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#2144678 - 09/01/17 05:29 PM Prepaid Interest included in first payment LE
Bec Offline
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Bec
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The Great White North
12 month, interest-only, fixed rate bridge note. The prepaid interest is being calculated as being paid in the first payment by our LOS. Is this accurate. We have had a problem with LOS goblins and for some reason this just doesn't look right to me so I want to make sure that the prepaids should default to paid in the first payment.
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TRID - TILA/RESPA Integrated Disclosures Rule
#2144684 - 09/01/17 05:35 PM Re: Prepaid Interest included in first payment LE Bec
rlcarey Offline
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rlcarey
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Galveston, TX
If you are not collecting odd-days interest, all accrued interest will be due in the first payment.
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#2144708 - 09/01/17 06:58 PM Re: Prepaid Interest included in first payment LE Bec
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Would you ever disclose fees paid in cash on an LE payment calculation?
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#2144710 - 09/01/17 07:06 PM Re: Prepaid Interest included in first payment LE Bec
rlcarey Offline
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rlcarey
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Galveston, TX
Not sure what you mean? - odd-days interest is required to be estimated in closing costs in Section F. Or have you switched subjects?
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#2144723 - 09/01/17 08:23 PM Re: Prepaid Interest included in first payment LE Bec
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I am not sure I know what I mean either. I am flummoxed.
We are trying to disclose a one year, interest only bridge loan and our first payment is showing as a monthly payment with the prepaid interest added on and that is it. Is that how it is suppose to disclose and the borrower is to be told that the payment won't be that high for the rest of the term because there will be no prepaids? Or do we have a setting wrong?

Loan information
Loan Term:1 Year
Purpose: Purchase
Product: 11 Mo. Interest Only, Fixed Rate
Loan Type Conventional

Loan Amount: $195,000
Interest rate: 4.75%
Monthly Principal & Interest: $1,091.19

Projected payments: Year 1: $1,091.19 [/i]only interest[i]
Final Payment $195,786.67

This is on the CD. The loan is set to close on the September 7th. Disburse on September 12th. First Payment date. October 25, 2017
Last edited by Bec; 09/01/17 08:28 PM.
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#2144736 - 09/01/17 09:25 PM Re: Prepaid Interest included in first payment LE Bec
rlcarey Offline
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rlcarey
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Galveston, TX
So you are concerned that the remainder of the payments after the first one for $1,019.19 will be less and is not disclosed in a range in the projected payments table?

I believe you can ignore disclosing the range in the projected payments table based on the following Since the first payment period is longer by only 13 days:


1026.17(c)(4) In making calculations and disclosures, the creditor may disregard any irregularity in the first period that falls within the limits described below and any payment schedule irregularity that results from the irregular first period:

(ii) For transactions in which the term is at least 1 year and less than 10 years, a first period not more than 11 days shorter or 21 days longer than a regular period; and
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#2144739 - 09/01/17 09:44 PM Re: Prepaid Interest included in first payment LE Bec
Bec Offline
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Bec
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Yes, that was my concern for sure. Thank you for the citation. I appear to need a bit of revisting of regulation z. I was appeased somewhat by an amortization schedule and the note matching up with the first payment and subsequent lower payments. But this puts the icing on the cake. I really can't thank you enough smile
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