In some cases, a Loan Estimate must be provided under 1026.19(e) before provision of the Closing Disclosure. If the creditor permits the consumer to shop consistent with 1026.19(e)(1)(vi)(A) but fails to provide the written list required under 1026.19(e)(1)(vi)(C), good faith is determined under 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 which case good faith is determined under 1026.19(e)(3)(i). Or the creditor may choose to factor in the excess amount collected to decrease the average charge for an upcoming period. If applicable, the creditor should also disclose that the rate and payment will be rounded. 2. Mortgage Rate Lock: An agreement between a borrower and a lender that allows the borrower to lock in the interest rate on a mortgage over a specified time period at the prevailing market interest . Creditors and settlement agents may agree to divide responsibility with respect to completing any of the disclosures under 1026.38 for the disclosures provided under 1026.19(f)(1)(i). Origination However, for purposes of determining whether an estimate is provided in good faith under 1026.19(e)(1)(i), a creditor is presumed to have collected these six pieces of information. Frequency of adjustments. The original estimated charge, or lack of an estimated charge for a particular service, complies with 1026.19(e)(3)(iii) if it is made based on the best information reasonably available to the creditor at the time that the estimate was provided. Requirements. 1. A creditor may find that, even though it developed an average-cost pricing program in accordance with the requirements of 1026.19(f)(3)(ii), over time it has collected more from consumers than it has paid to settlement service providers. You are allowed to provide a revised loan estimate at any time. See below for illustrative examples: i. 5. 15. ii. For example, if an application is received on Monday, the creditor satisfies this requirement by either hand delivering the disclosures on or before Thursday, or placing them in the mail on or before Thursday, assuming each weekday is a business day. See comments 17(c)(2)(i)-1 and 19(e)(1)(i)-1. For example, if the creditor emails the disclosures at 1 p.m. on Tuesday, the consumer emails the creditor with an acknowledgement of receipt of the disclosures at 5 p.m. on the same day, the creditor could demonstrate that the disclosures were received on the same day. A consumer may modify or waive the right to the seven-business-day waiting period required by 1026.19(e)(1)(iii) only after the creditor makes the disclosures required by 1026.19(e)(1)(i). If many of the disclosures are estimates, the creditor may include a statement to that effect (such as all numerical disclosures except the late-payment disclosure are estimates) instead of separately labeling each estimate. At any time prior to delivery of the disclosures required under 1026.19(e)(1)(i), a creditor or other person may impose a credit report fee in connection with the consumer's application for a mortgage loan that is subject to 1026.19(e)(1)(i) as provided in 1026.19(e)(2)(i)(B). Requirements for loan product disclosures are set forth in 1026.38(a)(5)(iii) and 1026.37(a)(10). See comment 19(e)(3)(iv)(A)-1.ii for an example in which the creditor issues revised disclosures even though the sum of all costs subject to the 10 percent tolerance category has not increased by more than 10 percent. iv. In covered transactions, 1026.19(e)(1)(i) requires the creditor to provide the consumer with good faith estimates of the disclosures in 1026.37. Bona fide charges. In cases where interest rate changes are at the creditor's discretion (see the commentary to 1026.19(b)(2)(ii)), the creditor must provide a history of the rates imposed for the preceding 15 years, beginning with the rates in 1977. Section 1026.19(f)(1)(iii) provides that, if any disclosures required under 1026.19(f)(1)(i) are not provided to the consumer in person, the consumer is considered to have received the disclosures three business days after they are delivered or placed in the mail. However, the additional costs amount to only a five percent increase over the sum of all fees included in the category of fees which may not increase by more than 10 percent. The average rate on a 15-year mortgage was 5.98%, while 30 . One applicant's income was $30,000, while the other applicant's income was $50,000. 2. Fees restricted. Term of the loan. See comment 19(e)(1)(iii)-3 for additional guidance on denied or withdrawn applications. 4. An average charge may not be used for any charge that varies according to the loan amount or property value. For example: i. In contrast, a creditor does not permit a consumer to shop for purposes of 1026.19(e)(1)(vi) if the creditor requires the consumer to choose a provider from a list provided by the creditor. Amortization Schedule. Multiple loan programs. Timing of fees. iv. The disclosures under 1026.19(b)(1) and 1026.19(b)(2)(v), (viii), (ix), and (xii) are not applicable to such loans. An application is received when it reaches the creditor in any of the ways applications are normally transmitted - by mail, hand delivery, or through an intermediary agent or broker. If a historical example is provided under 1026.19(b)(2)(viii)(A), the terms to maturity or payment amortization used in the historical example must be used in calculating the initial and maximum payment. Points are listed on your Loan Estimate and on your Closing Disclosure on page 2, Section A. It's not uncommon for some closing costs to change somewhat, but there are legal rules about what can change and by how much. Instead, the creditor may follow the rules set out in comment 19(b)(2)(viii)(A)-5. On Wednesday, June 17, a change to the annual percentage rate occurs: i. Assume consummation occurs on a Monday and the security instrument is recorded on Tuesday, the day after consummation. In other cases, the notice set forth in 1026.19(a)(4) may be disclosed together with or separately from the disclosures required under 1026.18. This is true even if an individual charge was omitted from the estimate provided under 1026.19(e)(1)(i) and then imposed at consummation. A creditor may also provide a separate disclosure required by 1026.19(e)(1)(i) for the permanent phase before receiving an application for permanent financing at any time not later than the seventh business day before consummation. The creditor then chooses to send a different appraiser for a second opinion, but the second appraiser returns a similar report. A third party submits a consumer's written application to a creditor and both the creditor and third party do not collect any fee, other than a fee for obtaining a consumer's credit history, until the consumer receives the early mortgage loan disclosure from the creditor. 1. ii. The following examples illustrate these requirements: i. Mortgage interest rates can change daily, sometimes hourly. See also comment 19(e)(3)(iv)(A)-2 regarding the definition of a changed circumstance. Timing. 1026.21 Treatment of credit balances. In these transactions, the creditor must disclose the event that would allow the creditor to increase the rate such as that the rate may increase if the employee leaves the creditor's employ. 1026.43 Minimum standards for transactions secured by a dwelling. The creditor is not required to make additional corrected disclosures or wait an additional three business days under 1026.19(a)(2). For example, if a creditor calculates an average charge for a particular county recording fee by simply averaging all of the relevant fees paid in the prior month, the creditor need only retain the receipts for the individual recording fees, a ledger demonstrating that the total amount received did not exceed the total amount paid over time, and a document detailing the calculation. Pursuant to 1026.19(f)(2)(ii), if, at the time of consummation, the annual percentage rate becomes inaccurate, the loan product changes, or a prepayment penalty is added to the transaction, the creditor must provide corrected disclosures with all changed terms so that the consumer receives them not later than the third business day before consummation. If an initial discount is not taken into account in applying overall or periodic rate limitations, that fact must be disclosed. Similarly, a creditor or other person does not comply with the requirements of 1026.19(e)(2)(i) if the creditor or other person requires the consumer to provide a credit card number before the consumer receives the disclosures required by 1026.19(e)(1)(i), even if the creditor or other person had promised not to charge the consumer's credit card for the $500 processing fee until after the disclosures required by 1026.19(e)(1)(i) are received by the consumer and waited until after the consumer subsequently indicated an intent to proceed. Six pieces of information presumed collected, but not required. Mail delivery. Assume the same facts as in comment 19(e)(1)(iii)-5.ii, under which the creditor provides the disclosures required by 1026.19(e)(1)(i) for both construction financing and permanent financing. Timeshare transactions covered by 1026.19(f)(1)(ii)(B) may be consummated at the time or any time after the disclosures required by 1026.19(f)(1)(i) are received by the consumer. See comment 19(f)(1)(iii)-1. ), 4. The creditor need not disclose each periodic or overall rate limitation that is currently available. The current interest rate is the interest rate that applies on the date of the disclosure. The creditor is not required to delay consummation to provide corrected disclosures under 1026.19(f)(2)(ii) because the annual percentage rate is accurate pursuant to 1026.22, but the creditor is required under 1026.19(f)(2)(i) to provide corrected disclosures, including any other changed terms, so that the consumer receives them on or before Thursday, June 11. The term affiliate, as used in 1026.19(e), has the same meaning as in 1026.32(b)(5). Modification or waiver. This provision requires an explanation of how the creditor will determine the consumer's interest rate and payment. For example, assume that at consummation the consumer must pay four itemized charges that are subject to the good faith determination under 1026.19(e)(3)(i). Written application. The rules relating to changes in the index value, interest rate, payments, and loan balance. The reasonably available standard requires that the creditor, acting in good faith, exercise due diligence in obtaining information. The creditor may provide the construction financing Closing Disclosure at least three business days before consummation of that transaction on July 1 and delay providing the permanent financing Closing Disclosure until three business days before consummation of that transaction on or about June 1 of the following year, in accordance with 1026.19(f)(1)(ii). 06/30/2019. Best information reasonably available. Assume a creditor provides the disclosure under 1026.19(f)(1)(ii)(A) for a transaction in which the title insurance company that is providing the title insurance policies is acting as the settlement agent in connection with the transaction, but the creditor does not request the actual cost of the lender's title insurance policy that the consumer is purchasing from the title insurance company and instead discloses an estimate based on information from a different transaction. The requirements of 1026.19(e)(1)(vi)(B) and (C) do not apply if the creditor does not permit the consumer to shop consistent with 1026.19(e)(1)(vi)(A). The settlement agent may assume the responsibility to complete some or all of the disclosures required by 1026.19(f). Intermediary agent or broker. To illustrate: i. 1026.40 Requirements for home equity plans. iii. Pursuant to this section, the creditor must provide a history of index values for the preceding 15 years. i. Origination Charges Section B. The greater the percentage of total loan applications submitted by the broker in any given period of time, the less likely it is that the broker would be considered an intermediary agent or broker of the creditor during the next period. On Thursday, June 11, the annual percentage rate will be 7.25%, which exceeds the most recently disclosed annual percentage rate by less than the applicable tolerance. (See the commentary to 1026.17(c)(2).) Assume further that ten days after consummation the municipality in which the property is located raises property tax rates effective after the date on which settlement concludes. The creditor must provide revised disclosures by Thursday to comply with 1026.19(e)(4)(i). See comment 17(c)(2)(i)-2 for guidance on labeling estimates. For purposes of 1026.19(f)(1)(ii), the term business day means all calendar days except Sundays and legal public holidays referred to in 1026.2(a)(6). The creditor is not required to provide the disclosures required under 1026.19(f)(1)(i) if, before the time the creditor is required to provide the disclosures under 1026.19(f), the creditor determines the consumer's application will not or cannot be approved on the terms requested, or the consumer has withdrawn the application, and, as such, the transaction will not be consummated. For example, a creditor may define a four-month period from January 1 to April 30 and begin using the average charge from that period on May 15, provided the average charge is used until September 15, at which time the average charge for the period from May 1 to August 31 becomes effective. The Consumer Handbook need not be given for variable-rate transactions subject to this section in which the underlying interest rate is fixed. For construction - permanent transactions disclosed as one transaction, the creditor complies with 1026.19(e)(1)(iii) by delivering or placing in the mail one combined disclosure required by 1026.19(e)(1)(i) not later than the third business day after the creditor receives an application and not later than the seventh business day before consummation. See comment 2(a)(6)-2. Finally, in any assumption of a variable-rate transaction secured by the consumer's principal dwelling with a term greater than one year, disclosures need not be provided under 1026.18(f)(2)(ii) or 1026.19(b). The following examples illustrate the application of this provision: i. Requirement. The disclosures required by this section need only be made as applicable. B. As an alternative, the creditor may disclose the range of the lowest and highest periodic and overall rate limitations that may be applicable to the creditor's ARM transactions. C. The amount of work (such as document preparation) the creditor expects to be done by the broker on an application based on the creditor's prior dealings with the broker and on the creditor's requirements for accepting applications, taking into consideration the customary practice of brokers in a particular area. For example, if the consumer informs the creditor that the consumer will obtain a type of inspection not required by the creditor, the creditor must include the charge for that item in the disclosures provided under 1026.19(e)(1)(i), but the actual amount of the inspection fee need not be compared to the original estimate for the inspection fee to perform the good faith analysis required by 1026.19(e)(3)(iii). The creditor then charges $135 per transaction for 100 transactions from January 1 through April 30, but the actual average cost to the creditor of pest inspections during this period is $115. In contrast, a creditor or other person complies with 1026.19(e)(2)(i) if the creditor or other person requires the consumer to provide a credit card number before the consumer receives the disclosures required by 1026.19(e)(1)(i) and subsequently indicates an intent to proceed, provided that the consumer's authorization is only to pay for the cost of a credit report and the creditor or other person only charges a reasonable and bona fide fee for obtaining the consumer's credit report. 7. Similarly, the amount disclosed for property taxes must be based on the best information reasonably available to the creditor at the time the disclosure was provided. Whatever method is used, a creditor need not confirm that the consumer has read the disclosures. To ensure timely and accurate compliance with the requirements of 1026.19(f)(1)(v), the creditor and settlement agent need to communicate effectively. In such cases, the creditor may assume for purposes of the historical example that the first adjustment occurred at the end of the first full year in which the adjustment could occur. If on Monday, June 1, the consumer executes a waiver of the seven-business-day waiting period, the final disclosures required by 1026.19(f)(1)(i) could then be delivered three business days before consummation, as required by 1026.19(f)(1)(ii), on Tuesday, June 2, and the loan could be consummated on Friday, June 5. Preferred-rate loans. In some variable-rate transactions, creditors may set an initial interest rate that is not determined by the index or formula used to make later interest rate adjustments. If a Rate Lock Extension Fee was incorrectly disclosed on a revised CD as Origination Points, can this be corrected with another revised CD before closing, or corrected on the final consummation CD? Lender credits, as identified in 1026.37(g)(6)(ii), represents the sum of non-specific lender credits and specific lender credits. For purposes of 1026.19(e), a fee is imposed by a person if the person requires a consumer to provide a method for payment, even if the payment is not made at that time. For good faith to be determined under 1026.19(e)(3)(ii) a creditor must permit a consumer to shop consistent with 1026.19(e)(1)(vi)(A). See comment 19(f)(1)(v)-3 below for additional guidance regarding the creditor's responsibilities where the settlement agent provides disclosures. 1. Change in interest rate, payment, or term. For example, if a consumer provides the creditor with an application, as defined by 1026.2(a)(3), for a mortgage loan secured by a timeshare on Monday, June 1, and consummation of the timeshare transaction is scheduled for Friday, June 5, the creditor complies with 1026.19(f)(1)(ii)(B) by ensuring that the consumer receives the disclosures required by 1026.19(f)(1)(i) no later than consummation on Friday, June 5. If, however, the consumer amends the application because of the creditor's unwillingness to approve it on its original terms, no violation occurs for not providing disclosures based on the original terms. 2. The creditor must also disclose the rules relating to the conversion feature, such as the period during which the loan may be converted, that fees may be charged at conversion, and how the fixed rate will be determined. Settlement of the transaction concludes five days after consummation, and the actual recording fees are $70.

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