President & Managing Director
Lenders Compliance Group
This is the fifth article of a six-part
series devoted to TILA-RESPA Integration Disclosure. Although the series,
structured as White Papers, was initially established with four parts, I have
added a fifth Part and a sixth part to discuss additional features of the
Closing Disclosure. In this fifth part, I will discuss Page Three. The
sixth and final part of the series will provide an outline of Page Four and
Page Five. Through a review of important highlights, I invite you to join me in
a deep dive into the intricate features of the Closing Disclosure.
In the first article, I discussed
the mission of TILA-RESPA Integration and the Loan Estimate (LE).[i]
The second article introduced and treated the numerous features of the Closing
Disclosure (CD).[ii]
These two articles (viz., on the Loan
Estimate and Closing Disclosure, respectively) were accompanied by separate,
detailed tables to be used for certain itemized categories and action
requirements. In the third article, I provided the salient features of the Loan
Estimate, in considerable detail.[iii]
In the fourth article, I took you through Page One and Page Two of the Closing
Disclosure.[iv]
I would suggest that you read all
the articles in this series in order to better understand the TILA-RESPA
Integration Disclosure (TRID) rule promulgated by the Consumer Financial
Protection Bureau (“CFPB” or “Bureau”).
The series on TILA-RESPA is meant
to be informative, though it is not intended to be comprehensive. It is always
prudent to research areas of particular interest with respect to the regulatory
mandates. If assistance is needed, Lenders Compliance Group is a resource, and
we recently established two proactive paths toward a TRID knowledgebase:
(1) We
established the TEAM TRID™ task force,[v]
a relatively inexpensive, cost-effective way to get TRID integration
implementation done efficiently (viz., www.teamtrid.com); and importantly
(2) We
established TRIDHotline.com,[vi]
an entirely free online service,
manned by our task force, to assist people with their questions about TRID. We
want to listen to their compliance needs (viz., www.tridhotline.com).
Please consider my analysis
carefully. Follow along with a copy of the Closing Disclosure. I will provide,
where helpful, some information as Suggested
Guidance. Allow several hours to consider this explication. And
as I have admonished all along, make notes, raise questions, and seek answers
from competent compliance professionals!
Hopefully, you will have read the
previous four articles. Now we will continue a detailed review of the third
page of the Closing Disclosure. As indicated above, a forthcoming sixth article
will further elucidate the Closing Disclosure analyses for Page Four and Page
Five.
Page Three
TILA requires the Closing
Disclosure to contain two tables:[vii]
“Calculating Cash to Close” and “Summaries of Transactions.”[viii]
For transactions without a seller, the creditor or settlement agent may
substitute a “Payoffs and Payments” table for the Summary of Transactions table
and place it before the alternative Calculating Cash to Close table.[ix]
Calculating Cash to Close Table
General Description
TILA requires the creditor to
disclose the “cash to close;” that is, the total amount of cash or other funds
the consumer must provide at consummation, and how the creditor determines that
amount. The “Calculating Cash to Close” table generally mirrors the format of,
and updates the amounts shown on, the “Calculating Cash to Close” table in the
Loan Estimate. The purpose of this table is to provide the consumer with a
three-business-day window before closing to make arrangements to have the
necessary funds available for the consummation of the transaction.
The table on the CD includes a
row not included on the Loan Estimate, labeled “Closing Costs Paid Before
Closing,” and additional information under the column with the subheading “Did
this change?”[x]
Standard Calculating Cash to Close Table
The standard “Calculating Cash to
Close” table consists of four columns and nine rows. The columns are for the
(1) components of cash to close, (2) the estimated amounts of cash to close
(from the Loan Estimate) and its components, (3) the cash to close and its
components without rounding (Final), and (4) a “Did this change” (Yes or No).
