement. A settlement agent may provide the information required by section 1026.19(f)(1)(i) on behalf of the creditor. By assuming this responsibility, the Settlement Agent is responsible for compliance with all pertinent requirements of §1026.19(f), which means that "Settlement Agent" should be read instead of "Creditor" for all pertinent provisions of § 1026.19(f). , unless such an interpretation would create liability for the settlement agents under §1026.19(e). For example, Comment 19(f)(1)(ii)-3 explains that in some cases involving transactions secured by a consumer's participation in a timeshare plan, an estimate of credit must be submitted under §1026.19( and). “Transaction Agent” cannot be read in place of “creditor” in Comment 19(f)(1)(ii)-3 since Transaction Agents are not responsible for the disclosures required by §1026.19(e)(1 ) (Yo) . . To ensure timely and accurate compliance with the requirements of §1026.19(f)(1)(v), the creditor and the settlement agent must communicate effectively.

2.Obligations of the clearing house.If a winding-up entity provides a disclosure pursuant to §1026.19(f), the winding-up entity must comply with the applicable requirements of §1026.19(f). For example, if the lender and settlement agent agree that the lender will make the disclosures required by §1026.19(f)(1)(i) three business days prior to consummation pursuant to §1026.19(f)(1)( ii) )(A), and that Settlement Agent will provide any modified disclosures on or before Completion, including disclosures received by Consumer three Business Days prior to Completion pursuant to §1026.19(f)(2). (ii) and allow the consumer to view the information during the business day prior to Closing, the Settlement Agent will ensure that the consumer receives and receives the information required in §1026.19(f)(1)(i) on or before from the Cutoff Time able to view disclosures the business day prior to consumption if requested by the consumer pursuant to §1026.19(f)(2)(i). See Comment 19(f)(1)(v)-3 below for further guidance on creditor responsibilities when disclosures are made by the settlement agent. The Settlement Agent may assume responsibility for providing some or all of the disclosures required by §1026.19(f). See Comment 19(f)(1)(v)-4 for guidance on how creditors and settlement agents may share responsibilities for completing disclosures.

3.Lender Responsibilities.If a settlement agent provides the disclosures required by §1026.19(f) on behalf of the creditor, the creditor remains responsible under §1026.19(f) to ensure that the requirements of §1026.19(f) have been met. For example, if the settlement agent assumes responsibility for providing all disclosures required by §1026.19(f)(1)(i), the creditor will not comply with section 1026.19(f) if the settlement agent does not provide such disclosures. In its whole. , or if the consumer provides the Receive disclosures within three business days prior to Termination as required by §1026.19(f)(1)(ii)(A)​​and, where applicable, (f)(2) (ii) . The creditor does not meet the requirements of §1026.19(f) if it provides duplicate disclosures. For example, a creditor breaches its obligation by issuing disclosures under §1026.19(f) that are equivalent to those already issued by the settlement agent to demonstrate that the consumer received timely disclosures. The creditor is expected to maintain communication with the settlement agent to ensure that the settlement agent is acting on behalf of the creditor. Disclosures provided by a settlement agent under §1026.19(f)(1)(v) satisfy a creditor's obligation under §1026.19(f)(1)(i).

4.Permitted Shared Responsibilities - Termination of Disclosures.Creditors and Settlement Agents may agree to share the responsibility for completing disclosures under §1026.38 for disclosures under §1026.19(f)(1)(i). The Settlement Agent may assume responsibility for completing some or all of the disclosures required by §1026.19(f). For example, the creditor meets the requirements of §1026.19(f)(1)(i) and the settlement agent meets the requirements of §1026.19(f)(1)(v) if the settlement agent agrees to complete only that portion of the disclosures required by §1026.19(f)(1)(i) relating to closing costs taxes, title rights, and insurance premiums, and Owner agrees to complete the remaining disclosures required by §1026.19(f) (1). (i) and the settlement agent or lender will provide the consumer with a single disclosure form that contains all of the information required to be disclosed under §1026.19(f)(1)(i), consistent with the other requirements of §1026.19(f). ). ), such as B. Delivery time and requirements.

19(f)(2) Subsequent Amendments.

19(f)(2)(i) Pre-Execution Changes that do not require an additional grace period.

1.Requirements.Subject to §1026.19(f)(2)(i) if the disclosures provided in §1026.19(f)(1)(i) become inaccurate prior to Termination, except as required by §1026.19(f)(2)( ii ) Lender will provide the consumer with amended disclosures reflecting the amended terms so that the consumer will receive the amended disclosures on or before Completion. The creditor need not meet the time requirement in §1026.19(f)(1)(ii) if an event other than the one identified in §1026.19(f)(2)(ii) occurs and those changes occur after the creditor provided the consumer with the information required by §1026.19(f)(1)(i). For example:

I. Assume consumption is scheduled for Thursday, the consumer received the disclosures required by §1026.19(f)(1)(i) on Monday, and a general inspection is conducted on Wednesday morning. During inspection, the consumer discovers damage to the dishwasher. The seller agrees to credit the consumer $500 for a new dishwasher. The lender complies with the requirements of §1026.19(f) if it provides amended disclosures so that the consumer receives them on or before the Thursday Completion.

ii. Suppose the closing is scheduled for Friday and the lender sends the disclosures to the consumer via overnight delivery on Monday morning, thus ensuring the consumer receives the disclosures on Tuesday. On Monday night, the seller agrees to sell the consumer certain pieces of furniture for an additional $1,000, payable at closing, and the consumer will promptly notify the lender of the change. The creditor must provide corrected information for the consumer to receive before or at the time of consummation. The lender does not violate §1026.19(f) because the change in the transaction resulting from the negotiations between the seller and the consumer occurred after the lender made the final disclosures, even though the change occurred before the consumer had received final information. . .

iii. Assume consumption is scheduled for Thursday, the consumer received the disclosures required by §1026.19(f)(1)(i) on Monday, and a general inspection is performed on Wednesday morning. As a result of negotiations between the consumer and the seller, the total amount owed by the buyer increases by $500. Also on Wednesday, the lender discovers that the advertised $800 homeowner's insurance premium is actually $850. premiums are not violations of §1026.19(f)(1)(i), and Lender complies with §1026.19(f)(1)(i) by providing corrected disclosures reflecting the $550 increase Consumer must receive on or before of Completion pursuant to §1026.19( f )(2)(ii).

2.Inspection.A settlement agent may satisfy the requirement to allow the consumer to see the disclosures under §1026.19(f)(2)(i), subject to §1026.19(f)(1)(v).

19(f)(2)(ii) Pre-execution changes requiring a new grace period.

1.Conditions for Amended Disclosures.Section 1026.19(f)(2)(ii) requires the lender to provide corrected disclosures if, on the closing date, the APR becomes inaccurate, the loan principal changes, or a prepayment penalty is added to the transaction with terms modified so that the consumer received no later than the third business day before consumption. The requirements for disclosing the APR are set forth in §1026.38(o)(4), and the requirements for determining whether an APR is accurate are set forth in §1026.22. The requirements for disclosure of credit products are set forth in §1026.38(a)(5)(iii) and §1026.37(a)(10). The requirements for disclosure of prepayment penalties are set forth in §1026.38(b) and §1026.37(b)(4).

UE.Example: APR becomes inaccurate.Assume that the closing is scheduled for Thursday, June 11, and the disclosure of a regular mortgage transaction received by the consumer on Monday, June 8, pursuant to §1026.19(f)(1)(i) reveals an annual fee of 7 .00 percent:

R. On Thursday, June 11, the APR is 7.10%. The Holder is not required to delay Termination to provide corrected disclosures pursuant to Section 1026.19(f)(2)(ii) because the APR is correct pursuant to Section 1026.22, but the Holder is required under Section 1026.19(f)(2) ) agrees (i) to provide amended disclosures, including other amended terms, to the consumer by Thursday, June 11.

B. On Thursday, June 11, the APR is 7.15 percent and the consumer did not receive the corrected information until Monday, June 8 because the APR under §1026.22 is inaccurate. The lender is required under Section 1026.19(f)(2)(ii) to defer consummation and provide amended disclosures, including other amended terms, so that the consumer receives them at least three business days prior to consummation.

ii.Example: changes in the loan product.Assume consumption is scheduled for Thursday, June 11, and the disclosures in §1026.19(f)(1)(i) disclose a product that must be disclosed as a "flat rate" that does not include features that require a regular payment that could change.

A. On Thursday, June 11, the loan product to be disclosed will change to a "5/1 adjustable rate." The creditor is required to provide corrected disclosures and defer termination until the consumer has received the corrected disclosures pursuant to §1026.19(f)(1)(i) at least three business days prior to the termination that reflects the change in the product disclosure and any other modifications. terms If, after providing the corrected information in this example, the loan product changes to a "3/1 variable interest rate" before consummation, the lender must provide additional corrected information and again postpone consummation until the consumer has received the amended information provided pursuant to § 1026.19(f)(1)(i) reflecting the Product Disclosure Amendment and any other amended terms, at least three Business Days prior to Termination.

B. On Thursday, June 11, the loan product to be disclosed was changed to a “Fixed Rate Product” with a “Negative Amortization” feature. The creditor is required to provide corrected disclosures and defer termination until the consumer has received the corrected disclosures pursuant to §1026.19(f)(1)(i) at least three business days prior to the termination that reflects the change in the product disclosure and any other modifications. terms

iii.Example: A prepayment penalty is added.Assume the closing is scheduled for Thursday, June 11, and the disclosure under §1026.19(f)(1)(i) does not disclose a prepayment penalty. On Wednesday, June 10, a prepayment penalty will be added to the transaction, rendering the disclosure required by §1026.38(b) inaccurate. The lender is required to provide amended disclosures and defer execution until the consumer has received amended disclosures pursuant to §1026.19(f)(1)(i) that reflect the amended disclosure of loan terms and any other amended terms, at least three business days prior to termination. If the prepayment penalty is removed after the revised information in this example has been provided, but before completion, so that the description of the prepayment penalty is again inaccurate and no further changes to the prepayment penalty transaction, the creditor must provide the corrected information so that the consumer can present it before or before consumption pursuant to §1026.19(f)(2)(i), but the lender is not required to delay consumption because §1026.19( f)(2)(ii) (C) applies only if a prepayment penalty is added.

19(f)(2)(iii) Changes Due to Events Occurring After Termination.

1.Requirements.Pursuant to §1026.19(f)(2)(iii), if during the 30-day period after consummation an event occurs related to the settlement of the transaction that causes the information to become inaccurate and such inaccuracy will result in a Change of indicates the amount actually deducted by the consumer from the amount specified in §1026.19(f)(1)(i), the creditor must provide the modified information no later than 30 days after receiving sufficient information to show that such an event has occurred. occurred is, deliver or mail. The following examples illustrate this requirement. (See also Comment 19(e)(4)(i)-1 for further guidance on when sufficient information has been received to determine that an event has occurred.)

I. Assume that the execution takes place on a Monday and the security instrument is registered on Tuesday, the day after the execution. If the creditor learns on Tuesday that the fee charged by the notary differs from the previously published fee under §1026.19(f)(1)(i) and the amended fee results in a change in the amount actually paid by the consumer, creditor will come § 1026.19(f)(1)(i) and (f)(2)(iii) reviewing the disclosures as appropriate and delivering or mailing them no later than 30 days after Tuesday.

ii. Assume the closing occurs on Tuesday, October 1, and the security interest is not recorded until 15 days after October 1 on Thursday, October 16. §1026.19(f)(1)(i), resulting in an increase in the amount actually paid by the consumer. The lender will comply with §1026.19(f)(1)(i) and §1026.19(f)(2)(iii) by properly reviewing and delivering the disclosures within 30 days after the fair on Monday, November 4 or mail the increase in transfer taxes paid by the consumer also exceed the amount originally specified in §1026.19(e)(1)(i) beyond the limits prescribed in §1026.19(e)(3)(i ). Pursuant to §1026.19(f)(2)(v), the lender is not in violation of §1026.19(e)(1)(i) if the lender refunds the deductible to the consumer within 60 days of consummation and Lender does not violate §1026.19(f)(2)(v), 1026.19(f)(1)(i) is violated if lender provides amended disclosures to reflect repayment of such excess no later than 60 days after consummation . The lender meets these requirements under §1026.19(f)(2)(v) if it properly reviews the disclosures and delivers or mails them by November 30.

iii. Assume that the execution takes place on a Monday and the security instrument is registered on Tuesday, the day after the execution. During Tuesday's registration process, the settlement agent and lender determine that the property is subject to an undisclosed $500 unpaid harassment reduction assessment pursuant to Section 1026.19(f)(1)(i ) and determine that this is the case, in agreement with the seller, the $500 assessment will be paid by the seller and not by the consumer. Because the $500 valuation does not result in a change in the amount the consumer actually paid, the lender is not required to provide a modified disclosure under Section 1026.19(f)(2)(iii). However, the valuation results in a change in the amount actually paid by the seller from the amount specified in §1026.19(f)(4)(i). Pursuant to §1026.19(f)(4)(ii), Settlement Agent must deliver or mail the corrected disclosures to Seller no later than 30 days after Tuesday and to Creditor pursuant to §1026.19(f)( 4)(iv). ).

4. Assume that the execution takes place on a Monday and the security instrument is registered on Tuesday, the day after the execution. Assume that ten days after the settlement, the municipality where the property is located increases the property tax rates in effect after the settlement completion date. Section 1026.19(f)(2)(iii) does not require the lender to provide the consumer with modified disclosures because the increase in property tax rates is not related to the settlement of the transaction.

2.Daily interest.Pursuant to §1026.19(f)(2)(iii), if during the 30-day period after consummation an event occurs related to the settlement of the transaction that causes the information to become inaccurate and such inaccuracy will result in a Change of to indicate the amount actually deducted by the consumer from the amount specified in §1026.19(f)(1)(i), the creditor must provide the consumer with the changed information, except as described in this comment. A creditor is not required to provide modified disclosures under §1026.19(f)(2)(iii) if the only changes required to be disclosed in the modified disclosure are daily rate changes and any disclosure resulting from the daily rate modification is affected if the amount of daily interest actually paid by the consumer differs from the amount specified in §1026.38(g)(2) and (o). However, if a creditor provides a modified disclosure pursuant to section 1026.19(f)(2)(iii) for reasons other than changes in the overnight interest rate and the overnight interest rate has also changed , the creditor must on the modified disclosures pursuant to section 1026.19(f)(2)(iii) 1026.19(f)(2)(iii) the correct daily interest amount and corrected disclosures for all disclosures affected by the change in daily interest.

19(f)(2)(iv) Changes due to clerical errors.

1.Requirements.Section 1026.19(f)(2)(iv) requires the creditor to provide or mail corrected disclosures if the disclosures provided pursuant to Section 1026.19(f)(1)(i) contain non-numeric clerical errors. An error is considered a clerical error if it does not involve a numerical disclosure and does not affect the requirements of §1026.19(e) or (f). For example, if the disclosure identifies the incorrect settlement service provider as the recipient of a payment, §1026.19(f)(2)(iv) requires the creditor to provide or mail corrected disclosures that reflect the non-numerical disclosure. corrected for up to 60 days after completion. However, if the disclosure lists the property address incorrectly, for example, affecting the delivery requirement imposed by §1026.19(e) or (f), the error is not considered a clerical error.

19(f)(2)(v) Refunds related to a bona fide check.

1.Requirements.Section 1026.19(f)(2)(v) provides that the obligor shall not be in breach of §1026.19(e) if amounts paid at the time of consummation exceed §1026.19(e)(3)(i). or (ii) the amounts exceed. )(1)(i) if the lender refunds the excess to the consumer no later than 60 days after consumption and the lender does not violate §1026.19(f)(1)(i), if the lender provides corrected disclosures or mails mail the refund of a reflection of said excess no later than 60 days after completion. For example, suppose the consumer must pay four itemized consumption rates that are subject to good faith determination under §1026.19(e)(3)(i). If the actual amounts paid by the consumer for the four charges itemized pursuant to §1026.19(e)(3)(i), their respective estimates of the disclosures required by §1026.19(e)(1)(i) by $30 exceed $25, $25, and $15, then the total would exceed the limits prescribed in §1026.19(e)(3)(i) by $95 §1026.19(e)(3)(ii) totaled $1,190, but their respective estimates of required disclosures per §1026.19(e)(1)(i) were only $1,000, making a total of $90 required by §1026.19(e)(3)(ii). The lender does not violate §1026.19(e)(1)(i) if the lender reimburses the consumer $185 within 60 days of settlement. Creditor does not violate §1026.19(f)(1)(i) if Creditor provides or mails amended disclosures reflecting repayment of $185 of the overcollected amount within 60 days of consummation. See Comments 38-4 and 38(h)(3)-2 for additional guidance on disclosure of refunds.

19(f)(3) Published Rates.

19(f)(3)(i) Tarifa real.

1.Requirements.Section 1026.19(f)(3)(i) establishes a general rule that the amount charged to the consumer for a billing service must not exceed the amount actually received by the billing service provider for that service. Except as provided in §1026.19(f)(3)(ii), a lender violates §1026.19(f)(3)(i) if the amount charged to the consumer exceeds the amount actually received from the service provider for that service.

19(f)(3)(ii) Average rate.

1.Requirements.Average fare pricing is the exception to the rule in §1026.19(f)(3)(i) that consumers may not pay more than the exact amount a billing service provider charges for the provision of that service.verComment 19(f)(3)(i)-1. If the lender develops representative samples of settlement costs specific to a particular class of transactions, the lender may calculate the average cost of that settlement service rather than the actual cost of those transactions. An average billing schedule should not be used in a way that increases the total cost of billing services.

2.Transaction class definition.Section 1026.19(f)(3)(ii)(B) requires a creditor to use a reasonable time period, geographic area, and loan type to define a particular class of transaction. For the purposes of §1026.19(f)(3)(ii)(B), a period is appropriate if the sample size is sufficient to calculate the average cost with reasonable precision, as long as the period is not less than 30 days or more than six months. For the purposes of §1026.19(f)(3)(ii)(B), a geographic area and credit type are appropriate if the sample size is sufficient to calculate the average cost with reasonable accuracy, provided that the area and type of credit are not defined in such a way that costs are grouped among different population groups. For example:

I. Suppose a lender defines a geographic area that contains two subdivisions, one with an average appraisal cost of $200 and the other with an average appraisal cost of $1,000. This geographic area would not meet the requirements of §1026.19(f)(3)(ii) because the cost characteristics of the two populations are different. However, a geographic area would be adequately defined if both subdivisions had a relatively normal distribution of appraisal costs, even if the distribution for each subdivision ranged from less than $200 to more than $1,000.

ii. Suppose a lender defines a loan type that includes two different interest rate products. The average consumption rate for one product is $80, while the average consumption rate for the other product is $130. This definition of type of credit would not meet the requirements of §1026.19(f)(3)(ii) because the cost characteristics of the two products are different. However, a type of loan would be adequately defined if both products had a relatively normal distribution of registration fees, even though the distribution of each product ranged from less than $80 to more than $130.

3.Uniform use.If a lender elects to use an average fee for a processing service for a particular loan within a class, §1026.19(f)(3)(ii)(C) requires the lender to use that average fee for that service in all Loans used within the class. For example:

I. Suppose a lender decides to use an average rate for appraisal fees. The lender defines a class of transactions as all fixed-rate loans originated between January 1 and April 30 and secured by real estate or a cooperative entity in a given metropolitan area. The lender must then charge the average appraisal fee to all consumers who receive fixed-rate loans secured by real estate or a cooperative unit located in the same metropolitan area between May 1 and August 30.

ii. The example in paragraph i of this comment assumes that a consumer would not be required to pay the average appraisal fee unless an appraisal is required for that particular loan. Using the example above, if a consumer applies for credit within the defined class but already has a score report acceptable to the lender from a previous credit application, the lender cannot calculate the average score rate for the consumer because a report qualification already has an acceptable qualification report. rating have been obtained for consumer use. Although the lender has defined the class broadly to include all fixed rate loans, the lender may not require the consumer to pay the average appraisal fee if the specific fixed rate loan program requested by the consumer does not require an appraisal. .

4.Average amount paid.The average fee must correspond to the average amount paid or taxed by consumers and sellers during the predetermined period. Suppose a lender calculates an average tax certificate rate based on four-month periods beginning January 1 of each year. Tax certification fees billed to a consumer on May 20 cannot exceed the average tax certification fee paid from January 1 through April 30. update affected systems if each subsequent period is scheduled to do so. For example, a believer could set a four-month period from January 1 to April 30 and start using the average rate for that period from May 15, as long as the average rate is used through September 15, When the average rate is valid from May 1 to August 31, it takes effect.

5.Adjustments are necessary due to retrospective analysis.Lenders using average rates must ensure that the total amount paid or charged to consumers for a service does not exceed the total amount paid to providers of that service for the specific class of transaction. A creditor may find that despite developing an average cost pricing program consistent with the requirements of §1026.19(f)(3)(ii), it has charged consumers more than it has paid service providers. services over time. Suppose a lender defines a transaction class and uses that class to develop an average pest inspection fee of $135. The lender then charges $135 per transaction for 100 transactions from January 1 through April 30, but the actual average cost to the lender for pest inspections during this period is $115 for the May through August period to take into account. account the lowest average cost during the month Balance period from January to April. At this point, the lender has made $2,000 more than he paid delivery service providers for pest inspections. The lender then charges $115 per transaction for 70 transactions from May 1 through August 30, but the actual average cost to the lender for pest inspections during this period is $125 for the period May through August, the The average consumer rate for the September through December period would be $125. However, even though the lender spent $700 more than you earned during the May through August period, he spent $1,300 more than you spent in January to august. In such cases, the lender remains responsible for ensuring that the amount billed to consumers does not exceed the total amounts paid for the applicable settlement services over time. The lender can devise a variety of methods to achieve this result. For example, the lender may choose to refund the prorated excess paid to affected consumers. Or the lender may carry the calculated overage to reduce the average rate for a future period. While any method can meet this requirement, a creditor that establishes a semi-annual term and establishes a rolling monthly reassessment period is considered compliant. For example, suppose a lender sets a six-month period from January 1 through June 30 and uses the average rate from July 1. If, at the end of July, the creditor recalculates the average cost from February 1 through July 31 and then uses the recalculated average cost for transactions beginning on August 1, the creditor meets the requirements of § 1026.19(f)(3)(ii). ). ), even if, over time, the creditor has charged consumers more than it has paid suppliers.

6.Adjustments based on prospective analysis are allowed but not required.A lender can adjust average rates prospectively if it develops a statistically reliable and accurate method of doing so. Suppose a lender calculates average rates based on two time periods: winter (October 1 to March 31) and summer (April 1 to September 30). If the lender can demonstrate that the average cost of a particular billing service is always at least 15% more expensive during the winter term than in the summer term, the lender may increase the average rate for the next winter term by 15% on average. cost for the current summer term, provided, however, the creditor makes periodic retroactive adjustments as explained in Comment 19(f)(3)(ii)-5.

7.Rates that vary according to the amount of the loan or the value of the property.An average rate cannot be used for rates that vary by loan amount or property value. For example, an average rate cannot be used for a property transfer tax if the property transfer tax is calculated as a percentage of the loan amount or property value. Average charges also cannot be used for insurance premiums. For example, average charges cannot be used for home insurance or for the initial premium or guarantee for term insurance.

8.Prohibited by law.An average rate may not be used where prohibited by applicable state or local law. For example, a creditor may not charge an average fee for an expert opinion when applicable law prohibits creditors from charging more than the actual cost of the expert opinion.

9.Required documents.To comply with §1026.25, a creditor must retain all records used to calculate the average charge for a particular class of transaction for at least three years after each accounting for which that average charge was used. The documentation must support the components and calculation methods. For example, if a creditor calculates an average fee for a specific county registration fee simply by averaging all relevant fees paid in the previous month, the creditor only needs to retain receipts for each registration fee, a ledger showing which is not the one received The total amount exceeded the total amount paid over time, and a document detailing the calculation. However, if a creditor develops complex algorithms to determine average values, the creditor must maintain not only the underlying receipts and accounting records, but also documentation in sufficient detail for an auditor to verify the accuracy of the calculations.

19(f)(4) Transactions involving a seller.

19(f)(4)(i) Seller's disposition.

1.Application.Section 1026.19(f)(4)(i) requires the settlement agent to provide the seller with the disclosures required by §1026.38 in connection with the seller's transaction that reflect the actual terms of the seller's transaction. The settlement agent complies with this provision by providing the consumer with a copy of the closing disclosure if the closing disclosure also includes the information required by §1026.38 related to the seller's transaction, or alternatively the disclosures provided for in §1026.38(t) ( 5) (v) or (vi), as the case may be.

2.Simultaneous subordinated financing.For a concurrent purchase transaction for subordinated financing, the Settlement Agent shall comply with §1026.19(f)(4)(i) by providing to the seller only the initial security transaction information required by §1026.38 in connection with the transaction of the seller and the actual terms of the transaction will reflect the seller's transaction in accordance with Comment 19(f)(4)(i)-1 if the first warranty closing disclosure captures the seller's entire transaction. If the first pledge closing disclosure does not record the entirety of the seller's transaction, the Settlement Agent will comply with §1026.19(f)(4)(i) by providing the seller with both the first pledge and concurrent disclosure of the junior financing required. transaction pursuant to §1026.38 in connection with the seller's transaction and reflecting the actual terms of the seller's transaction under Comment 19(f)(4)(i)-1.

19(f)(4)(ii) Term.

1.Application.Section 1026.19(f)(4)(ii) provides that the Settlement Agent must make the disclosures required by Section 1026.19(f)(4)(i) prior to the Closing Date. If, during the 30-day period after consummation, an event related to the settlement of the transaction occurs that causes such disclosures to become inaccurate, and such inaccuracy results in a change in the amount actually paid by the seller from that specified in § 1026.19(f)(4)(i) the Settlement Agent will deliver or mail the amended disclosures no later than 30 days after receiving sufficient information to determine that such an event has occurred. Section 1026.19(f)(4)(i) requires the disclosure of items related to the seller's transaction. Therefore, the receiver need only redisclose if an item related to the seller's transaction becomes inaccurate and the inaccuracy results in a change in the amount actually paid by the seller. Assume a transaction in which the seller pays the transfer tax, the settlement occurs on Monday, and the security interest is recorded on Tuesday, the day after the settlement. If the Settlement Agency receives sufficient information on Tuesday to determine that the transfer taxes owed to the state differ from those disclosed pursuant to §1026.19(f)(4)(i), the Settlement Agency will comply with §1026.19(f). )(4 ). )( ii) proper verification of disclosures and delivery or mailing no later than 30 days after Tuesday. See comment 19(e)(4)(i)-1 for guidance on when sufficient information has been received to determine that an event has occurred. Also see comment 19(f)(2)(iii)-1.iii for another example where corrected information must be provided to the seller.

19(g) Special information booklet at the time of application.

19(g)(1) The lender must provide a special information booklet.

1.book Review.The Bureau may, from time to time, issue revised or alternate versions of the special information brochure dealing with transactions subject to Section 1026.19(g) by publishing a notice in the Federal Register. The Governing Board may also allow creditors to use forms or brochures from other federal agencies. In such case, a notice in the Federal Register will indicate the availability of alternative prospectus or materials for such transactions. The current version of the brochure can be found on the Office website,www.consumerfinance.gov/learnmore.

2.Multiple applicants.If two or more people apply for a loan together, the lender complies with §1026.19(g) if it provides a copy of the prospectus to one of the applicants.

3.consumer app.Pursuant to Section 1026.19(g)(1)(i), the creditor must deliver or mail the special information booklet no later than three business days after receiving the consumer's order. “Request” is defined in §1026.2(a)(3)(ii). The lender need not provide the booklet pursuant to §1026.19(g)(1)(i) if it rejects an order or the consumer accepts the order before the three business day period pursuant to §1026.19(e)(1) (iii). ) withdraws)(A). See comment 19(e)(1)(iii)-3 for additional guidance on denied or withdrawn applications.

19(g)(2) Changes Permitted.

1.Reproduction.The special information booklet may be reproduced in any form as long as no modifications are made, except as provided in §1026.19(g)(2).See alsoComment 19(g)(2)-3. Provision of the special information pamphlet as part of a larger document does not satisfy the requirements of §1026.19(g). Any colour, size and quality of paper, any type of printing and any reproduction method can be used as long as the booklet is legible.

2.Other changes are allowed.The special information brochure can be translated into languages ​​other than English. Changes to the prospectus not specified in §1026.19(g)(2)(i) through (iv) and comment 19(g)(2)-3 do not comply with §1026.19(g).

3.Title changes allowed for brochures used before October 3, 2015.Section 1026.19(g)(2)(iv) provides that the title that appears on the cover of the brochure cannot be changed. Comment 19(g)(1)-1 states that the Office may, from time to time, publish revised or alternate versions of the special information brochure on transactions subject to §1026.19(g) by publishing a notice in the Register Federal. Until the Bureau issues a version of the special information booklet on credit estimates and financial statement disclosures pursuant to Sections 1026.37 and 1026.38, for applications received on or after October 3, 2015, a lender may change the title that appears on the cover of the version. of the Special Information Sheet in force before October 3, 2015, provided that the word "liquidation expenses" is used in the title. See comment 1(d)(5)-1 for guidance on compliance with §1026.19(g) for applications received on or after October 3, 2015.