Construction Only Loan Product & Pmt Change

I had a bomb laid in my lap late Wednesday afternoon so I'm scrambling to get some things worked out for our construction loans. I am currently in a semi-dispute so I would like a few opinions. I know my opinion, I just need a couple of others.

For reference you can look at .37(a)(10) & (b)(6).

9 month interest only fixed rate construction only loan. Interest payments are based on the current outstanding balance.

Should the product be disclosed as:

8 mo. interest only, fixed rate

or

9 mo. interest only, fixed rate


Should the answer to "Can this amount increase after closing?" for the Monthly Principal & Interest payment in the Loan Terms section be answered Yes or No?

I am currently reviewing a Loan Estimate for a similar loan and have the same question and would appreciate any assistance anyone can provide.

FWIW my opinion is 8 mo. interest only, fixed rate and Yes.

May I ask why you feel that the product should be disclosed as 8 months if the loan has a term of 9 months?

I read the regulation to state - (iv) The disclosures required by paragraphs (a)(10)(i)(A) and (B), and (a)(10)(ii)(A), (B), (C), and (D) of this section must each be preceded by the duration of any introductory rate or payment period, and the first adjustment period, as applicable.

I am confused because the interest rate is fixed for the entire term.

One other question - Do you feel the AP Table is required for these types of loans?

The disclosures required by paragraphs (a)(10)(i)(A) and (B), and (a)(10)(ii)(A), (B), (C), and (D) of this section must each be preceded by the duration of any introductory rate or payment period, and the first adjustment period, as applicable.

My opinion is based on the above. In my example there are 8 interest only payments and 1 P&I payment. The interest payments are based on the outstanding balance therefore depending on advances made the interest payment can increase.

If the payments can increase I do believe AP table would be required.

I have one major software company disclosing 8 mo. interest only, fixed rate and Yes. But I have another major software company disclosing 9 mo. interest only, fixed rate and No.

Our software company is disclosing 9 mo. interest only, fixed rate and No. Also, no AP table.

Thank you! I sent these questions to the legal counsel at one of our software vendors. I will forward his response when I receive it.

I ran a test on a 6 month loan, not a 9, but ours says 5mo. interest only, fixed rate, and No. No AP table, either.

However - the interest payment is calculating as if fully disbursed because we enter the entire principal line amount as a disbursement 'held available for draw.' It's the only way to end up with either $0 or whatever closing fees are being paid in cash in the 'due to/from borrower' line. If I leave out the disbursement, it shows the whole of the line amount as cash to borrower.

Without specific guidance from the rules regulators that wrote this its nearly impossible to understand what they are requiring, especially since there is no H-form illustrated for a "construction-interest only" loan that carries a fixed rate.

.37(b)(6) Does not appear to fit the circumstances as it seems it relates to changes in interest rate.
.37 (i) Does appear to apply as it refers to changes not due to interest rate? I do remember reading that the "balloon payment" would be shown (P& I) as the final payment on the AP Table.

Prior TRID-Construction Only loans were shown with highest interest payment based upon the full commitment. They were
12 months construction only loans and disclosed based upon App. D. (11 interest only payments + 1 balloon payment due of P&I.

My answer would be Yes, Yes and Yes. Yes to AP table.

Becca: Is that result using LP?

Dan: Its a little of a worry when the guy I love to quote is not having a good feeling about this! Thanks for all your replies on BOL

Best of Luck to all with TRID!

Yes, and I stand corrected - it's using the 50% rule. So I *think* it should be saying Yes to payment increase and showing the AP table.

Dang.

These are also balloon loans and not interest only loans. Refer to the commentary in Appendix D that overrides the general guidelines.

The following is what Randy is referring to.

7. Relation to §§ 1026.37 and 1026.38. A creditor must disclose a projected payments table for certain transactions secured by real property, pursuant to §§ 1026.37(c) and 1026.38(c), instead of the general payment schedule required by § 1026.18(g) or the interest rate and payments summary table required by § 1026.18(s). Accordingly, some home construction loans that are secured by real property are subject to §§ 1026.37(c) and 1026.38(c) and not § 1026.18(g). See comment app. D-6 for a discussion of transactions that are subject to § 1026.18(s). Under § 1026.17(c)(6)(ii), when a multiple-advance construction loan may be permanently financed by the same creditor, the construction phase and the permanent phase may be treated as either one transaction or more than one transaction. Following are illustrations of the application of appendix D to transactions subject to §§ 1026.37(c) and 1026.38(c), under each of these two alternatives:

i. If a creditor uses appendix D and elects pursuant to § 1026.17(c)(6)(ii) to disclose the construction and permanent phases as separate transactions, the construction phase must be disclosed according to the rules in §§ 1026.37(c) and 1026.38(c). Under §§ 1026.37(c) and 1026.38(c), the creditor must disclose the periodic payments during the construction phase in a projected payments table. The provision in appendix D, part I.A.3, which allows the creditor to omit the number and amounts of any interest payments “in disclosing the payment schedule under § 1026.18(g)” does not apply because the transaction is governed by §§ 1026.37(c) and 1026.38(c) rather than § 1026.18(g). The creditor determines the amount of the interest-only payment to be made during the construction phase using the assumption in appendix D, part I.A.1. Also, because the construction phase is being disclosed as a separate transaction and its terms do not repay all principal, the creditor must disclose the construction phase transaction as a product with a balloon payment feature, pursuant to §§ 1026.37(a)(10)(ii)(D) and 1026.38(a)(5)(iii), in addition to reflecting the balloon payment in the projected payments table.

Dan, the above is what I was talking about at some point during this conundrum. Does it change your opinion?

No, it just adds another wrinkle to the disclosure. Honestly I had looked at this before and let it slip through the cracks.

If using Appendix D to disclose the construction loan as a separate transaction then the above cite requires the product to be disclosed as a balloon payment instead of interest only.

I'm beginnig to think the software companies simply decided they weren't going to support construction loans.

So using the LE for a construction loan-balloon 1yr would be shown as:

Purpose: Construction

Product: 1 year Fixed Rate-Balloon Payment

Correct??

Year 1 Balloon Payment, Fixed Rate

FWIW - we are showing our 1 yr fixed rate interest only construction loan PRODUCT as "11 mo. Interest Only, Fixed Rate", we have a Balloon payment due in the Loan Terms section "at the end of year 1" and I agree with how this is showing. And I believe we should be getting the AP table but it is not yet showing.

So for your 9 month interest only fixed rate construction, i believe the product will be "8 mo. Interest Only, Fixed Rate".
Can this amount increase after closing? For monthly P&I - no
For Balloon payment - yes, you will have to pay xxx at the end of year 1 (which I believe would be correct even for your 9 mo loan - 1026.37 b8 - The due date of the maximum amount of the ballon payment required by b7ii of this section shall be disclosed as the year in which the event occurs, counting from the due date of the initial periodic payment.)

SaaL - Apparently you have failed to read the commentary to Appendix D if you are comfortable that you are disclosing your construction only loan product correctly.

Why do you feel you need an AP table?

No, I've read Appendix D - I may not be applying it correctly and I know there's some ambiguity related to proper disclosure of construction only loans under TRID but I did in fact read it. Many times. I realize the AP table isn't specifically called for in App D as cited above - it is saying that you must disclose the balloon in a certain way when you are disclosing the construction loan separately, but I don't take that to mean that is all you have to do. You still have to comply with the other requirements of the loan estimate and I believe the AP table requirements would still apply.

I'm reading the instructions for the Adjustable Payment Table and since I have a periodic principal and interest payment that will change from interest only to a balloon I believe I need the table to disclose my Interest Only,

I could change my mind - construction only and one time close construction loans are proving to be very challenging to disclose properly - but that's what I'm looking for on my form at the moment.

First - scroll back in this thread and read the highlighted area that Dan highlighted in the Appendix D commentary. These are construction interest only loans and are to be disclosed as balloon loans.

A final balloon payment alone does not trigger the AP table.

As far as disclosing the product as a balloon instead of interest only, since our loan has both features and interest only trumps balloon when determining product, I still believe the product would be interest only (or that I could make a decent argument for that)- even though it does have a balloon payment feature as well. I'm disclosing it as a product with a balloon payment feature as the Appendix specifies.......that also has an interest only feature, and since I can only disclose one - under the section noted 1026.37 (a)(10((ii)(D) seems to me it would be interest only.

I am interested to see if anyone has a sample Loan Estimate for the type of construction-only loans we do:
12 months
adjustable rate (can adjust daily)
interest only (for which we "hold back" the interest in reserve)
with a balloon payment at maturity.

So Randy/Dan, do you really think App D "overrides" the general guidelines? I have been trying to make the two work together. It seems to me it leaves alot open to interpretation but I think that's a big part of the reason we're all coming up with such different answers.

And I did think that the AP table would be required in a balloon scenario (periodic principal and interest payment may change after consummation not based on adjustment to the interest rate). But there's no scheduled p&i, just i until the balloon. Guess I need to look up the definiton of "Periodic principal and interest". Something to think about....

SaaL.

Appendix D is specific - it trumps the general guidelines.

"The creditor determines the amount of the interest-only payment to be made during the construction phase using the assumption in appendix D, part I.A.1.

......the creditor must disclose the construction phase transaction as a product with a balloon payment feature, pursuant to §§ 1026.37(a)(10)(ii)(D) and 1026.38(a)(5)(iii), in addition to reflecting the balloon payment in the projected payments table."


But you are free to disclose as you see fit for your organization.

Saal, I agree with Randy's above statement. If you use Appendix D to disclose the construction phase as a separate transaction then you must follow the requirements of Appendix D and disclose the product as a balloon product.

o.k. thanks Dan. I think I need to walk this back through step by step for the two products my bank offers.

We offer a construction only loan and a one time close construction loan that we disclose as a single transaction. Initially, I thought you were attempting to disclose a construction only loan but it sounds like you're also doing or may be doing the perm and disclosing the two separately? Not sure if disclosure of a construction only vs. construction portion of construct to perm differs under Reg Z and App D.

I don't see why it would differ, to be honest. Whether the bank is only doing the construction loan or whether they will do both, but disclosed separately, I believe the balloon product will apply. It doesn't meet the typical definition of what you think of as a balloon, because technically, it's a single-pay transaction...but Appendix D is treating it in a specific manner and Z has always considered (disclosed) that one payment as a balloon in my experience.

From Appendix D:

7. Relation to §§ 1026.37 and 1026.38. A creditor must disclose a projected payments table for certain transactions secured by real property, pursuant to §§ 1026.37(c) and 1026.38(c), instead of the general payment schedule required by § 1026.18(g) or the interest rate and payments summary table required by § 1026.18(s). Accordingly, some home construction loans that are secured by real property are subject to §§ 1026.37(c) and 1026.38(c) and not § 1026.18(g). See comment app. D-6 for a discussion of transactions that are subject to § 1026.18(s). Under § 1026.17(c)(6)(ii), when a multiple-advance construction loan may be permanently financed by the same creditor, the construction phase and the permanent phase may be treated as either one transaction or more than one transaction. Following are illustrations of the application of appendix D to transactions subject to §§ 1026.37(c) and 1026.38(c), under each of these two alternatives:

i. If a creditor uses appendix D and elects pursuant to § 1026.17(c)(6)(ii) to disclose the construction and permanent phases as separate transactions, the construction phase must be disclosed according to the rules in §§ 1026.37(c) and 1026.38(c). Under §§ 1026.37(c) and 1026.38(c), the creditor must disclose the periodic payments during the construction phase in a projected payments table. The provision in appendix D, part I.A.3, which allows the creditor to omit the number and amounts of any interest payments “in disclosing the payment schedule under § 1026.18(g)” does not apply because the transaction is governed by §§ 1026.37(c) and 1026.38(c) rather than § 1026.18(g). The creditor determines the amount of the interest-only payment to be made during the construction phase using the assumption in appendix D, part I.A.1. Also, because the construction phase is being disclosed as a separate transaction and its terms do not repay all principal, the creditor must disclose the construction phase transaction as a product with a balloon payment feature, pursuant to §§ 1026.37(a)(10)(ii)(D) and 1026.38(a)(5)(iii), in addition to reflecting the balloon payment in the projected payments table.

ii. If the creditor elects to disclose the construction and permanent phases as a single transaction, the repayment schedule must be disclosed pursuant to appendix D, part II.C.2. Under appendix D, part II.C.2, the projected payments table must reflect the interest-only payments during the construction phase in a first column, followed by the appropriate column(s) reflecting the amortizing payments for the permanent phase. The creditor determines the amount of the interest-only payment to be made during the construction phase using the assumption in appendix D, part II.A.1.

To summarize Dan's original post:

No AP
Use of APP D trumps
Use of Balloon Pmt.

Do we mark the 11 int. pmts with an "E" for estimate as per APP. D?

Construction/Perm The construction part is 11 month int only with a balloon. We plan on using Year 1 Balloon Payment, Fixed Rate . Should it be be 11 mo. Balloon Payment, Fixed Rate, since the balloon pmt is the 12th pmt? Geez. (Randy & Dan....you are saving us all and have been very patient. We luv you guys)

Loan Term - 12 mo.

Product - 11 mo Interest Only, Fixed Rate

Construction/Perm The construction part is 11 month int only with a balloon.

This implies, or at least to me, that the construction phase is being disclosed as a separate transaction otherwise why would there be a balloon payment. If using Appendix D for the disclosures then you will follow it's requirements:

Term - 12 months

Product - Year 1 Balloon Payment, Fixed Rate

Thanks Dan

Curiously, Dan...where does it say that Balloon would trump the I/O feature based on Appendix D? I/O would normally trump balloon as a feature.

i. If a creditor uses appendix D and elects pursuant to § 1026.17(c)(6)(ii) to disclose the construction and permanent phases as separate transactions, the construction phase must be disclosed according to the rules in §§ 1026.37(c) and 1026.38(c). Under §§ 1026.37(c) and 1026.38(c), the creditor must disclose the periodic payments during the construction phase in a projected payments table. The provision in appendix D, part I.A.3, which allows the creditor to omit the number and amounts of any interest payments “in disclosing the payment schedule under § 1026.18(g)” does not apply because the transaction is governed by §§ 1026.37(c) and 1026.38(c) rather than § 1026.18(g). The creditor determines the amount of the interest-only payment to be made during the construction phase using the assumption in appendix D, part I.A.1. Also, because the construction phase is being disclosed as a separate transaction and its terms do not repay all principal, the creditor must disclose the construction phase transaction as a product with a balloon payment feature, pursuant to §§ 1026.37(a)(10)(ii)(D) and 1026.38(a)(5)(iii), in addition to reflecting the balloon payment in the projected payments table.

And before someone brings up the question about the balloon payment definition. From 1026.37(b).

(5) Balloon payment. A statement of whether the transaction includes a balloon payment, labeled “Balloon Payment.” For purposes of this paragraph (b)(5), “balloon payment” means a payment that is more than two times a regular periodic payment. “Balloon payment” includes the payment or payments under a transaction that requires only one or two payments during the loan term.

Thanks Dan...I know we had already discussed it, but I could NOT put my finger back on it.

Too many exceptions to the exceptions...geez!!!

__(I shoulda looked at my emails on this very subject. )_______________________

Okay, to dredge this back up. We have a construction only (no purchase) 12 mo. int. only loan with variable rate based on WSJ prime.

The LE will show:
Term= 12 mo.
Purpose= Construction
Product= Year 1 Balloon, 0/Monthly Adjustable rate

No AP table but AIR table.

Is that correct?

If I receive a reply to the following I will report back.


There appears to be a potential for conflicting information for disclosing construction only loans on both the Loan Estimate and the Closing Disclosure when the loan has interest only payments. For example a 9 month construction only loan with 8 monthly interest only payments and the 9th payment is the final interest and principal payment.

From 1026.37(b)(5)

Balloon payment. A statement of whether the transaction includes a balloon payment, labeled “Balloon Payment.” For purposes of this paragraph (b)(5), “balloon payment” means a payment that is more than two times a regular periodic payment. “Balloon payment” includes the payment or payments under a transaction that requires only one or two payments during the loan term.

Section 1026.37(a)(iii) states the following:

The disclosure of a loan feature under paragraph (a)(10)(ii) of this section shall precede the disclosure of the loan product under paragraph (a)(10)(i) of this section. If a transaction has more than one of the loan features described in paragraph (a)(10)(ii) of this section, the creditor shall disclose only the first applicable feature in the order the features are listed in paragraph (a)(10)(ii) of this section.

The following is from Regulation Z, Appendix D:

7. Relation to §§ 1026.37 and 1026.38. A creditor must disclose a projected payments table for certain transactions secured by real property, pursuant to §§ 1026.37(c) and 1026.38(c), instead of the general payment schedule required by § 1026.18(g) or the interest rate and payments summary table required by § 1026.18(s). Accordingly, some home construction loans that are secured by real property are subject to §§ 1026.37(c) and 1026.38(c) and not § 1026.18(g). See comment app. D-6 for a discussion of transactions that are subject to § 1026.18(s). Under § 1026.17(c)(6)(ii), when a multiple-advance construction loan may be permanently financed by the same creditor, the construction phase and the permanent phase may be treated as either one transaction or more than one transaction. Following are illustrations of the application of appendix D to transactions subject to §§ 1026.37(c) and 1026.38(c), under each of these two alternatives:
i. If a creditor uses appendix D and elects pursuant to § 1026.17(c)(6)(ii) to disclose the construction and permanent phases as separate transactions, the construction phase must be disclosed according to the rules in §§ 1026.37(c) and 1026.38(c). Under §§ 1026.37(c) and 1026.38(c), the creditor must disclose the periodic payments during the construction phase in a projected payments table. The provision in appendix D, part I.A.3, which allows the creditor to omit the number and amounts of any interest payments “in disclosing the payment schedule under § 1026.18(g)” does not apply because the transaction is governed by §§ 1026.37(c) and 1026.38(c) rather than § 1026.18(g). The creditor determines the amount of the interest-only payment to be made during the construction phase using the assumption in appendix D, part I.A.1. Also, because the construction phase is being disclosed as a separate transaction and its terms do not repay all principal, the creditor must disclose the construction phase transaction as a product with a balloon payment feature, pursuant to §§ 1026.37(a)(10)(ii)(D) and 1026.38(a)(5)(iii), in addition to reflecting the balloon payment in the projected payments table.

1026.37(a)(10)(ii) lists Interest Only ahead of Balloon Payment. 1026.38(a)(5) references the applicable sections in 1026.37(a)(10) for disclosing the product on the Closing Estimate.

Would the CFPB please advise which section of the regulation would take precedence in disclosing the product on the Loan Estimate and the Closing Disclosure, 1026.37(a)(10)(iii) or Appendix D?

Should the product for a 9 month interest only construction only loan be disclosed as:

Product – 8 mo. Interest Only, Fixed Rate

Or should it be disclosed as:

Product – Year 1 Balloon Payment, Fixed Rate

You guidance on this issue would be greatly appreciated.

I, for one, am checking this thread periodically to see if Dan receives any kind of response from the CFPB! (We do interest-only construction loans with a balloon payment so I'm anxious to hear.)

In the meantime, we have a problem. Our LOS vendor is still working on getting construction loans right. Well, what should happen but we have a construction loan customer. I just spoke with the lender and this is day three of application so we really need to send the LE. Can we send a LE that we KNOW isn’t fully correct but we aren’t SURE how to properly complete it (see Dan’s thread above)? The costs are correct - we do know that but that first page....oh boy. We’re doomed no matter what we do I’m thinking. Should I polish my resume?

Examiners will expect supervised entities to make good faith efforts to comply with the TRID Rule's requirements in a timely manner. Specifically, examiners will consider the institution's implementation plan, including actions taken to update policies, procedures, and processes, its training of appropriate staff, and its handling of early technical problems or other implementation challenges.


As long as you are making a good faith effort to comply in the beginning (and it being well documented of course) I don't think you have much to worry about.

Except for the lawyers. I don't think the lawyers are going to show any leniency for our good faith efforts.

if using the Appendix D assumption that 1/2 of the loan amount is outstanding for the entire term of the loan, in a 12-month fixed rate interest only loan, my understanding is we would disclose product as a 1 yr balloon, fixed rate loan. In my projected payments table for the first 11 payments, would I show a range of payments based on interest on 1/2 of the amount outstanding for a range of 28 days to 31 days, or can I disclose a single payment amount based on 30 days? Also, for the final balloon payment, would that be for 1/2 of the loan amount plus interest, or would it show the full loan amount?

By way of example:
$200,000 loan amount 5.00% fixed rate

Yr 1 Final Payment
Monthly P&I $383.56 to 424.66 $100,410.96

OR

$200,000 loan amount 5.00% fixed rate

Yr 1 Final Payment
Monthly P&I $410.96 $100,410.96

A lawyer would need a cause for action. APR or finance charge violation - sure. Some other technical completion error on the form that the consumer still does not understand, I don't see it.


Final payment would be the full loan amount plus interest.

In a construction loan, the LE page 3, "In 5 years" should this be completed and the TIP is "0%". The software does not seem to be filling these fields correctly. Any ideas?? Do we manually calculate this for TIP?

Well 0 is not correct that is for sure.

Since a construction loan is based upon App D. and the amount of interest on a construction loan is an estimate do we place a label of "E" meaning estimate on the TIP? The true amount of interest paid on a construction loan is unknown at the time of the LE! Weird that the bureau leaves us hanging on a construction loan.

Yep...it seems 'estimate' has gone out the window all around on Appdx D calcs.

What are you using to calc TIP? The App D estimated interest? or other amount?

I had the same question today when I was reviewing our first construction only one year balloon loan. I spoke to an FDIC examiner and asked her this same question on which feature to use for my Product on the LE. I had seen in Appendix D where it seemed to say something different than the regulation. To make a long story short, I pointed out the difference and after we went back and forth on it, her final comment to me was to use Interest Only and to follow the regulation instead of the Appendix D. I kept questioning her why and what was the purpose of the Appendix D if not to follow it for construction only loans. She would, or could not give me an answer. I have documented my call to her but I still question that.

I will be very interested to hear what Dan finds out. Thanks!

You have to remember, Farm Girl, that although FDIC has responsibility for examining and enforcement, only the CFPB has interpretive authority for Reg Z.

I have not heard from the CFPB but my FDIC Review Examiner telephoned me this morning. She will be discussing the issue with a couple of "senior" examiners and she also impliend they then will most likely contact Washington.

We have a construction only LE that has to go out today. MortgageBot is disclosing as interest only fixed and showing the interest payment as if the loan were fully disbursed on day 1. We talked to them about Appendix D and they won't budge. We have the OCC in house, so I'm hoping to get an opinion from them.

I heard from the FDIC and they are advising us to disclose the product as interest only.

For our 9 month interest only construction loan we were advised to disclose it as:

Product - 9 mos. Interest Only, Fixed Rate

If I hear from the CFPB I will post if they give a consenting or opposing opinion to the FDIC's.

That's the same answer I got from the FDIC. Did your contact explain why we would not follow Appendix D and why it states we should disclose the short term interest only payment loans that have a balloon payment as a Balloon feature? I'm just curious because I kept asking the examiner I was speaking with and she never did give me an answer.

The 2 examiners I spoke with basically said that .37(a)(10) took precedence in reporting the product. They relied primarily on the CFPB "Guide to Forms" publication and I believe it was page 15 or 16. I'm at a different branch today and don't have those notes with me. They didn't say it but left me with the impression they think that the Appendix D guidance would apply to construction loans that were single pay loans or for some reason had P&I payments.

I can't say that I 100% agree with them but with them providing that opinion and 2 major software companies I'm dealing with are disclosing in alignment with that opinion I'm going to run with it.

That's what we are doing also. I have documented my call to the FDIC very well in case there is any change to this.
Thank you Dan for your help; I appreciate it.

I just received a call from the CFPB and they gave me the same guidance as the FDIC did.

Based on the opinions I received from the FDIC and CFPB it appears they agree that .17(a)(10) overrides Appendix D.

Dan, how does FDIC and CFPB reconcile disclosing 9 mo interest only when the interest only payments only happen for 8 months and the full principal and interest are due in month 9?

They didn't even though I kept referring them to the Commentary for 1026.37(a)(10)(2)(ii).

Based on the information from the CFBP and FDIC the product would be a 9 month interest only loan. Under the loan terms section would you still answer yes to "balloon payment' and state the balloon payment due at the end of the 9 month period?

I have the same question...help anyone?

Under the loan terms section would you still answer yes to "balloon payment' and state the balloon payment due at the end of the 9 month period?

Yes.

Thank you Dan.

Was there any resolution to the disclosure of the AP table? We have a 12 month interest-only construction loan and are disclosing as 11 month with a balloon. However, the response to the question about whether the payment will change has been No and no AP table. However, we've had some internal "complaints" from lenders that this is misleading to our customers and believe the response should be Yes as depending upon the amount of the draws, the payment could increase after consummation. If we change the response to Yes, the AP table will generate but we don't know what to put in it as we do not do the permanent financing so will not know the subsequent payment information. I don't believe there has been any other guidance around this scenario. Are you also showing the AP table? Thank you for your consideration.

No changes that I'm aware of. Still presenting as described based on a strict 50% assumption.

So no AP table. Have you (or anyone) had any similar discussions about saying No to the payment changing? We believe it is correct and in accordance with the current direction, but from a customer's point of view, could we say Yes and just not include the AP table (granted this would be a manual effort) since we don't know the information? We've tried to help the lender understand that it is an "estimate" based on a certain amount being outstanding and yes the payments could increase based on further draws, but that doesn't make the disclosure "incorrect". Thank you!

but from a customer's point of view, could we say Yes and just not include the AP table

No and I doubt your software will allow it either.

Well, it's not just that one thing that's troublesome...on our note it states a final balloon payment of 'up to $', together with accrued interest will be due...well, that balloon payment is the principal plus one month of 50% interest. Chances are, by maturity it will be fully advanced...so again...not exactly precise, is it?!?

I can't advise you on varying from what your vendor defaults to...sorry!

on our note it states a final balloon payment of 'up to $',

Well that is a real problem as that represents your legal obligation and has nothing to do with TRID. TRID is a disclosure. What you need legally is a whole 'nother animal. You need to contact your legal counsel.

Thank you both for your insight. No our vendor will not generate it without the AP table; it would have to be done "manually"........we are working with legal counsel, it's been a challenge no doubt. Just don't really know how else to explain it to a lender so they have some sense of confidence in talking to their borrowers.