Good Morning, I went to the Federal Reserve's regs and clicked on Reg Z and then Appendix D. However, I do not see Part II (used when the creditor chooses to disclose the construction and permanent financing as one transaction). Can you help? Thank you.

You can find it here.

Stick with separate disclosures for CST and perm phases--the risk is lower.

Really? I thought we should move to combine them because:

1. There is less chance of a mistake with one than two; and 2. The 1/4 tolerance would apply for the combined, whereas the 1/8 rule applies to the perm portion when provided separately.

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1. There is less chance of a mistake with one than two....

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That's not been my experience--divide and conquer!

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2. The 1/4 tolerance would apply for the combined, whereas the 1/8 rule applies to the perm portion when provided separately.

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Are you saying you don't have any confidence in your methods and software for run-of-the-mill mortgage disclosures? Why should you need any tolerance at all for a perm? Most disclosure problems stem from the construction phase.

I agree with Richard – disclose them separately. I am a bank examiner and have found problems with at least a couple of the TILs every time I am in a bank that discloses the construction/perm together. I find no where near the number of problems when they are disclosed separately.

Are you saying you don't have any confidence in your methods and software for run-of-the-mill mortgage disclosures?

Yes, the company has a highly sophisticated system and it seems that no one seems understands both compliance and all the computer lingo required to decipher the issue(s).

Why should you need any tolerance at all for a perm? Most disclosure problems stem from the construction phase.

Agreed, but we are atypical in the banking/mortgage world.