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#2003243 - 03/23/15 02:16 PM Calculating the TIP
Rdy2Retire Offline
100 Club
Joined: Dec 2004
Posts: 117
GA Mountains

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TRID - TILA/RESPA Integrated Disclosures Rule
#2003250 - 03/23/15 02:20 PM Re: Calculating the TIP Rdy2Retire
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 78,958
Galveston, TX
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2003256 - 03/23/15 02:24 PM Re: Calculating the TIP Rdy2Retire
Rdy2Retire Offline
100 Club
Joined: Dec 2004
Posts: 117
GA Mountains
Thank you ricarey! I thought I had finally gone over the edge!

Held my first training session via conference call last week with approximately 350 lenders. Just feeding them a little at a time so they are not overwhelmed with the changes. We covered an overview of the changes and a simple fixed rate Loan Estimate. As I am preparing for my next session, which will be to cover the Closing Disclosure that corresponds to the Loan Estimate, I have one comment and one question. I am using the CFPB prepared disclosures for my examples. (H-24(D) Mortgage Loan Transaction Loan Estimate – Refinance Sample for 150,000 and H-25(E) Mortgage Loan Transaction Closing Disclosure – Refinance Transaction Sample for $150,000.)

Comment – So we are required to disclose the TIP of 77.28% in the case of the LE, but there is no way to calculate the percentage with the information in the document. Now that makes a whole lot of sense…

Question – The CD shows a loan amount of $150,000; Finance Charge of $121,029.00 and TIP of 77.29%. I realize the FC includes more than just the interest, but can’t for the life of me come up with a TIP of 77.29%. Has anyone else tried to figure this out? Interest should be $115,935, but I can’t come up with this figure by subtracting any combination of fees that I thought they might consider to be prepaid finance charges.

I want/need to show my lenders how to calculate the TIP.

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#2003261 - 03/23/15 02:36 PM Re: Calculating the TIP Rdy2Retire
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 78,958
Galveston, TX
I haven't spent a lot of time on them, but if they are anything like the open-credit module forms, they show the format of the disclosures but the numbers they plugged in are actually nonsensical. Maybe it is the same with these??
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#2003265 - 03/23/15 02:39 PM Re: Calculating the TIP Rdy2Retire
Rdy2Retire Offline
100 Club
Joined: Dec 2004
Posts: 117
GA Mountains
Thanks Randy. As I just tell my folks, "Your Government" and then they understand...

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#2017795 - 06/02/15 09:09 PM Re: Calculating the TIP Rdy2Retire
elcinoca Offline
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Joined: Jan 2002
Posts: 537
Elizabeth City, NC
Ready2, this is how I got it to work:

$737.91 x 360 = $265,647.60 (P&I)
$265,647.60 - $150,000 (P) = $115,647.60 (interest paid LOL)
$115,647.60 + $283.36 (prepaid interest) = $115,930.96 Total Interest

$115,930.96 / $150,000 = 77.287 or 77.29 rounded.

MarkB

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