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July 29
W-9, W-8BEN and W-8 BENE: IRS issues new forms and new rules;
Deborah Crawford

July 31
ACH Security Framework Rule - Small Rule, Big Implications;
Rayleen Pirnie

August 6
Part I
Flood Insurance: Requirements and Best Practices
A Two-Part Companion Webinar Series;
David Dickinson and Jerod Moyer

August 12
A to Z of Reg E;
Andy Zavoina

August 13
Part II
Flood Insurance: Requirements and Best Practices
A Two-Part Companion Webinar Series;
David Dickinson and Jerod Moyer



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#1380570 - 04/23/10 01:03 PM Itemization of Amount Financed - TIL
jme3 Offline
Member

Registered: 07/01/08
Posts: 67
Loc: Illinois
In a recent audit we reviewed several loan files (prior to 1/1/2010 RESPA requirements)comparing the itemization of amount financed to the HUD settlement statement. In our opinion these two disclosures should balance with the same figures and amounts. In reviewing the commentary in 226.18 it gives lenders flexibility for what they want to list and how on the itemization of amount financed. Ex. our loan department had listed fees that are paid p.o.c on the HUD on the itmeization of amount fiannced, and with escrow that is on the HUD, not include it on the itemization of amount financed. Also miscellaneous other fees that did not match the amounts on the HUD or fees not included. Does anyone else review the itemization of amount financed as being flexible on what is listed?, or in our opinoin, would it be best if they matched exactly fee per fee for what is actually being paid at settlemnt by the borrower for the loan?

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Lending Compliance
#1380847 - 04/23/10 03:23 PM Re: Itemization of Amount Financed - TIL [Re: jme3]
swiggles Offline
Power Poster

Registered: 08/14/01
Posts: 5722
I think they MUST match. Otherwise, the TIL itemization would be misleading. Disclosures must be accurate. There is no need to provide an itemization if you are providing a Settlement Statement. Our software automatically includes the itemization along with the Fed Box disclosure and so we have to provide it, but the only settlement charges that we show are the charges that are prepaid finance charges that affect the APR. We used to disclose filing fees as well, but we had the same problem as you are describing. The filing fees disclosed rarely matched the actual fees charged at closing shown on the Settlement Statement.
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#1380871 - 04/23/10 03:31 PM Re: Itemization of Amount Financed - TIL [Re: swiggles]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 49447
Loc: Galveston, TX
I think that banks that use both (other than for internal purposes) are just asking for trouble. The HUD-1 satisfies the itemization of amount financed dislcosure under Reg Z - leave it at that.

RESPA transactions. The Real Estate Settlement Procedures Act (RESPA) requires creditors to provide a good faith estimate of closing costs and a settlement statement listing the amounts paid by the consumer. Transactions subject to RESPA are exempt from the requirements of 226.18(c) if the creditor complies with RESPA's requirements for a good faith estimate and settlement statement.
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The opinions expressed are my own, take them or leave them.

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#1380880 - 04/23/10 03:38 PM Re: Itemization of Amount Financed - TIL [Re: rlcarey]
swiggles Offline
Power Poster

Registered: 08/14/01
Posts: 5722
Our Mortgage Center software utilizes a separate itemization which they do not provide to the customer but do include in the file for review. The purpose of that is so that an audit can determine if the proper fees were included as PPFCs.
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The more you sweat in training, the less you bleed in battle.......

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#1380910 - 04/23/10 03:52 PM Re: Itemization of Amount Financed - TIL [Re: swiggles]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 49447
Loc: Galveston, TX
That is a good idea (internal purposes only) - however I have seen a lot of banks that deliver IofAFs and HUD-1s that don't match and in this day and age of unfair and deceptive practice litigation, it's like handing a loaded gun to someone by the barrel.
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The opinions expressed are my own, take them or leave them.

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#1380944 - 04/23/10 04:05 PM Re: Itemization of Amount Financed - TIL [Re: rlcarey]
swiggles Offline
Power Poster

Registered: 08/14/01
Posts: 5722
Ha....I like that analogy!!

You're a Texas banker. Something similar popped into my head when I stumbled across a very large loan, the purpose of which was to gut (not raze) and reconstruct the interior of a house that burned. The loan was done as a construction loan and a right to cancel was not provided.
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The more you sweat in training, the less you bleed in battle.......

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#1719538 - 07/12/12 03:12 PM Re: Itemization of Amount Financed - TIL [Re: jme3]
KPOC Offline
Gold Star

Registered: 07/09/12
Posts: 460
Loc: Greater Boston Area
We're having the same problem. The itemization printed with the final TIL shows the amounts from the GFE, not the HUD-1. I've verified that the prepaid FC is always correct, but the Other Settlement Charges are almost always off. They don't affect the APR or amount financed, but they a different from the HUD-1. Massachusetts oversees our TILA, not Regulation Z, and it requires this itemization, while, unlike Regulation Z, is silent on whether a GFE or HUD-1 satisfies the requirement. Any suggestions?

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