TILA-RESPA
Integrated Disclosure
Guide to the Loan Estimate and Closing
Disclosure forms
December 2017
Consumer Financial
Protection Bureau
This guide is current as of the date set forth on the cover page. It has been updated to reect the
2017 TILA-RESPA Rule. It has not been updated to reect the 2018 TILA-RESPA Rule. An updated
version will be posted when it is available.
2 TILA-RESPA INTEGRATED DISCLOSURE | VERSION 2.0
Version log
The Bureau updates this guide on a periodic basis to reect nalized clarications
to the rule which impacts guide content, as well as administrative updates. Below
is a version log noting the history of this document and its updates:
Date Version Rule Changes
December 2017 2.0 Updates to incorporate the July 2017 nal rule, including changes
and clarications on:
§ The Loan Estimate in the General Requirements, General
Information, Loan Terms, Projected Payments table, Costs at
Closing, Loan Costs and Other Costs, Calculating Cash to Close
table, Alternative Calculating Cash to Close table, Comparisons,
and Conrm Receipt.
§ The Closing Disclosure in the General Requirements, General
Information, Costs at Closing table, Other Costs, Calculating Cash
to Close table, Summaries of Transactions, Borrower’s Transaction,
Seller’s Transaction, Escrow Account, Loan Calculations, and
Conrm Receipt.
§ Coverage of closed-end credit transactions secured by a
cooperative unit in various sections of the guide.
Also, includes changes to Revised Loan Estimate (Section 2.1.2) and
other miscellaneous administrative changes.
October 2016 1.4 Updates to incorporate guidance from existing webinars and
guidance, including additional clarication on:
§ The Loan Estimate in the General Information, Loan Terms,
Projected Payments Table, Loan Costs, Other Costs, Adjustable
Payment Table, Adjustable Interest Rate Table, Contact
Information, and Other Considerations sections.
§ The Closing Disclosure in the General Information, Projected
Payments Table, Loan Costs, Other Costs, Loan Disclosures,
Escrow Disclosures, and Other Disclosures sections.
Also, miscellaneous administrative changes.
3 TILA-RESPA INTEGRATED DISCLOSURE | VERSION 2.0
Date Version Rule Changes
July 2015 1.3 § Changes to bring guide into alignment with Final Rule issued
7/21/2015 and other technical corrections
January 2015 1.2 § Permits certain language related to construction loans for
transactions involving new construction on the Loan Estimate
(Section 2.4.3 Other Considerations)
September 2014 1.1 § Updates to information on who to contact with questions on the
rule (Section 1.3)
§ Clarication of description of time periods less than whole years
(Section 2.2.2. Loan Terms)
§ Clarication of requirement relating to provision of appraisals for
certain loan types. (Section 3.6.2. Other Disclosures)
April 2014 1.0 Original Document
4 TILA-RESPA INTEGRATED DISCLOSURE | WHAT’S INSIDE
What’s inside
Version log ..........................................................................................................................2
1. Introduction .................................................................................................................. 7
1.1 What is the purpose of this Guide? ......................................................... 9
1.2 Who should read this Guide? ................................................................. 10
1.3 Where can I nd additional resources that will help me understand
the TILA-RESPA Rule?..............................................................................10
2. Loan Estimate .............................................................................................................12
2.1 General Requirements ............................................................................ 12
2.1.1 Issuance and Delivery ............................................................... 12
2.1.2 Revised Loan Estimate .............................................................. 12
2.1.3 Use of Compliance Guide ........................................................ 13
2.1.4 Rounding .................................................................................... 13
2.1.5 Consummation .......................................................................... 13
2.2 Loan Estimate (page 1) ........................................................................... 14
2.2.1 General Information .................................................................. 15
2.2.2 Loan Terms ................................................................................. 22
2.2.3 Projected Payments ..................................................................25
2.2.4 Costs at Closing .........................................................................33
2.3 Loan Estimate (page 2) ...........................................................................35
2.3.1 Loan Costs .................................................................................. 37
2.3.2 Other Costs ................................................................................42
5 TILA-RESPA INTEGRATED DISCLOSURE | WHAT’S INSIDE
2.3.3 Calculating Cash to Close ........................................................48
2.3.4 Alternative Calculating Cash To Close Table for Transactions
Without A Seller or For Simultaneous Subordinate Lien
Loans ........................................................................................... 53
2.3.5 Adjustable Payment (AP) Table ...............................................56
2.3.6 Adjustable Interest Rate (AIR) Table .......................................57
2.4 Loan Estimate (page 3) ...........................................................................60
2.4.1 Contact Information .................................................................. 61
2.4.2 Comparisons .............................................................................. 61
2.4.3 Other Considerations ...............................................................63
2.4.4 Servicing ..................................................................................... 64
2.4.5 Conrm Receipt .........................................................................65
3. Closing Disclosure .....................................................................................................66
3.1 General Requirements ............................................................................66
3.1.1 Issuance and Delivery ............................................................... 66
3.1.2 Corrected Closing Disclosure .................................................66
3.1.3 Use of Compliance Guide ........................................................ 67
3.1.4 Rounding .................................................................................... 67
3.1.5 Consummation .......................................................................... 67
3.2 Closing Disclosure (page 1) ...................................................................68
3.2.1 General Information .................................................................. 69
3.2.2 Loan Terms ................................................................................. 72
3.2.3 Projected Payments ..................................................................72
3.2.4 Costs at Closing .........................................................................73
3.3 Closing Disclosure (page 2) ................................................................... 75
3.3.1 Loan Costs ..................................................................................77
3.3.2 Other Costs ................................................................................79
3.4 Closing Disclosure (page 3) ...................................................................83
6 TILA-RESPA INTEGRATED DISCLOSURE | WHAT’S INSIDE
3.4.1 Calculating Cash to Close ........................................................ 85
3.4.2 Alternative Calculating Cash to Close Table For Transaction
Without a Seller or for Simultaneous Subordinate Lien Loans
.....................................................................................................87
3.4.3 Summaries of Transactions ......................................................90
3.4.4 Borrower’s Transaction ............................................................. 91
3.4.5 Seller’s Transactions ..................................................................96
3.5 Closing Disclosure (page 4) .................................................................101
3.5.1 Loan Disclosures ......................................................................102
3.5.2 Partial Payments ......................................................................103
3.5.3 Escrow Account .......................................................................104
3.5.4 Adjustable Payment (AP) Table .............................................106
3.5.5 Adjustable Interest Rate (AIR) Table .....................................106
3.6 Closing Disclosure (page 5) .................................................................107
3.6.1 Loan Calculations ....................................................................108
3.6.2 Other Disclosures ....................................................................109
3.6.3 Contact Information ................................................................ 111
3.6.4 Conrm Receipt ....................................................................... 112
4. Where can I nd a copy of the TILA-RESPA Rule and get more information
about it? ....................................................................................................................113
7 TILA-RESPA INTEGRATED DISCLOSURE | INTRODUCTION
1. Introduction
For more than 30 years, Federal law required lenders to provide two different
disclosure forms to consumers applying for a mortgage. The law also generally
required two different forms at or shortly before closing on the loan. Two different
Federal agencies developed these forms separately, under two Federal statutes:
the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act of
1974 (RESPA). The information on these forms was overlapping and the language
inconsistent. Not surprisingly, consumers often found the forms confusing. It is also
not surprising that lenders and settlement agents found the forms burdensome to
provide and explain.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank
Act) directed the Consumer Financial Protection Bureau (Bureau) to integrate the
mortgage loan disclosures under TILA and RESPA sections 4 and 5. Section 1032(f)
of the Dodd-Frank Act mandated that the Bureau propose for public comment
rules and model disclosures that integrate the TILA and RESPA disclosures by July
21, 2012. The Bureau satised this statutory mandate and issued proposed rules
and forms on July 9, 2012. To accomplish this, the Bureau engaged in extensive
consumer and industry research, analysis of public comment, and public outreach
for more than a year. After issuing the proposal, the Bureau conducted a large-
scale quantitative study of its integrated disclosures with approximately 850
consumers, which concluded that the Bureau’s integrated disclosures had on
average statistically signicant better performance than the preexisting disclosures
under TILA and RESPA.
On December 31, 2013, the Bureau published a nal rule with new, integrated
disclosures – “Integrated Mortgage Disclosures Under the Real Estate Settlement
Procedures Act (Regulation X) and the Truth In Lending Act (Regulation Z)” (TILA-
RESPA Final Rule). On January 20, 2015 and July 21, 2015, the Bureau issued
amendments to the TILA-RESPA Final Rule. Additionally, the Bureau published
technical corrections on December 24, 2015, and a correction to supplementary
information on February 10, 2016. On July 7, 2017, the Bureau issued further
amendments to formalize guidance, and provide greater clarity and certainty
regarding the TILA-RESPA Final Rule. These amendments were published in the
8 TILA-RESPA INTEGRATED DISCLOSURE | INTRODUCTION
Federal Register on August 11, 2017. The TILA-RESPA Final Rule, the amendments,
and corrections are collectively referred to as the TILA-RESPA Rule in this Guide.
The TILA-RESPA Rule provides a detailed explanation of how the forms should
be lled out and used. The rst new form (Loan Estimate) is designed to provide
disclosures that will be helpful to consumers in understanding the key features,
costs, and risks of the mortgage loan for which they are applying. The Loan
Estimate must be provided to consumers no later than three business days after
they submit a loan application. The second form (Closing Disclosure) is designed
to provide disclosures that will be helpful to consumers in understanding all of the
costs of the transaction. Consumers must receive the Closing Disclosure no later
than three business days before consummation of their loan.
The forms use clear language and design to make it easier for consumers to locate
key information, such as interest rate, monthly payments, and costs to close the
loan. The forms also provide more information to help consumers decide whether
they can afford the loan and to compare the cost of different loan offers, including
the cost of the loans over time.
The Loan Estimate and Closing Disclosure must be used for most closed-end
consumer mortgages secured by real property or a cooperative unit. Home equity
lines of credit, reverse mortgages, and mortgages secured by a mobile home or by
a dwelling (other than a cooperative unit) that is not attached to real property (i.e.,
land) must continue to use the preexisting disclosures under TILA and RESPA. The
TILA-RESPA Rule generally
1
does not apply to loans made by persons who are not
considered “creditors” as dened in Regulation Z. (§ 1026.2(a)(17))
Generally, the Loan Estimate and Closing Disclosure require the disclosure
of categories of information that will vary due to the type of loan, the payment
schedule of the loan, the fees charged, the terms of the transaction, and State
law provisions. The extent of these variations cannot be shown on a single, static
example. This Guide includes most of the requirements concerning completing
the Loan Estimate and Closing Disclosure. There is additional information about
completing the Loan Estimate and Closing Disclosure, including specic information
about how to complete these forms for construction loans, in the TILA-RESPA
Integrated Disclosure Rule Small Entity Compliance Guide (Compliance Guide),
which is available at www.consumernance.gov/policy-compliance/guidance/
implementation-guidance/tila-respa-disclosure-rule/. However, these Guides may
not illustrate all of the permutations of the information required or omitted from
1 Provisions of the TILA-RESPA Rule may apply, for example, to mortgage brokers and others who
are not creditors as dened in Regulation Z. See, for example, § 1026.19(e)(1)(ii).
9 TILA-RESPA INTEGRATED DISCLOSURE | INTRODUCTION
the Loan Estimate or Closing Disclosure for any particular transaction. Only the
TILA-RESPA Rule and its Ofcial Interpretations can provide complete and denitive
information regarding its requirements.
The Compliance Guide includes more information on the TILA-RESPA Rule
in general.
1.1 What is the purpose of this Guide?
The focus of this Guide is to provide the instructions for completing the Loan
Estimate and Closing Disclosure. This Guide also highlights common situations
that may arise when completing the Loan Estimate and Closing Disclosure.
This Guide - The Guide to Completing TILA-RESPA Integrated Disclosure Forms
(Guide to Forms) - is designed as a companion to the Compliance Guide which
addresses questions about the TILA-RESPA Rule in general. The Compliance Guide
also discusses the good faith disclosure of settlement costs, limitations on changes
to those amounts at consummation, and other information concerning the process
and requirements related to completing and delivering the Loan Estimate and the
Closing Disclosure. The Compliance Guide also has a section, Section 14, which
discusses implementation issues specic to construction loans.
This Guide summarizes the instructions for completing the Loan Estimate and
Closing Disclosure, but it is not a substitute for the TILA-RESPA Rule. Only the rule
and its Ofcial Interpretations (also known as commentary) can provide complete
and denitive information regarding its requirements. The discussions below provide
citations to the sections of the TILA-RESPA Rule on the subject being discussed.
Keep in mind that the Ofcial Interpretations, which provide detailed explanations
of many of the TILA-RESPA Rule’s requirements, are found after the text of the rule
and its appendices. The interpretations are arranged by rule section and paragraph
for ease of use. The complete rule and the Ofcial Interpretations are available at
consumernance.gov/policy-compliance/rulemaking/nal-rules/2013-integrated-
mortgage-disclosure-rule-under-real-estate-settlement-procedures-act-regulation-
x-and-truth-lending-act-regulation-z/.
This Guide does not discuss the TILA-RESPA Rule in general or other Federal or
State laws that may apply to the origination of closed-end credit.
At the end of this Guide, there is more information about the TILA-RESPA Rule and
related implementation support from the Bureau.
10 TILA-RESPA INTEGRATED DISCLOSURE | INTRODUCTION
1.2 Who should read this Guide?
If your organization originates closed-end residential mortgage loans, you may nd
this Guide helpful. This Guide—together with the Compliance Guide—will help you
determine your compliance obligations for the mortgage loans you originate.
This Guide may also be helpful to settlement service providers, software providers,
and other companies that serve as business partners to creditors.
1.3 Where can I nd additional
resources that will help me
understand the TILA-RESPA Rule?
Resources to help you understand and comply with the Dodd-Frank Act mortgage
reforms and our regulations, including downloadable guides, are available
through the Bureau’s website at consumernance.gov/policy-compliance/
guidance/implementation-guidance.On this website, we also offer the ability
to sign up for an email distribution list through which we announce additional
resources and tools as they become available. The eRegulations tool, available at
consumernance.gov/eregulations includes an unofcial version of Regulation
Z (12 CFR part 1026), in which the TILA-RESPA Rule is codied. The tool provides
updated versions of the regulatory text and commentary in a single location.
If after reviewing these materials, as well as the regulation and Ofcial
Interpretations, you have a specic regulatory interpretation question about
the TILA-RESPA Rule, you can submit it to us on the Bureau’s website at https://
reginquiries.consumernance.gov/. Please understand that a response is not
an ofcial interpretation of the Bureau and is not a substitute for legal or other
compliance advice.
Generally, we are not able to respond to specic inquiries the same business day.
Actual response times will vary depending on the number of questions we are
handling and the amount of research needed to respond to your question.
11 TILA-RESPA INTEGRATED DISCLOSURE | WHAT’S INSIDE
Email comments about this Guide to CFPB_RegulatoryImplementation@
consumernance.gov. Your feedback is crucial to making this Guide as helpful
as possible. The Bureau welcomes your suggestions for improvements and your
thoughts on its usefulness and readability.
The Bureau is particularly interested in feedback relating to:
§ How useful you found this Guide for understanding the TILA-RESPA Rule.
§ How useful you found this Guide for implementing the TILA-RESPA Rule at
your business.
§ Suggestions you have for improving the Guide, such as additional
implementation tips.
12 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
2. Loan Estimate
2.1 General Requirements
2.1.1 Issuance and Delivery
You must provide a Loan Estimate to the consumer, either by delivering it by
hand or placing it in the mail, no later than three business days of the receipt of an
application. (§1026.19(e)(1)(iii)(A)) An application is considered received when the
consumer provides the following information:
§ Consumer’s name,
§ Consumer’s income,
§ Consumer’s Social Security number to obtain a credit report,
§ Address of the property,
§ Estimate of the value of the property, and
§ The mortgage loan amount sought. (§1026.2(a)(3)(ii))
2.1.2 Revised Loan Estimate
When there is a changed circumstance after the Loan Estimate has been provided,
the creditor can revise the Loan Estimate within three business days of receiving
information sufcient to establish that there has been a changed circumstance.
Revised Loan Estimates generally can be provided no later than four business days
before consummation. (see section 2.1.5 below; §1026.19(e)(4))
13 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
2.1.3 Use of Compliance Guide
Please see the Compliance Guide for additional information on the requirements
for issuing and delivering Loan Estimates and revised Loan Estimates.
The information that follows discusses how to complete the Loan Estimate.
Samples of completed Loan Estimates can be found at consumernance.gov/
policy-compliance/guidance/implementation-guidance/tila-respa-disclosure-rule/.
2.1.4 Rounding
Dollar amounts must be rounded to the nearest whole dollar where noted in the
TILA-RESPA Rule. (§ 1026.37(o)(4)) If an amount is required to be rounded but is
composed of other amounts that are not required or permitted to be rounded,
use the unrounded amounts in calculating the total and then round the nal sum.
Conversely, if an amount is required to be rounded and is composed of rounded
amounts, use the rounded amounts in calculating the total. (Comment 37(o)(4)-2)
Percentage amounts are disclosed by rounding to three decimals and then dropping
any trailing zeros that occur to the right of the decimal place, except where otherwise
noted in the TILA-RESPA Rule. (§ 1026.37(o)(4)(ii); Comment 37(o)(4)(ii)-1)
2.1.5 Consummation
Consummation is not the same thing as closing
or settlement. Consummation occurs when the
consumer becomes contractually obligated to
the creditor on the loan, not, for example, when
the consumer becomes contractually obligated
to a seller on a real estate transaction.
(§ 1026.2(a)(13))
The point in time when a consumer becomes
contractually obligated to the creditor on the loan depends on applicable State
law. (§ 1026.2(a)(13); Comment 2(a)(13)-1) Creditors and settlement agents should
verify the applicable State laws to determine when consummation will occur, and
make sure delivery of the Loan Estimate occurs within three business days of the
receipt of an application.
This Guide uses references
to the legal obligation,
which includes the
promissory note plus any
other agreements between
the creditor and consumer
concerning the extension
of credit.
14 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
2.2 Loan Estimate (page 1)
FIGURE 1: LOAN ESTIMATE (PAGE 1)
section 2.2.1
section 2.2.2
section 2.2.3
section 2.2.4
15 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Page 1 of the Loan Estimate includes general information, a Loan Terms table with
descriptions of applicable information about the loan, a Projected Payments table,
a Costs at Closing table, and a link for consumers to obtain more information at a
website maintained by the Bureau.
Page 1 of the Loan Estimate includes the title “Loan Estimate” and a statement
of “Save this Loan Estimate to compare with your Closing Disclosure.”
(§ 1026.37(a)(1), (2)) The top of page 1 also includes the name and address of the
creditor. (§ 1026.37(a)(3)) A logo or slogan can be used along with the creditor’s
name and address, so long as the logo or slogan does not exceed the space
provided for that information. (§ 1026.37(o)(5)(iii))
If there are multiple creditors, use only the name of the creditor completing the
Loan Estimate. (Comment 37(a)(3)-1) If a mortgage broker is completing the Loan
Estimate, use the name and address of the creditor if known. If not yet known,
leave this space blank. (Comment 37(a)(3)-2)
2.2.1 General Information
Date Issued
The Date Issued is the date the Loan Estimate is placed in the mail or delivered to
the consumer (not the date the form is actually printed). (§ 1026.37(a)(4))
Applicants
Applicants include the name(s) and mailing address(es) of the consumer(s)
applying for the loan. (§1026.37(a)(5)) Use each Applicant’s name and mailing
address if there are multiple Applicants. The mailing address disclosed must be
the U.S. Postal mailing address of the consumer applying for credit. The mailing
FIGURE 2: GENERAL INFORMATION OF THE LOAN ESTIMATE
16 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
address cannot be any other type of address, such as an Applicant’s email address.
An additional page may be added to the Loan Estimate if the space provided is
insufcient to list all of the Applicants. (Comment 37(a)(5)-1)
If credit is extended to a trust established for tax or estate planning purposes,
the Loan Estimate may be provided to the trustee on behalf of the trust. If the
Loan Estimate is delivered to the trustee on behalf of the trust (and to no other
consumer), a creditor may opt to disclose the name and mailing address of the
trust only, although nothing in the TILA-RESPA Rule prohibits the creditor from
additionally disclosing the names of the trustee or other consumers applying for
the credit. Guidance on who should receive disclosures when credit is extended to
a trust established for tax or estate planning purposes can be found in § 1026.2(a)
(22) and § 1026.17(d) and their associated commentary. Information is also
available in the Compliance Guide.
Property
Property is the address of the property (which must include the zip code) that will
secure the transaction. (§1026.37(a)(6)) If the address of the property is unavailable,
use a description of the location of the property, for example a lot number.
Always use a zip code. (Comment 37(a)(6)-1) Personal property, such as furniture
or appliances, that also secures the credit transaction may be, but is not required
to be included as Property. An additional page may not be appended to the Loan
Estimate to disclose a description of personal property. (Comment 37(a)(6)-2)
Sale Price or Appraised Value or Estimated Value
If the loan is a purchase money mortgage loan (i.e., the transaction involves a
seller), use the contract sale price for the Property and label it as Sale Price.
(§ 1026.37(a)(7)(i)) If personal property is included in the Sale Price of the Property,
use that price without any reduction for the appraised or estimated value of the
personal property. (Comment 37(a)(7)-2) If the Sale Price is not yet known, disclose
the estimated value of the Property, using the label “Sale Price.” (Comment 37(a)(7)-1)
For a transaction without a seller, disclose an Appraised Value or an Estimated
Value, as applicable, and use the label “Prop. Value.” The disclosed value must be
based on the best information reasonably available to the creditor at the time that
the Loan Estimate is provided to the consumer. (Comment 37(a)(7)-1)
If the creditor has obtained an appraisal of the Property at the time the Loan
Estimate is provided to the consumer, disclose the Appraised Value stated in
the appraisal that the creditor will use during the underwriting of the loan. If the
17 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
creditor does not know which appraisal it will use to underwrite the loan at the
time the Loan Estimate is provided to the consumer, disclose the value set forth in
any appraisal that the creditor reasonably believes it will use in the underwriting.
If the creditor has not obtained an appraisal but has prepared its own estimate of
value, use the creditor’s estimate of value rather than an estimate of value received
from a consumer. If the creditor has not obtained an appraisal or prepared its own
estimate of value, it may disclose an estimate of value provided by a consumer.
(Comment 37(a)(7)-1)
When disclosing an Appraised Value or an Estimated Value for a construction
loan without a seller (i.e., a non-purchase mortgage loan where some or all of the
proceeds will nance improvements), the creditor has the option to include the
estimated value of improvements to be made on the Property. Alternatively, the
creditor may disclose a value that does not include the estimated value of the
improvements. (Comment 37(a)(7)-1)
Loan Term
Loan Term is the term of the debt obligation. (§1026.37(a)(8)) Describe the Loan
Term as “years” when the Loan Term is in whole years (e.g.,“1 year” or “30 years”).
(Comment 37(a)(8)-1.i, -1.ii) For a Loan Term that is more than 24 months but is not
whole years, describe using years and months with the abbreviations “yr.” and “mo.,”
respectively. For example, a Loan Term of 185 months is disclosed as “15 yr., 5 mo.”
For a Loan Term that is less than 24 months and not whole years, use months only
with the abbreviation “mo.” For example, “6 mo.” or “16 mo.” (Comment 37(a)(8)-2)
For a construction-permanent loan disclosed as a single transaction, the Loan
Term is the total combined term of both phases. If the construction-permanent
loan is disclosed as two separate transactions, the Loan Term for the permanent
phase is counted from the date interest for the permanent phase’s periodic
payment begins to accrue.
Purpose
Describe the consumer’s intended use for the loan. (§ 1026.37(a)(9)) Purpose is
disclosed using one of four descriptions: Purchase, Renance, Construction, or
Home Equity Loan.
§ Purchase is disclosed if the loan will be used to nance the Property’s
acquisition. (§ 1026.37(a)(9)(i)) The purpose of a simultaneous subordinate lien
loan is disclosed as “Purchase” if the loan will be used to nance the Property’s
acquisition and will be secured by the Property. (Comment 37(a)(9)-1.i)
18 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
§ Renance is disclosed if the loan will be used for the renance of an existing
obligation that is secured by the Property (even if the creditor is not the holder
or servicer of the original obligation). (§ 1026.37(a)(9)(ii))
§ Construction is disclosed if the loan will be used to nance the initial
construction of a dwelling on the Property. (§ 1026.37(a)(9)(iii))
§ Home Equity Loan is disclosed if the loan will be used for any other purpose.
(§ 1026.37(a)(9)(iv))
Product
Provide a description of the loan. You are required to include two pieces of
information in this disclosure.
The rst piece of information is any payment feature that may change the periodic
payment, which includes Negative Amortization, Interest Only, Step Payment,
Balloon Payment, or Seasonal Payment. (§ 1026.37(a)(10)(ii)) Additionally, the
duration of the relevant payment feature must be disclosed with a Negative
Amortization, Interest Only, Step Payment, or Balloon Payment feature.
(§ 1026.37(a)(10)(iv)) For example, a payment feature where there is a ve-year
period during which the payments cover only interest, and are not applied to the
principal balance, would be disclosed as a 5 Year Interest Only for the payment
feature.
§ Negative Amortization is when the principal balance of the loan may increase
due to the addition of accrued interest to the principal balance.
§ Interest Only is when one or more regular periodic payments may be applied
only to interest accrued and not to the principal of the loan.
§ Step Payment is when the scheduled variations in regular periodic payment
amounts occur that are not caused by changes to the interest rate during the
loan term.
§ Balloon Payment is when the terms of the legal obligation include a payment
that is more than two times that of a regular periodic payment.
§ Seasonal Payment is when the terms of the legal obligation expressly provide
that regular periodic payments are not scheduled between specied unit-
periods on a regular basis. For example, a “teacher” loan that does not require
monthly payments during summer months has a Seasonal Payment.
§ If the loan can be described with more than one of these descriptions, only the
rst applicable feature is disclosed. (§ 1026.37(a)(10)(iii)) For example, a loan that
19 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
would result in both Negative Amortization and a Balloon Payment would only
disclose Negative Amortization as part of Product.
The second piece of information disclosed is whether the loan uses an Adjustable
Rate, Step Rate, or Fixed Rate to determine the interest rate applied to the
principal balance. (§ 1026.37(a)(10)(i))
§ An interest rate is an Adjustable Rate if the interest rate may increase after
consummation, but the rates that will apply or the periods for which they will
apply are not known at consummation. (§ 1026.37(a)(10)(i)(A))
ú Each description must be preceded by the duration of any introductory
rate or payment period, and the rst adjustment period, as applicable.
(§ 1026.37(a)(10)(iv)) For example, a product with an introductory rate that
is xed for the rst ve years and adjusts every three years starting in year
6 is a 5/3 Adjustable Rate.
ú When there is no introductory period for an Adjustable Rate, disclose “0.”
(Comment 37(a)(10)-1.i.A) For example, a product with no introductory
rate that adjusts every year after consummation is a 0/1 Adjustable Rate.
§ An interest rate is a Step Rate if the interest rate will change after consummation
and the rates that will apply and the periods for which they apply are known at
consummation. (§ 1026.37(a)(10)(i)(B))
ú Each description must be preceded by the duration of any introductory
rate or payment period, and the rst adjustment period, as applicable.
(§ 1026.37(a)(10)(iv)) For example, a product with a step rate that lasts for
ten years, adjusts every year for ve years, and then adjusts every three
years for the next 15 years is a 10/1 Step Rate. (Comment 37(a)(10)-1.ii)
ú When there is no introductory rate for a Step Rate, disclose “0” and then the
applicable time period until the rst adjustment. (Comment 37(a)(10)-1.ii)
§ An interest rate is a Fixed Rate if the interest rate is not an Adjustable Rate or
Step Rate. (§ 1026.37(a)(10)(i)(C))
§ If the loan product consists of a combination of product types, only one product
type is used. Section1026.37(a)(10) does not provide for a combination of
product types and requires the creditor to choose one, and only one, type. For
example:
ú If a loan has a Step Rate for a set period of time followed by an
Adjustable Rate for the remaining term, only the Adjustable Rate is
disclosed. Here, there will be periods of the loan where the rate is
20 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
not known at consummation, and, as a result, the Product cannot be
disclosed as Step Rate.
ú If a loan has a Fixed Rate for a set period of time followed by an
Adjustable Rate for the remaining term, only the Adjustable Rate is
disclosed. Here, there will be periods where an Adjustable Rate applies,
and as a result, it would not meet the requirements of a Fixed Rate disclosure.
The following are examples of Product with both pieces of information included:
§ Year 7 Balloon Payment, 3/1 Step Rate: a step rate with an introductory interest
rate that lasts for three years and adjusts each year thereafter until a balloon
payment is due in the seventh year of the loan term.
§ 2 Year Negative Amortization, Fixed Rate: a xed rate product with a step-payment
feature for the rst two years of the legal obligation that may negatively amortize.
When the time periods disclosed in Product are not in whole years, for time
periods of 24 months or more, disclose the applicable fraction of a year by use of
decimals rounded to two places. For time periods of 24 months or less, disclose the
number of months with the abbreviation “mo.” (Comment 37(a)(10)-3) For example:
§ An Adjustable Rate Product with an
introductory interest rate for 31 months
that adjusts every year thereafter is a 2.58/1
Adjustable Rate.
§ An Adjustable Rate Product with an
introductory interest rate for 18 months that adjusts every 18 months thereafter
is an 18 mo./18 mo. Adjustable Rate.
Loan Type
Loan Type is the type of the loan, such as Conventional or FHA.
Sections 14.7 and 14.8 of the Compliance Guide include
more information about how to disclose Product types for
construction loans
For more Product examples,
please see Comments 37(a)
(10)-1, -2 and -3.
21 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
For Loan Type, disclose:
§ Conventional if the loan is not guaranteed or insured by a Federal or State
government agency,
§ FHA if the loan is insured by the Federal Housing Administration,
§ VA if the loan is guaranteed by the U.S. Department of Veterans Affairs, and
§ Other with a brief description if the loan is insured or guaranteed by another
Federal or a State agency. (§ 1026.37(a)(11))
Loan ID #
Loan ID # is the creditor’s loan identication number that may be used by a
creditor, consumer, and other parties to identify the transaction. (§1026.37(a)
(12)) The Loan ID # may contain alpha-numeric characters and must be unique
to the particular transaction. The same Loan ID # may not be used for different,
but related, loan transactions (such as different loans to the same borrower).
When a revised Loan Estimate is issued, the Loan ID # must be sufcient for the
purpose of identifying the transaction associated with the initial Loan Estimate.
(Comment 37(a)(12)-1)
When the Loan Estimate is completed by a mortgage broker:
§ If the creditor is known, the Loan ID # must be completed. (Comment 37(a)(12)-
1) The creditor can outsource the generation and assignment of the Loan ID # to
the mortgage broker or the creditor can provide the Loan ID # in advance of the
disclosures for inclusion.
§ If the creditor is unknown and the Loan ID # is not reasonably available, the
mortgage broker may leave that disclosure blank. (Comment 37-1)
Rate Lock
Indicate that the rate is locked with Yes, or indicate that the rate is not locked with No.
(§ 1026.37(a)(13))
When the interest rate is locked at the time of the Loan Estimate’s delivery, the
date and time (including the applicable time zone) when the lock period ends must
be disclosed. (§ 1026.37(a)(13)(i))
The date and time (including the applicable time zone) at which the estimated
closing costs expire are disclosed on the Loan Estimate. (§ 1026.37(a)(13)(ii))
However, the date and time are left blank on any revised Loan Estimate provided
22 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
after a consumer has indicated an intent to proceed with the transaction.
(Comment 37(a)(13)-4)
2.2.2 Loan Terms
Disclose in the Loan Terms table:
§ Loan Amount. Use the total amount the consumer will borrow as set forth on
the face of the note. If the amount is in whole dollars, do not disclose cents.
(§ 1026.37(o)(4)),
§ Initial Interest Rate,
§ Initial Monthly Principal & Interest amount,
§ Any adjustments to these amounts after
consummation,
§ Whether the loan includes a Prepayment
Penalty, and
§ Whether the loan includes a Balloon Payment. (§ 1026.37(b))
Interest Rate & Monthly Principal & Interest
The Interest Rate disclosed is the initial rate at consummation. If the initial Interest
Rate is not known at consummation, the fully-indexed rate is disclosed;
a fully-indexed rate is the interest rate calculated using the index value and margin
FIGURE 3: LOAN TERMS TABLE OF THE LOAN ESTIMATE
Information on how to
complete the Loan Terms
table for construction loans
is available in Section 14 of
the Compliance Guide.
23 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
at the time of consummation. (§ 1026.37(b)(2))
The initial principal and interest payment amount also would be calculated
using the same fully-indexed rate, if the initial Interest Rate is not known at
consummation. (§ 1026.37(b)(3))
Adjustment to Loan Amount, Interest Rate, and Monthly
Principal & Interest after consummation
Under the subheading Can this amount
increase after closing?, if the Loan Amount,
Interest Rate, or Monthly Principal & Interest
amounts can increase after consummation,
disclose Yes where applicable with the
information pertinent to the adjustment after
consummation. (§ 1026. 37(b)(6))
§ For an adjustment in Loan Amount, the creditor must also disclose the
maximum principal balance for the transaction and the due date (expressed
as the year or month in which it occurs, rather than an exact date) of the last
payment that may cause the principal balance to increase, together with a
statement whether the maximum principal balance may or will occur under the
terms of the legal obligation. (§ 1026.37(b)(6)(i)) The date disclosed is the year
in which the event occurs, counting from the due date of the initial periodic
payment. (§ 1026.37(b)(8)(ii))
§ For an adjustment in the Interest Rate, also disclose the frequency of interest rate
adjustments, the date when the interest rate may rst adjust, the maximum interest
rate, and the rst date when the interest rate can reach the maximum interest
rate. (§ 1026.37(b)(6)(ii)) The date disclosed is the year in which the event occurs,
counting from the date that interest for the rst scheduled periodic payment
begins to accrue after consummation. (§ 1026.37(b)(8)(i)) Also, disclose and
reference the Adjustable Interest Rate (AIR) Table on page 2 of the Loan Estimate.
(§ 1026.37(b)(6)(ii))
§ For an adjustment to the Monthly Principal & Interest, the creditor would
also disclose the scheduled frequency of adjustments, due date of the rst
adjustment, and the maximum possible amount (and the earliest date it can
occur) of the Monthly Principal & Interest. In addition, if there is a period
during which only interest is required to be paid, also disclose that fact and the
due date of the last periodic payment of such period. (§ 1026.37(b)(6)(iii)) The
date disclosed is the year in which the event occurs, counting from the due
When describing time
periods of less than 24
months that are not whole
years, see the instructions
related to the Product in
section 2.2.1 above.
24 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
date of the initial payment. (§ 1026.37(b)(8)(ii)) Also, disclose and reference the
Adjustable Payment (AP) Table on page 2. (§ 1026.37(b)(6)(iii))
When the Loan Amount, Interest Rate, or Monthly Principal & Interest payment
cannot increase after consummation, disclose No where applicable. (§ 1026.37(b)(6))
Prepayment Penalty and Balloon Payment
A Prepayment Penalty is a charge imposed for paying all or part of a transaction’s
principal before the date on which the principal is due. It does not include a
waived third-party charge that the creditor imposes if the consumer prepays the
loan’s entire principal sooner than 36 months after closing. (§ 1026.37(b)(4))
A Balloon Payment is a payment that is more than two times a regular periodic
payment. (§ 1026.37(b)(5))
Under the subheading Does the loan have these features?, when the loan has a
Prepayment Penalty or a Balloon Payment disclose Yes, as applicable. (§ 1026.37
(b)(4) and (5)) When the answer is Yes to either, also disclose, as applicable:
§ The maximum amount of the Prepayment
Penalty and the date when the period
during which the penalty may be imposed
terminates. For example, As high as $3,240
if you pay off the loan in the rst two years.
(§ 1026.37(b)(7)(i))
§ The maximum amount of the Balloon
Payment and the due date of such payment. For example, You will have to pay
$149,263 at the end of year 7. (§ 1026.37(b)(7)(ii))
When describing time
periods less than 24
months that are not whole
years, see the instructions
related to the Product in
section 2.2.1 above.
25 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
2.2.3 Projected Payments
The Projected Payments table shows estimates of the periodic payments that the
consumer will make over the life of the loan. Creditors must disclose estimates of
the following periodic payment amounts in the Projected Payments table:
§ Principal & Interest,
§ Mortgage Insurance,
§ Estimated Escrow,
§ Estimated Total Monthly Payment, and
§ Estimated Taxes, Insurance, & Assessments,
even if not paid with escrow funds.
The Projected Payments table also describes whether taxes, insurance, and
other assessments will be paid with funds in the consumer’s escrow account.
(§ 1026.37(c)(2))
Information on how to
complete the Projected
Payments table for
construction loans is
available in Section 14 of
the Compliance Guide.
FIGURE 4: PROJECTED PAYMENTS TABLE OF THE LOAN ESTIMATE
26 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
General Instructions
Show in one column the initial Periodic Payment (or range of payments if required)
for each of Principal & Interest, Mortgage Insurance, and Estimated Escrow.
(§ 1026.37(c)(1)) Depending on the features of the loan, subsequent periodic
payments also may be required to be disclosed. The Periodic Payment is the
regularly scheduled payment of Principal & Interest, Mortgage Insurance, and
Estimated Escrow. (Comment 37(c)(1)(i)-1)
Initial Periodic Payment
To calculate the initial Periodic Payment, use the interest rate that will apply at
closing, including any initial discounted or premium interest rate. If the interest rate
at closing is not known, such as for an adjustable rate loan without an introductory
xed rate period, use the fully-indexed rate to determine the initial Periodic
Payment. (Comment 37(c)(1)(i)-2)
If the consumer’s periodic payments will remain constant over the life of the
loan, such as in a xed rate, xed payment loan without mortgage insurance, the
Projected Payments table has just one column.
Subsequent Periodic Payments
If any of the triggering events listed below may occur during the life of the loan,
add a column to show the amount of the periodic payments after the triggering
event. (§ 1026.37(c)(1)(i)):
§ The Principal & Interest amount or range of such amount may change (for
example if the loan has an adjustable rate). (§ 1026.37(c)(1)(i)(A))
ú Negative Amortization – for loans that have a Negative Amortization
feature, the Principal & Interest amount may change when the Negative
Amortization period ends under the terms of the legal obligation,
meaning the consumer must begin making payments that do not result in
an increase of the principal balance. (Comment 37(c)(1)(i)(A)-2)
Information on how to calculate the initial Periodic Payment
for a construction loan is available in Section 14 of the
Compliance Guide.
27 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
ú Interest Only – for Interest Only loans, the Principal & Interest amount
may change when the Interest Only period ends, meaning the consumer
must begin making payments that do not defer repayment of principal.
(Comment 37(c)(1)(i)(A)-3)
ú Minor Periodic Payment variations resulting solely from the fact that
months have different numbers of days are not triggering events.
(Comment 37(c)(1)(i)(A)-1)
§ Adjustable Rate loans – the Projected Payments table will have a new column, up
to a maximum of four columns, for each scheduled rate adjustment. Because the
Principal & Interest amount may change each time the rate is scheduled to adjust,
a new column is required, up to a maximum of four columns. There is a new
column, up to a maximum of four columns, even if the range of payments will stay
the same. For example, there is a new column, up to a maximum of four columns,
even when the range will stay the same because the range is the minimum and
maximum interest rate caps listed in the contract. (Comment 37(c)(1)(i)(A)-1)
§ There is a scheduled Balloon Payment. (§ 1026.37(c)(1)(i)(B))
§ The lender must automatically terminate Mortgage Insurance or any functional
equivalent. (§ 1026.37(c)(1)(i)(C))
ú Even if the borrower may cancel the insurance earlier, use the date on
which the lender must automatically terminate Mortgage Insurance
coverage under applicable law. Only termination of Mortgage Insurance
is a triggering event, while a decline in Mortgage Insurance premiums is
not. (Comment 37(c)(1)(i)(C)-3)
ú However, if there are already four columns, and Mortgage Insurance
would terminate during the range disclosed in the fourth column, no
automatic termination of Mortgage Insurance is disclosed on the
Projected Payments table. (§1026.37(c)(1)(ii)(b))
§ When the Periodic Payment amount changes more than once in a single year,
show in the subsequent column the Periodic Payment amounts in the year
following the one in which there were multiple changes. (§ 1026.37(c)(1)(i)(D))
A year for this table is the 12-month period following the due date of the initial
Periodic Payment. (§ 1026.37(c)(3)(ii))
28 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Number of Columns
The maximum number of columns the Periodic Payments table may contain is
four. If a loan has more than four triggering events, for example, if the loan has
more than three rate changes, show a range of payments in the fourth column
that reects all remaining periodic payments not shown in the rst three columns.
(§ 1026.37(c)(1)(ii)) EXCEPT:
§ A Balloon Payment scheduled as a nal payment always requires its own
column. (§ 1026.37(c)(1)(ii)(A))
§ If disclosing the nal Balloon Payment means that other triggering events will
not t within the four-column maximum, show the other triggering events as a
range of payments in the third column. (§ 1026.37(c)(1)(ii)(A))
§ A Balloon Payment that is not a nal payment is a triggering event that does not
necessarily require its own column. (Comment 37(c)(1)(ii)(A)-1)
§ The automatic termination of Mortgage Insurance generally requires the
corresponding periodic payment to be shown in its own column, unless doing
so would exceed the four-column maximum. (§ 1026.37(c)(1)(ii)(B))
ú Where the automatic termination of Mortgage Insurance need not be
shown in its own column, the column showing the next periodic payment
or range of payments should show the periodic payment amount without
Mortgage Insurance. (Comment 37(c)(1)(ii)(B)-1)
§ Show a range of payments rather than a single payment when:
ú There are more triggering events than can be shown in four columns
and thus one column must be used to show two or more periodic
payment amounts.
ú The Principal & Interest payment or range of such payments may change
more than once in a single year or may change (at least once) in the same
year as the initial periodic payment.
ú The Principal & Interest payment may adjust based on an interest rate
index and the rates are not yet known (i.e., for an Adjustable Rate loan).
(§ 1026.37(c)(1)(iii))
§ For a column that contains a range of payments, show both a minimum and
maximum payment using rounded dollar amounts. (§ 1026.37(c)(1)(iii), (o)(4)(ii))
For an Adjustable Rate loan, use the maximum and minimum interest rates that
could apply such as through an interest rate cap. (Comment 37(c)(1)(iii)(C)-1)
29 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
§ Ranges of payments are required only for the Principal & Interest amount and
the Estimated Total Monthly Payment. Do not show a range of payments for
Mortgage Insurance or Estimated Escrow. (Comment 37(c)(1)(iii)-1)
2.2.3.A Payment Calculation Column Headings
To the right of the Payment Calculation label, as column headings, use the years of
the loan during which the payments or ranges of payments shown in that column
will apply. (§ 1026.37(c)(3)(ii))
§ Use a sequence of whole years, counting from the due date of the initial
Periodic Payment.
ú For example, a two-column projected payments table might contain
the headings “years 1-7” and “Years 8-30” if a triggering event occurs 85
months after the due date of the initial Periodic Payment. If a triggering
event occurs in the middle of a year, use the next year in sequence as the
heading for the subsequent column.
ú For example, assume a 30-year loan that requires Interest Only payments
for the rst 54 months from the due date of the initial Periodic Payment.
The column heading for the initial Periodic Payment would be “Years 1-5”
and the column heading for the subsequent Periodic Payment would be
“Years 6-30” because the triggering event occurs during the 5th year of
the loan. (Comment 37(c)(3)(ii)-1)
§ For Periodic Payments that may increase based on an adjustment of the
interest rate, use the maximum loan term possible under the terms of the legal
obligation. To calculate the maximum loan term, assume that the interest rate
rises as rapidly as is possible under the terms of the legal obligation, taking into
account any applicable interest rate caps. (Comment 37(c)(3)(ii)-2)
§ For a Balloon Payment scheduled as a nal payment, use Final Payment as the
column heading. (§ 1026.37(c)(3)(iii))
2.2.3.B Principal & Interest
Use the amount due for Principal & Interest for the period shown in the column
heading. (§ 1026.37(c)(2)(i)) If the payment or range of payments includes any
payments of Interest Only, use the phrase Only Interest under the amount of the
payment or range of payments.
30 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Adjustable Rate Loans
Generally, calculate Principal & Interest using the maximum payments by
assuming that the interest rate will rise as rapidly as possible, taking into account
the terms of the legal obligation, including any applicable caps on interest rate
adjustments and lifetime interest rate cap. Other laws, such as a State usury law,
can set the maximum rate if the legal obligation does not include a lifetime interest
rate cap. Calculate the minimum payments by assuming that the interest rate will
decrease as rapidly as possible, taking into account any introductory rates, caps on
interest rate adjustments, and lifetime interest rate oor. For an Adjustable Rate
loan based on an index that has no lifetime interest rate oor, the minimum interest
rate is equal to the margin. (Comment 37(c)(2)(i)-1)
For loans with a Negative Amortization feature, calculate Principal & Interest
using the maximum payment amounts after the end of the period during which
the principal balance may increase by assuming the maximum principal amount
permitted under the terms of the legal obligation at the end of the period.
Calculate the minimum payment amount by assuming the interest rate is the
minimum possible under the terms of the legal obligation. (Comment 37(c)(2)(i)-2)
For loans with a Balloon Payment feature that may change depending on previous
interest rate adjustments, calculate Principal & Interest using the assumptions for
minimum and maximum interest rates described above and show as a range of
payments. (Comment 37(c)(2)(i)-3)
2.2.3.C Mortgage Insurance
Disclose the maximum amount payable as Mortgage Insurance that corresponds
to the Principal & Interest payment shown in the same column. (§ 1026.37(c)(2)(ii))
Disclose as a rounded number. (§ 1026.37(o)(4)(ii))
Mortgage Insurance includes any mortgage guarantee that provides coverage
similar to mortgage insurance (such as a U.S. Department of Veterans Affairs or U.S.
Department of Agriculture guarantee), even if not technically considered insurance
under State or other applicable law. (§ 1026.4(b)(5); Comment 37(c)(1)(i)(C)-1)
Calculate Mortgage Insurance premiums based on the principal balance that
will exist after changes to the interest rate and payment amounts pursuant to the
legal obligation. The calculations should take into account any initial discounted
31 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
or premium interest rate. For example, for an Adjustable Rate transaction that has
a discounted interest rate during an initial ve-year period, calculate Mortgage
Insurance premiums using a composite rate based on the rate in effect during
the initial ve-year period and, thereafter, the fully-indexed rate, unless otherwise
required by applicable law. (Comment 37(c)(1)(i)(C)-2)
If Mortgage Insurance is not required, disclose “0.” (Comments 37(c)(2)(ii)-1 and -2)
Disclose the Mortgage Insurance amount that corresponds with the Principal &
Interest amount shown in the same column, even if Mortgage Insurance is paid on
a different schedule than Principal & Interest. (Comment 37(c)(2)(ii)-2)
2.2.3.D Estimated Escrow
Disclose the amount the consumer will pay into an escrow account each month
under the terms of the legal obligation. (§ 1026.37(c)(2)(iii)) Use a rounded number.
(§ 1026.37(o)(4)(ii)) If an escrow account will not be established, disclose “0.”
Disclose “—” if there will be an escrow account, but the escrow account will be
closed during the time-frame attributable to the applicable Periodic Payment.
(Comment 37(c)(2)(iii)-1)
2.2.3.E Estimated Total Monthly Payment
For each column, disclose the sum of the Principal & Interest, Mortgage
Insurance, and Estimated Escrow as Estimated Total Monthly Payment.
(§ 1026.37(c)(2)(iv)) The amount is rounded if any of the component amounts are
rounded. (§ 1026.37(o)(4)(i)(C))
2.2.3.F Estimated Taxes, Insurance & Assessments
As Estimated Taxes, Insurance & Assessments, disclose the total monthly
amount due for Property Taxes, Homeowner’s Insurance, charges imposed by a
cooperative, condominium or homeowners association; ground rent; leasehold
payments; and certain insurance premiums or charges if required by the lender.
(§§ 1026.37(c)(4)(ii), 1026.43(b)(8)) Disclose Estimated Taxes, Insurance &
Assessments as a rounded number. (§ 1026.37(o)(4)(i))
Homeowner’s Insurance is any insurance against loss or damage, or against
liability arising out of the property. (§§ 1026.4(b)(8), 1026.37(c)(4)(ii)) The insurance
premiums included as Estimated Taxes, Insurance & Assessments are for credit
life, accident, health, or loss-of-income insurance; insurance against loss of or
32 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
damage to property, or against liability arising out of the ownership or use of
property; and debt cancellation or debt suspension coverage. (§§ 1026.4(b)(7),
(8), (10), 1026.37(c)(4)(ii)) Homeowner’s Insurance includes ood
insurance. (§§1026.37(c)(4)(ii); 1026.43(b)(8))
To calculate Property Taxes, Homeowner’s Insurance, and other insurance
premiums, use the taxable assessed value of the real property or cooperative
unit securing the transaction after consummation, including the value of any
improvements or construction, to the extent known, and the replacement costs of
the property over the rst year. (§ 1026.37(c)(5))
Include these amounts as Estimated Taxes, Insurance & Assessments even if an
escrow account will not be established under the terms of the legal obligation.
If the time period disclosed is not monthly, use the appropriate term to reect the
fact that the transaction’s terms provide for other than monthly period payments,
such as bi-weekly or quarterly payments. (§1026.37(o)(5)(i); Comment 37(o)(5)-4)
For example, if the legal obligation calls for biweekly payments, the Estimated
Taxes, Insurance and Assessments must be disclosed as a biweekly payment
amount. However, if the legal obligation calls for monthly payments, the Estimated
Taxes, Insurance and Assessments must be disclosed as a monthly amount.
By the use of checkboxes, disclose if Property Taxes, Homeowner’s Insurance, or
Other required charges will be paid from an escrow account established under
the terms of the legal obligation under the heading “This estimate includes”.
When applicable, describe briey the type of charge to the right of the word
“Other”. If there is more than one Other charge, disclose one type and the phrase
and additional charges. (Comment 37(c)(4)(iv)-1)
Under a heading of In Escrow?: disclose Yes when funds from an escrow account
established under the terms of the legal obligation will be used to pay Property
Taxes, Homeowner’s Insurance, and Other assessments; or disclose No when funds
from an escrow account established under the terms of the legal obligation will not
be used to pay Property Taxes, Homeowner’s Insurance, and Other assessments. If
a portion of Property Taxes, Homeowner’s Insurance, and Other assessments will
be paid using funds from such an escrow account, a creditor may indicate that is the
case by using the word “Some.” If more than one item is disclosed as Other, disclose
Yes, Some when one item is paid using funds from such an escrow account and
another is not. (Comment 37(c)(4)(iv)-2)
33 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
2.2.4 Costs at Closing
The Costs at Closing table shows Estimated Closing Costs and Estimated Cash to
Close.
Estimated Closing Costs are calculated in the same manner as the Total Closing
Costs disclosed on page 2 of the Loan Estimate. (see section 2.3.1 below)
The Estimated Closing Costs are also itemized to show from page 2 of the Loan
Estimate:
§ The total of the Loan Costs table,
§ The total of the Other Costs table, and
§ Lender Credits in the Total Closing Costs subheading. (§ 1026.37(d)(1)(i))
§ The estimated amount of cash the consumer will be expected to pay at closing
is also shown as Estimated Cash to Close. This amount is the same as the
Estimated Cash to Close, from the Calculating Cash to Close table on page 2 of
the Loan Estimate. (§ 1026. 37(d)(1)(ii))
FIGURE 5: COSTS AT CLOSING TABLE OF THE LOAN ESTIMATE
34 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Alternative Costs at Closing Table
For transactions without a seller, an Alternative Costs at Closing table shown as
Figure 6 (together with an Alternative Calculating Cash to Close table on page 2
of the Loan Estimate shown later in Figure 20) can be used in place of the Costs at
Closing table shown in Figure 5 above. Similarly, an Alternative Costs at Closing
table and an Alternative Calculating Cash to Close table can be used in place of
the Costs at Closing table shown in Figure 5 for a simultaneous subordinate lien
loan in a purchase transaction if the Closing Disclosure for the rst lien loan will
disclose the entirety of the seller’s transaction. (§ 1026.37(d)(2) and (h)(2))
The Alternative Costs at Closing table contains a variation that places checkboxes
with Estimated Cash to Close in order to indicate whether the cash is due from
or to the consumer. (Comment 37(d)(2)-2) If the Alternative Costs at Closing table
is used, then the Alternative Calculating Cash to Close on page 2 of the Loan
Estimate also must be used. (Comment 37(d)(2)-1)
FIGURE 6: ALTERNATIVE COSTS AT CLOSING TABLE OF THE LOAN ESTIMATE
35 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
2.3 Loan Estimate (page 2)
FIGURE 7: LOAN ESTIMATE (PAGE 2)
sec tion 2.3.1
section 2.3.2
section 2.3.3
section 2.3.6
section 2.3.5
36 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Up to four main categories of costs are disclosed on page 2 of the Loan Estimate:
1. A good-faith itemization of the Loan Costs and Other Costs associated with
the loan. (§ 1026.37(f) and (g))
2. A Calculating Cash to Close table that shows how the amount of cash needed
at closing is calculated. (§ 1026.37(h))
3. For transactions with adjustable monthly payments, an Adjustable Payments
(AP) Table with relevant information about how the monthly payments will
change. (§ 1026.37(i))
4. For transactions with adjustable interest rates, an Adjustable Interest Rate
(AIR) Table with relevant information about how the interest rate will change.
(§ 1026.37(j))
The items associated with the mortgage are broken down into two general types,
Loan Costs and Other Costs. Generally, Loan Costs are those costs paid by the
consumer to the creditor and third-party providers of services the creditor requires
to be obtained by the consumer during the origination of the loan. (§ 1026.37(f))
Other Costs include taxes, governmental recording fees, and certain other
payments involved in the real estate closing process. (§ 1026.37(g))
Items that are a component of title insurance or are for conducting the closing
must include the introductory description of Title –. (§ 1026.37(f)(2)(i), (g)(4)(i))
If State law requires additional disclosures, those additional disclosures are made
on a document whose pages are separate from, and not presented as part of,
the Loan Estimate. (Comments 37(f)(6)-1, 37(g)(8)-1)
The amounts disclosed in the Loan Costs and Other Costs table are rounded to
the nearest whole dollar. The daily amount of Prepaid Interest and the monthly
amounts for the items in the Initial Escrow Payment at Closing are rounded or
truncated to the nearest whole cent. (§ 1026.37(o)(4); Comment 37(o)(4)(i)(A)-1)
The Loan Costs and Other Costs tables are further broken down in the
next subsection.
37 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
2.3.1 Loan Costs
Loan Costs are disclosed in three subheadings, each of which is subtotaled:
§ Origination Charges,
§ Services You Cannot Shop For, and
§ Services You Can Shop For.
Disclose the sum of these three
subtotals as Total Loan Costs.
(§ 1026.37(f))
Information about allocating Loan Costs when disclosing a
construction-permanent loan as two separate transactions
is available in Section 14.4 of the Compliance Guide.
Information on disclosing construction inspection fees
and similar construction loan fees is available in Section
14.18 of the Compliance Guide.
F I G UR E 8: LOAN COSTS TABLE OF THE LOAN ESTIMATE
38 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Origination Charges
Origination Charges are items the consumer will pay to each creditor and loan
originator for originating and extending credit. (§ 1026.37(f)(1))
First, include the amount paid, if any, by the consumer to the creditor to reduce
the interest rate as both a percentage of the loan amount and a dollar amount.
(§ 1026.37(f)(1)(i)) If no amount is paid by the consumer to the creditor to reduce
the interest rate, then leave blank both the percentage of points stated in the
label and the dollar amount. (Comment 37(f)(1)-4)
Any other items that the consumer will pay to the creditor and loan originator
may also be disclosed, up to 13 individual items. (§ 1026.37(f)(1)(ii)) If there are
more than 13 Origination Charges, disclose the total amount of the items that
exceed 12 as Additional Charges. (§ 1026.37(f)(6)(i)) Describe the items, other
than for points paid, using terminology that clearly and conspicuously describes
the service that is disclosed. (Comment 37(f)(1)-3)
The following items should be itemized separately in the Origination Charges
subheading:
§ Compensation paid directly by a consumer to a loan originator that is not
also the creditor; or
§ Any charge imposed to pay for a loan level pricing adjustment (LLPA)
assessed on the creditor that is passed on to the consumer as a
cost at consummation and not as an adjustment to the interest rate.
(Comment 37(f)(1)-5)
Only items paid directly by the consumer to compensate a loan originator
are Origination Charges. Do not disclose compensation to a loan originator
paid indirectly by a creditor through the interest rate on the Loan Estimate.
(Comment 37(f)(1)-2) Also, if the LLPA is accounted for through the rate but
not charged as a direct up-front fee, do not disclose the LLPA as a separately
itemized Origination Charge.
FIGURE 9: ORIGINATION CHARGES TABLE OF THE LOAN ESTIMATE
39 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Services You Cannot Shop For
Services You Cannot Shop For are items provided by persons other than the
creditor or mortgage broker that the consumer cannot shop for and will pay for
at settlement. (§ 1026.37(f)(2)) Items listed as Services You Cannot Shop For must
use terminology that describes each item, and disclose them in alphabetical order.
(§ 1026.37(f)(5))
Services You Cannot Shop For might include:
§ Appraisal fee,
§ Appraisal management company fee,
§ Credit report fee,
§ Flood determination fee,
§ Government funding fee (such as a VA or USDA guarantee fee, or any other fee
paid to a government entity as part of a governmental loan program),
§ Homeowner’s association certication fee,
§ Lender’s attorney fee,
§ Tax status search fee,
§ Third-party subordination fee,
§ Title – closing protection letter fee,
§ Title – lender’s title insurance policy, and
§ An upfront mortgage insurance fee (unless the fee is a prepayment of future
premiums or a payment into an escrow account). (Comment 37(f)(2)-2)
Describe services related to the issuance of title insurance policies with the word
Title – at the beginning of the item. (Comment 37(f)(2)-3)
Items that are required for the issuance of title insurance policies may include:
FIGURE 10: SERVICES YOU CANNOT SHOP FOR TABLE OF THE LOAN ESTIMATE
40 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
§ Examination and evaluation of title evidence to determine the insurability
of the title being examined and what items to include or exclude in any title
commitment and policy to be issued,
§ Preparation and issuance of the title commitment or other document that
discloses the status of title, identies the conditions that must be met before the
policy will be issued, and obligates the insurer to issue a policy of title insurance
if such conditions are met,
§ Resolution of title underwriting issues and taking steps needed to satisfy any
conditions for the issuance of title insurance policies,
§ Preparation and issuance of the title insurance policies, and
§ Payment of premiums for any lender’s title insurance coverage.
(Comment 37(f)(2)-3)
The amount of the premium for the lender’s title insurance coverage must be
disclosed without any adjustment to the premium that might be made for the
simultaneous purchase of an owner’s title insurance policy. (Comment 37(f)(2)-4)
Disclose no more than 13 Services You Cannot Shop For. (§ 1026.37(f)(2)(ii)) If there
are more than 13 Services You Cannot Shop For, disclose the total amount of the
items that exceed 12 with the label Additional Charges. An addendum to the Loan
Estimate cannot be used to disclose the additional items. (§ 1026.37(f)(6)(i))
Services You Can Shop For
Services You Can Shop For are services that the creditor requires but that are
provided by persons other than the creditor or mortgage broker. They are services
FIGURE 11: SERVICES YOU CAN SHOP FOR TABLE OF THE LOAN ESTIMATE
If the creditor requires a service, the creditor must
disclose the service and the fee for the service. Generally,
a creditor is not required to provide a detailed breakdown
or itemization of the ancillary and administrative services
related to a settlement service required by the creditor.
41 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
that the consumer can shop for and will pay for at settlement. (§ 1026.37(f)(3)) Items
listed as Services You Can Shop For must use terminology that describes each
item and disclose them in alphabetical order. (§ 1026.37(f)(5))
A creditor permits a consumer to shop for an item if the creditor permits the consumer
to select the provider of that item, subject to reasonable requirements (such as
appropriate licensing of the provider). (§ 1026.19(e)(1)(vi)(A); Comment 19(e)(1)(vi)-1)
Whether a creditor permits a consumer to shop is determined by the relevant facts
and circumstances. More information on when a creditor permits a consumer to shop
is available in Section 7.5 of the Compliance Guide.
Services You Can Shop For might include:
§ Pest inspection fee,
§ Survey fee,
§ Title – closing agent fee, and
§ Title – closing protection letter fee. (Comment 37(f)(3)-2)
When disclosing services related to the issuance of title insurance policies, use the
word Title – at the beginning of the item. (Comment 37(f)(2)-3)
Items that are related to the issuance of title insurance policies may include:
§ Examination and evaluation of title evidence to determine the insurability
of the title being examined and what items to include or exclude in any title
commitment and policy to be issued,
§ Preparation and issuance of the title commitment or other document that
discloses the status of title, identies the conditions that must be met before the
policy will be issued, and obligates the insurer to issue a policy of title insurance
if such conditions are met,
§ Resolution of title underwriting issues and taking steps needed to satisfy any
conditions for the issuance of title insurance policies,
§ Preparation and issuance of the title insurance policies, and
§ Payment of premiums for any lender’s title insurance coverage.
(Comment 37(f)(3)-3)
The creditor must disclose the amount of the premium for the lender’s title
insurance coverage without any adjustment to the premium that might be made for
the simultaneous purchase of an owner’s title insurance policy. (Comment 37(f)(3)-3)
42 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Disclose no more than 14 Services You Can Shop For. (§ 1026.37(f)(3)(ii)) If there
are more than 14 Services You Can Shop For, disclose the total amount of the
items that exceed 13 with the label Additional Charges. (§ 1026.37(f)(6)(ii)(B)) An
addendum to the Loan Estimate can be used to disclose the additional items.
(§ 1026.37(f)(6)(ii))
Total Loan Costs
Total Loan Costs is the sum of the subtotals of Origination Charges, Services You
Cannot Shop For, and Services You Can Shop For. (§ 1026.37(f)(4))
2.3.2 Other Costs
FIGURE 13: OTHER COSTS TABLE OF THE LOAN ESTIMATE
FIGURE 12: TOTAL LOAN COSTS TABLE OF THE LOAN ESTIMATE
43 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Disclose Other Costs under four subheadings, each of which is subtotaled:
§ Taxes and Other Government Fees,
§ Prepaids,
§ Initial Escrow Payment at Closing, and
§ Other.
Total Other Costs is the sum of these four subtotals. (§ 1026.37(g)(5))
Other Costs are established by government action, determined by standard
calculations applied to ongoing xed costs, or based on an obligation incurred
by the consumer independently of any requirement imposed by the creditor.
(Comment 37(g)-1) Other items that are required to be paid at or before closing
pursuant to the contract for sale between the consumer and a seller are disclosed
on the Loan Estimate to the extent the creditor has knowledge of those items
when it issues the Loan Estimate. (Comment 37(g)-2)
Other Costs must be disclosed in the order listed in the TILA-RESPA Rule, with any
additional items listed in alphabetical order in subsequent lines of the applicable
subheading. (§ 1026.37(g)(7))
An addendum to the Loan Estimate cannot be used for additional items on the
Other Costs table. If all of the charges cannot be itemized in the number of lines
provided in a subheading of the Other Costs table, the total of those items that
exceed the number permitted are disclosed with the label “Additional Charges” on
the last line of that subheading. (§ 1026.37(g)(8))
Taxes and Other Government Fees
Under Taxes and Other Government Fees, disclose Recording Fees and Other
Taxes rst and Transfer Taxes second. (§ 1026.37(g)(1))
Recording Fees and Other Taxes are fees assessed by a government authority to
record and index the loan and title documents as required under State or local law,
FIGURE 14: TAXES AND OTHER GOVERNMENT FEES TABLE OF THE LOAN ESTIMATE
44 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
together with any charges or fees imposed by a State or local government that are
not Transfer Taxes. (Comment 37(g)(1)-1 and -2) Recording Fees and Other Taxes do
not include fees that are based on the sale price of the property or Loan Amount.
For example, a fee for recording a subordination that is $20, plus $3 for each page
over three pages, is included as Recording Fees and Other Taxes; but a fee of
$1,250 based on 0.5% of the Loan Amount is included as Transfer Taxes, and not
included as Recording Fees and Other Taxes. (Comment 37(g)(1)-1) Sales tax and
other types of tax assessed on the individual settlement services provided are
included in the cost of the individual service and are not disclosed as Recording
Fees and Other Taxes.
Transfer Taxes are State and local government fees on mortgages and home sales
that are based on the Loan Amount or sale price of the property. The name that
is used under State or local law to refer to these amounts is not determinative
of whether or not they are disclosed as Transfer Taxes on the Loan Estimate.
(Comment 37(g)(1)-3)
Disclose only Transfer Taxes paid by the consumer on the Loan Estimate. Whether
the consumer pays the transfer tax is based on applicable State or local law. For
example:
§ If a State law indicates a lien can attach to the consumer’s acquired property if
the charge is not paid, the amount is included as part of Transfer Taxes;
§ If State or local law is unclear or does not specically attribute the amount to
the seller or consumer, disclose an amount that is not less than the amount
apportioned to the consumer using common practice in the locality of the
Property. (Comment 37(g)(1)-4)
Transfer taxes to be paid by the seller are not disclosed on the Loan Estimate as
Transfer Taxes. (Comment 37(g)(1)-5)
The amount of Transfer Taxes disclosed could be modied to the extent the
creditor has knowledge of the apportionment of transfer taxes in the contract
for sale between the consumer and a seller when it issues the Loan Estimate.
(Comment 37(g)-2) When a creditor does not have the contract of sale when it
issues the Loan Estimate, the creditor must use the apportionment of transfer
taxes provided for by State or local law, or common practice when State or local
law is unclear. (Comment 37(g)(1)-4)
Disclose the sum of all Transfer Taxes paid by the consumer as Transfer Taxes.
(§ 1026.37(g)(1)(ii)) No additional items may be listed or deleted in the Taxes and
Other Government Fees category. (Comment 37(g)(1)-6)
45 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Prepaids
Prepaids are items to be paid by the consumer in advance of the rst scheduled
payment of the loan. (§ 1026.37(g)(2)) Prepaids are:
§ Homeowner’s Insurance Premium,
§ Mortgage Insurance Premium,
§ Prepaid Interest,
§ Property Taxes, and
§ A maximum of three additional items.
Each item must include the applicable time period covered by the amount to be paid
by the consumer and the total amount to be paid. (§ 1026.37(g)(2)(i)-(iv))
Initial Escrow Payment at Closing
Initial Escrow Payment at Closing includes items that the consumer will be expected
to place into a reserve or escrow account at consummation to be applied to recurring
periodic payments. (§ 1026.37(g)(3)) Initial Escrow Payment at Closing includes:
§ Homeowner’s Insurance,
§ Mortgage Insurance,
§ Property Taxes, and
§ A maximum of ve other items.
FIGURE 15: PREPAIDS TABLE OF THE LOAN ESTIMATE
FIGURE 16: INITIAL ESCROW PAYMENT AT CLOSING TABLE OF THE LOAN ESTIMATE
46 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Also disclose the amount escrowed per month for each item, the number of months
collected at consummation and the total amount paid. (§ 1026.37(g)(3)(i), (ii), (iii), (v))
Other
Other includes items in connection with the transaction that the consumer is likely
to pay or has contracted with a person other than the creditor or loan originator
to pay at closing and of which the creditor is aware at the time of issuing the Loan
Estimate. (§ 1026.37(g)(4))
Separate insurance, warranty, guarantee or event-coverage products include, for
example:
§ Owner’s title insurance,
§ Credit life insurance,
§ Debt suspension coverage,
§ Debt cancellation coverage,
§ Warranties of home appliances and systems, and
§ Similar products.
These items are disclosed when coverage is written in connection with the
mortgage loan. These examples would not include additional coverage
and endorsements on insurance otherwise required by the creditor.
(Comment 37(g)(4)-3)
Items that disclose any premiums paid for separate insurance, warranty, guarantee,
or event-coverage products not required by the creditor must include the
parenthetical description (optional) at the end of the label. (§ 1026.37(g)(4)(ii))
A maximum of ve items can be disclosed as Other. (§ 1026.37(g)(4)(iii))
Describe services related to the issuance of title insurance policies with the word
Title – at the beginning of the item. When the owner’s title insurance premium
FIGURE 17: OTHER TABLE OF THE LOAN ESTIMATE
47 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
includes a simultaneous issuance premium, the premium is calculated by taking
the full owner’s title insurance premium, adding the simultaneous issuance
premium for the lender’s coverage (if any), and then deducting the full premium for
lender’s coverage. (Comment 37(g)(4)-2)
When the creditor is aware of those items, Other includes for example:
§ Commissions of real estate brokers or agents,
§ Additional payments to the seller to purchase personal property pursuant to the
contract of sale,
§ Homeowner’s association and condominium charges associated with the
transfer of ownership, and
§ Fees for inspections not required by the creditor but paid by the consumer
pursuant to the contract of sale. (Comment 37(g)(4)-4)
Other does not include construction costs, payoffs of existing liens, or payoffs of
other secured debt or unsecured debt.
Total Closing Costs
Total Closing Costs is the sum of Total Loan Costs (shown in Figure 8), Total Other
Costs, and Lender Credits. (§ 1026.37(g)(6))
Lender Credits is the amount of any payments from the creditor to the consumer
and is disclosed as a negative number. Lender Credits include specic lender
credits (if any) that pay for a particular fee disclosed on the Loan Estimate and
general or non-specic lender credits (if any) that do not pay for a particular fee on
the Loan Estimate. (Comment 37(g)(6)(ii)-1)
F I G UR E 18 : TOTAL CLOSING COSTS TABLE OF THE LOAN ESTIMATE
48 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
For loans where all or a portion of closing costs are offset by a credit or rebate
provided by the creditor (sometimes referred to as “no cost” loans), disclose such
credit or rebate as Lender Credits. The creditor should ensure that Lender Credits
is sufcient to cover the estimated items the creditor represented to the consumer
as not being paid by the consumer at consummation, regardless of whether such
representations pertained to specic items. (Comment 37(g)(6)(ii)-2)
2.3.3 Calculating Cash to Close
A creditor discloses a calculation yielding an estimate of the cash needed from
or provided to the consumer at consummation. The calculation is based on seven
components:
§ Total Closing Costs,
§ Closing Costs Financed (Paid from your Loan Amount),
§ Down Payment /Funds from Borrower,
§ Deposit,
§ Funds for Borrower,
§ Seller Credits, and
§ Adjustments and Other Credits.
The estimate is based on these components, as set out in the TILA-RESPA Rule
and further discussed below and in the Compliance Guide. The calculation and its
components, such as the Down Payment/Funds from Borrower, are independent
of and may differ from certain loan program or investor requirements.
FIGURE 19: CALCULATING CASH TO CLOSE TABLE OF THE LOAN ESTIMATE
49 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Total Closing Costs
Total Closing Costs is the same amount disclosed as Total Closing Costs in the
Other Costs table (see section 2.3.2 above). (§ 1026.37(h)(1)(i))
Closing Costs Financed (Paid from your Loan Amount)
Closing Costs Financed (Paid from your Loan Amount) is calculated by
subtracting the estimated total amount of payments to third parties not otherwise
disclosed in the Loan Costs (see section 2.3.1 above) and Other Costs (see section
2.3.2 above) tables from the Loan Amount disclosed on page 1 of the Loan
Estimate (see section 2.2.2 above). For a Purchase loan other than a simultaneous
subordinate lien loan, the Sale Price is included in the Closing Costs Financed
calculation as a payment to a third party. The Sale Price is not included in the
Closing Costs Financed disclosure for a simultaneous subordinate lien loan, even
if it is a Purchase transaction. Other examples of payments to third parties not
otherwise disclosed in the Loan Costs or Other Costs tables include the amount of
construction costs for transactions that involve improvements to be made on the
property and payoffs of secured or unsecured debt. (Comment 37(h)(1)(ii)-1)
§ If the result of the calculation is a positive number, Closing Costs Financed
(Paid from your Loan Amount) is that amount, disclosed as a negative number.
However, only disclose the amount to the extent that it (as a positive number)
does not exceed the amount of Total Closing Costs.
§ If the result of the calculation is zero or negative, then Closing Costs Financed
(Paid from your Loan Amount) is $0. (Comment 37(h)(1)(ii)-1)
Down Payment/Funds from Borrower
§ In a Purchase loan other than a simultaneous subordinate lien loan or a loan that
involves improvements to be made on the property, subtract the sum of:
ú The Loan Amount,
ú Any existing loans the Borrower will assume, and
ú Any loans subject to which the Borrower will take title to the Property,
from the Sale Price. The calculation is Sale Price less Loan Amount less the
amount that will be disclosed as Existing Loans Assumed or Taken Subject
to on the Closing Disclosure’s Summaries of Transactions table. If the result
is $0 or a positive number, disclose that result as Down Payment/ Funds
from Borrower. (§ 1026.37(h)(1)(iii)(A)) However, when the sum of the Loan
50 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Amount and the amount to be disclosed as Existing Loans Assumed or Taken
Subject to exceeds the Sale Price, the result will be negative. In such cases, the
creditor must perform another calculation, as discussed immediately below, to
determine what number to disclose as Down Payment/Funds from Borrower. (§
1026.37(h)(1)(iii))
§ For a Purchase loan that is a simultaneous subordinate lien loan, a Purchase
loan that involves improvements to be made on the property, or a Purchase
loan where the sum of the Loan Amount and the amount to be disclosed as
Existing Loans Assumed or Taken Subject to exceeds the Sale Price, subtract
the sum of the Loan Amount and the amount that will be disclosed as Existing
Loans Assumed or Taken Subject to (excluding any amount disclosed as
Closing Costs Financed (Paid from your Loan Amount)) from the total amount
of all existing debt being satised in the transaction. (§ 1026.37(h)(1)(iii)(A)(2))
ú If this calculation yields an amount that is positive, disclose that amount as
the Down Payment/Funds from Borrower.
ú If this calculation yields a negative amount or $0, disclose $0 as the Down
Payment/Funds from Borrower. (Comment 37(h)(1)(iii)-2)
For purposes of calculating the Down Payment/Funds from Borrower, “the
total amount of all existing debt being satised in the transaction” is the sum of
amounts that will be disclosed on the Closing Disclosure in the Summaries of
Transactions under § 1026.38(j)(1)(ii), (iii) and (v), as applicable. (Comment 37(h)
(1)(v)-2. Generally, this includes the Sale Price of Property, the Sale Price of Any
Personal Property Included in the Sale as well as the Adjustments and the other
consumer charges that may be disclosed on Line K.04.
§ In all other transactions, subtract the sum of the Loan Amount and the amount
that will be disclosed as Existing Loans Assumed or Taken Subject to (excluding
any amount disclosed as Closing Costs Financed (Paid from your Loan Amount)
from the total amount of all existing debt being satised in the transaction.
(§ 1026.37(h)(1)(iii)(B))
ú If this calculation yields an amount that
is positive, disclose that amount as the
Down Payment/Funds from Borrower.
ú If this calculation yields a negative
amount or $0, disclose $0 as the Down
Payment/Funds from Borrower. (§ 1026.37(h)(1) (iii)(B))
The calculation of Down
Payment/ Funds from
Borrower is independent
of any loan program or
investor requirements.
(Comment 37(h) (1)(iii) -1))
51 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Deposit
§ In a Purchase transaction, Deposit is the amount, disclosed as a negative number,
that is paid to the seller or held in trust or escrow by an attorney or other party
under the terms of the contract for sale of the property. (§ 1026.37(h)(1)(iv)(A))
§ In all other transactions, Deposit is $0. (§ 1026.37(h)(1)(iv)(B))
Funds for Borrower
§ In a Purchase loan (other than a simultaneous subordinate lien loan, a Purchase
loan that involves improvements to be made on the property, or a loan where
the sum of the Loan Amount and the amount to be disclosed as Existing Loans
Assumed or Taken Subject to exceeds the Sale Price), disclose $0 as Funds for
Borrower. (Comment 37(h)(1)(v)-1)
§ In all other transactions, subtract the sum of the Loan Amount and the amount
to be disclosed as Existing Loans Assumed or Taken Subject to (excluding any
amount disclosed as Closing Costs Financed (Paid from your Loan Amount))
from the total amount of all existing debt being satised in the transaction.
ú If this calculation yields a negative amount, disclose that amount as
Funds for Borrower.
ú If the calculation yields a positive amount or $0, disclose $0 as Funds for
Borrower. (§ 1026.37(h)(1)(v))
For purposes of calculating the Funds for Borrower, “the total amount of all
existing debt being satised in the transaction” is the sum of amounts that will
be disclosed on the Closing Disclosure in the Summaries of Transactions under
§ 1026.38(j)(1)(ii), (iii) and (v), as applicable. (Comment 37(h)(1)(v)-2. Generally,
this includes the Sale Price of Property, the Sale Price of Any Personal Property
Included in the Sale as well as the Adjustments and the other consumer
charges that may be disclosed on Line K.04.
Seller Credits
Seller Credits is the sum of the amounts that the seller will pay for items included in
the Loan Costs and Other Costs table, to the extent known. The amount disclosed
as Seller Credits in the Calculating Cash to Close table includes non-specic or
general seller credits and any specic seller credits not disclosed in the Loan Costs
or Other Costs table. Non-specic or general seller credits are payments from the
seller to the consumer that do not pay for a particular fee. Specic seller credits are
52 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
payments from the seller to the consumer to pay for a specic fee. (Comments
37(h)(1)(iv)- 1 and -2) The Seller Credit amount in the Calculating Cash to Close
table is disclosed as a negative number. (§ 1026.37(h)(1)(vi))
Adjustments and Other Credits
Adjustments and Other Credits is the sum of adjustments requiring additional
funds from the consumer, calculated as a positive amount, and other credits
for certain items expected to be paid at closing by persons other than the loan
originator, creditor, consumer, or seller, calculated as negative amounts.
The calculation includes:
§ The total of all items in the Loan Costs and Other Costs tables that are expected
to be paid at closing by persons other than the loan originator, creditor,
consumer, or seller. A creditor is not required to include such amounts if they
are expected to be paid in advance of closing. Examples of items that are paid
by persons other than the loan originator, creditor, consumer, or seller include:
ú Gifts from family members expected to be paid at closing. Gifts expected
to be paid in advance of closing are not included.
ú Credits from a developer or home builder to be applied to items in the
Loan Costs and Other Costs tables. (Comment 37(h)(1)(vii)-1 and -2)
§ Funds provided to the consumer from the proceeds of subordinate nancing,
local or State housing assistance grants, or other similar sources. (Comment
37(h)(1)(vii)-5) For a Purchase transaction that involves both a rst lien loan
and a simultaneous subordinate lien loan, these amounts are included in the
Loan Estimate for the rst lien loan only.
§ Any other amounts (i.e., amounts not included in the Loan Costs or Other Costs
tables) that are required to be paid by the consumer at closing or pursuant
to the contract of sale (if any) as long as they are not already included in the
calculation for Down Payment/Funds from Borrower or Funds for Borrower as
debt that is being satised in the transaction. Examples of amounts to be paid
by the consumer at closing pursuant to the contract of sale include:
At a creditor’s option, specic seller credits may be disclosed as part of the Seller
Credits in the Calculating Cash to Close table or, reected in the applicable fee
amount disclosed in Loan Cost or Other Cost table. For example, if a creditor
knows that a seller will pay half of a $100 pest inspection fee, the creditor can either
disclose the fee amount as $50 in Loan Cost table or as $100 in the Loan Cost table
with a $50 Seller Credit in the Calculating Cash to Close table.
53 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
§ Charges for personal property to be acquired by the consumer,
§ Prorations for property taxes, and
§ Prorations for homeowner’s association dues.
Estimated Cash to Close
Estimated Cash to Close is calculated as the sum of the seven other
amounts disclosed in the Loan Estimate’s Calculating Cash to Close table.
(§ 1026.37(h)(1)(viii))
2.3.4 Alternative Calculating Cash To Close
Table for Transactions Without A Seller or
For Simultaneous Subordinate Lien Loans
An optional Alternative Calculating Cash to Close table can be disclosed for a
transaction without a seller. It can also be disclosed for a simultaneous subordinate
lien loan in a purchase transaction if the Closing Disclosure for the rst lien
transaction will disclose all required information related to the seller. (§ 1026.37(h)
(2); Comment 37(h)(2)-1)
This Alternative Calculating Cash to Close table
would be used in place of the table in Figure
19. (§ 1026.37(h)(2)) A creditor that uses the
optional Alternative Calculating Cash to Close
table must also use the alternative disclosure
provisions of the Alternative Costs at Closing
table on Loan Estimate page 1. (see section
2.2.4 above; Comment 37(h)(2)-1)
FIGURE 20: ALTERNATIVE CALCULATING CASH TO CLOSE TABLE OF THE LOAN ESTIMATE
If the Loan Estimate
for a loan discloses an
Alternative Calculating
Cash to Close table, the
Closing Disclosure for that
loan must also disclose an
Alternative Calculating
Cash to Close table. See
Section 3.4.2.
54 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Loan Amount
The amount disclosed as Loan Amount is the same amount disclosed as Loan
Amount on Loan Estimate page 1. (see section 2.2.2 above; § 1026.37(h)(2)(i))
Total Closing Costs
If the amount disclosed as the Total Closing Costs in the Other Costs table is
a positive number, disclose that amount as a negative number. If the amount
disclosed in the Total Closing Costs in the Other Costs table is a negative number,
disclose that amount as a positive number. (§ 1026.37(h)(2)(ii))
Estimated Payoffs and Payments
Estimated Payoffs and Payments is the total amount to be paid to third parties
not otherwise disclosed as items in the Loan Costs or Other Costs tables.
(§ 1026.37(h)(2)(iii)) Estimated Payoffs and Payments is disclosed as a negative
number unless the proceeds from a simultaneous subordinate lien loan and any
amounts entered as credits (i.e., amounts that will be paid with funds provided by
the consumer or amounts that will be disclosed in the Closing Costs Details table
and that will be paid by third parties) equal or exceed the total amount of other
payoffs and payments. (Comment 37(h)(2)(iii)-1 and 2.i) In that case, the Estimated
Payoffs and Payments is disclosed as a positive number.
Examples of the payoffs and payments to be made to third parties not otherwise
disclosed in the Loan Costs or Other Costs tables can include:
§ Payoffs of existing liens secured by the property such as mortgages, deeds of
trust, judgments that have attached to the property,
§ Mechanics’ and materialman’s liens,
§ Local, State, and Federal tax liens,
§ Payments of unsecured outstanding debts of the consumer,
§ Construction costs that are associated with the transaction and that the
consumer will be obligated to pay, and
§ Payments to other third parties for outstanding debts of the consumer
(excluding settlement services) as required to be paid as a condition for the
extension of credit. (Comment 37(h)(2)(iii)-1)
For a transaction that involves a rst lien loan disclosed using the optional table
and that also involves a simultaneous subordinate lien loan, the proceeds of the
55 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
simultaneous subordinate lien loan are included, as a positive number, in the total
amount disclosed as Payoffs and Payments on the Loan Estimate for the rst lien
loan. (Comment 37(h)(2)(iii)-2.i) The proceeds of a simultaneous subordinate lien
loan that will be applied to the rst lien loan may be included in the Payoffs and
Payments for the subordinate lien loan. (Comment 37(h)(2)(iii)-2.ii)
Estimated Cash to Close
The amount for the Estimated Cash to Close is the sum total of the amounts
disclosed as Loan Amount, Total Closing Costs, and Payoffs and Payments.
(§ 1026.37(h)(2)(iv)) Check boxes are used to disclose whether the Estimated
Cash to Close is either due from the consumer or will be paid to the consumer at
consummation. (Comment 37(h)(2)(iv)-1)
Estimated Closing Costs Financed
Closing Costs Financed is the sum of Loan Amount and Payoffs and Payments,
but only to the extent the amount is greater than zero and less than or equal to the
sum of Total Closing Costs. (§ 1026.37(h)(2)(v))
For example:
§ If the Loan Amount is $100,000, the Payoffs and Payments is -$80,000, and the
Total Closing Costs is $10,000; then the Closing Costs Financed would be $10,000.
§ If the Loan Amount is $100,000, the Payoff and Payments is -$95,000, and the
Total Closing Costs is $10,000; then the Closing Costs Financed would be $5,000.
§ If the Loan Amount is $100,000, the Payoffs and Payments is -$110,000 and the
Total Closing Costs is $10,000; then the Closing Costs Financed would be $0.
FIGURE 21: ADJUSTABLE PAYMENT (AP) TABLE OF THE LOAN ESTIMATE
56 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
2.3.5 Adjustable Payment (AP) Table
The Adjustable Payment (AP) Table is disclosed when the periodic principal and
interest payment may change after consummation, but not because of a change
to the interest rate, or the loan is considered to be a Seasonal Payment product.
(§ 1026.37(i)) For example, the AP Table is disclosed on a Fixed Rate loan with a
Step Payment feature that is not the result of a change to the interest rate. If the loan
does not contain these features, the AP Table is not disclosed. (Comment 37(i)-1)
The AP Table includes the following information (§ 1026.37(i)):
§ Whether there are Interest Only Payments, and, if so, the period during which
the Interest Only Payment would apply (§ 1026.37(i)(1));
§ Whether the amount of any periodic payment can be selected by the consumer
as an Optional Payment and, if so, the period during which the consumer can
select Optional Payments (§ 1026.37(i)(2));
§ Whether the loan is a Step Payment product and, if so, the period during which
the regular periodic payments are scheduled to increase (§ 1026.37(i)(3));
§ Whether the loan is a Seasonal Payment product, and, if so, the period during
which the periodic payments are not scheduled (§ 1026.37(i)(4));
§ A subheading of Monthly Principal and Interest Payments (§ 1026.37(i)(5)), that
also lists:
ú As First Change/Amount, the number of the payment that may change,
counting from the rst periodic payment due after consummation, and
the amount or range of the periodic principal and interest payment for
such payment (§ 1026.37(i)(5)(i));
ú The frequency of Subsequent Changes to the periodic payment
(§ 1026.37(i)(5)(ii)); and
ú The Maximum Payment that may be paid during the term of the loan with
the number of the rst periodic principal and interest payment that can
reach such Maximum Payment amount. (§ 1026.37(i)(5)(iii))
First Change/Amount
If the exact payment number of the rst payment adjustment is not known at the
time of the Loan Estimate, the earliest possible payment that may change must be
disclosed. (Comment 37(i)(5)-2)
57 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Monthly Principal and Interest Payments
The label “Monthly Principal and Interest Payments” can be changed to
reect a payment schedule that is not monthly, such as Biweekly or Annual.
(Comment 37(i)(5)-1)
Disclose any scheduled periodic payment that only covers some or all of the
interest that is due and not any principal as Monthly Principal and Interest
Payments, even though the AP Table refers to Monthly Principal and Interest
Payments. (Comment 37(i)(5)-5)
2.3.6 Adjustable Interest Rate (AIR) Table
The Adjustable Interest Rate (AIR) Table is disclosed when the loan’s interest rate
may increase after consummation. (§ 1026.37(j)) If the loan’s interest rate will not
increase after consummation, the AIR Table is not disclosed. (Comment 37(j)-1)
Because the interest rate for a Fixed Rate loan cannot change according to the
denition in the TILA-RESPA Rule, the AIR Table should never be disclosed with
a Fixed Rate loan.
The AIR Table includes the following information (§ 1026.37(j)):
§ As Index + Margin, the index upon which adjustments to the interest rate will be
based and the margin that is added to the index to determine the interest rate.
(§ 1026.37(j)(1))
§ For Step Rate products, the maximum amount of any adjustments to the interest
rate that are scheduled and pre-determined. (§ 1026.37(j)(2))
§ The Initial Interest Rate at consummation. (§ 1026.37(j)(3))
FIGURE 22: ADJUSTABLE INTEREST RATE (AIR) TABLE OF THE LOAN ESTIMATE
58 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
§ The Minimum/Maximum Interest Rate for the loan, after any introductory
period expires. (§ 1026.37(j)(4))
§ As Change Frequency (§ 1026.37(j)(5)):
ú For First Change, list the month when the rst interest rate change may
occur after consummation (§ 1026.37(j)(5)(i)), and
ú As Subsequent Changes, the frequency of interest rate adjustments after
the initial adjustment. (§ 1026.37(j)(5)(ii))
§ As Limits on Interest Rate Changes (§ 1026.37(j)(6)):
ú As First Change, the maximum possible change for the rst adjustment of
the interest rate after consummation (§ 1026.37(j)(6)(i)), and
ú As Subsequent Changes, the maximum possible change for subsequent
adjustments of the interest rate. (§ 1026.37(j)(6)(ii))
Index and Margin
The index must be described such that a consumer can reasonably identify it. For
example, LIBOR may be used instead of the London Interbank Offered Rate. The
margin should be disclosed as a percentage. For example, if the interest rate is
calculated by adding 4.25 to LIBOR, the margin should be disclosed as 4.25%.
(Comment 37(j)(1)-1)
Maximum/Minimum Interest Rate
The maximum interest rate that applies to the loan under applicable law, such as
State usury law, must be disclosed if the loan does not provide for a maximum
interest rate. (Comment 37(j)(4)-2)
The minimum interest rate that applies to the loan under applicable law must be
disclosed if the loan does not provide for a minimum interest rate. However, if
applicable law does not set a minimum interest rate, disclose the amount of the
margin as the minimum interest rate. (Comment 37(j)(4)-1)
59 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Change Frequency
Typically, the rst change month for the interest rate is scheduled in the terms
of the loan, but if the exact month is not known at the time the creditor provides
the Loan Estimate, the earliest possible month for the rst change to the interest
rate of the loan must be disclosed based on the best information available to the
creditor at the time the Loan Estimate is disclosed. (Comment 37(j)(5)-1)
Limits on Interest Rate Changes
The greatest limit on changes in the interest rate must be disclosed when more
than one limit applies to changes in the interest rate. For example, if the initial
interest rate adjustment is capped at 2%, the second adjustment is capped at 2.5%,
and all subsequent adjustments are capped at 3%, 3% is disclosed as Subsequent
Changes. (Comment 37(j)(6)-1)
60 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
2.4 Loan Estimate (page 3)
FIGURE 23: LOAN ESTIMATE (PAGE 3)
section 2.4.1
section 2.4.2
section 2.4.3
section 2.4.4
61 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Contact Information, a Comparisons table, an Other Considerations table, and, if
desired, a place for the consumer to sign to acknowledge receipt of the Loan Estimate
are disclosed on page 3 of the Loan Estimate.
2.4.1 Contact Information
Disclose the Name and NMLS/___License ID number for the creditor and mortgage
broker, if any, and the individual loan ofcer of both. The NMLS/___License ID number
should be the same as that identied on the note and other documents. (§1026.36(g))
Also, disclose the Email and/or Phone number of the individual loan ofcer. The
person identied as the individual loan ofcer must be the primary contact for the
consumer. (§ 1026.37(k))
2.4.2 Comparisons
The Comparisons table discloses information related to the costs of the loan In Five
Years, the Annual Percentage Rate (APR), and the Total Interest Percentage (TIP).
FIGURE 24: CONTACT INFORMATION TABLE OF THE LOAN ESTIMATE
FIGURE 25: COMPARISONS TABLE OF THE LOAN ESTIMATE
62 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
In 5 Years
In 5 Years includes the following information:
§ The total amount the consumer will have paid in principal, interest, mortgage
insurance, and loan costs paid through the end of the 60th month after the due
date of the rst periodic payment; and
§ The amount of principal paid through the end of the 60th month after the due
date of the rst periodic payment. (§ 1026.37(l)(1))
Annual Percentage Rate (APR)
Disclose the APR, together with a brief descriptive statement, in the Comparisons
table on page 3. For information on how to calculate the APR, see § 1026.22 and
appendix J to Regulation Z. (§ 1026.37(l)(2))
Total Interest Percentage (TIP)
The TIP is the total amount of interest that the consumer will pay over the loan
term, expressed as a percentage of the Loan Amount. (§ 1026.37(l)(3)) The TIP
includes prepaid interest that the consumer will pay, but does not include prepaid
interest that someone other than the consumer will pay. If prepaid interest is
disclosed as a negative number, the negative value of the prepaid interest must be
included in the calculation of the TIP. (Comment 37(l)(3)-1).
For example, if the Loan Amount is $100,000 and the total amount of interest that
the consumer will pay over the Loan Term is $50,000, then the TIP is 50%.
63 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
2.4.3 Other Considerations
Other Considerations includes the following information:
§ Appraisal,
§ As to an assumption, whether the subsequent purchaser of the property can
assume the loan on its original terms,
§ At the option of the creditor, a statement that homeowner’s insurance is
required and that the consumer may choose the provider,
§ A statement detailing any amount that may be imposed for a late payment,
§ A statement about the nature of a renance of the loan in the future,
§ A statement whether the creditor intends to service the loan or transfer it to
another servicer, and
§ For Renance transactions, a statement relating to State law protections against
liability after foreclosure, and
§ At the option of the creditor, for transactions involving new construction, where
the creditor reasonably expects that settlement will occur 60 days or more
after the provision of the Loan Estimate, a clear and conspicuous statement
that the creditor may issue a revised disclosure any time prior to 60 days before
consummation. (§ 1026.37(m))
FIGURE 26: OTHER CONSIDERATIONS TABLE
64 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
Appraisal
A statement concerning the Appraisal must be provided for:
§ Higher-priced Mortgage Loans, and
§ Loans covered by the Equal Credit
Opportunity Act. (§ 1026.37(m)(1))
If the loan is a Higher-priced Mortgage
Loan, but is not covered by the Equal Credit
Opportunity Act, the word “promptly” may be
removed from the language provided on the
model form. (Comment 37(m)(1)-1)
Late Payment
An increase in the interest rate triggered by a Late Payment is a charge for late
payment. The following are not charges for Late Payment:
§ The right of acceleration,
§ Fees imposed for actual collection costs,
§ Referral and extension charges, or
§ Interest charged at the contract rate after the payment due date.
(Comment 37(m)(4)-1)
2.4.4 Servicing
The Servicing disclosure is a statement about the creditor’s intentions regarding
servicing. (§1026.37(m)(6)) The disclosure is based on the intent at the time the
Loan Estimate is issued. (Comment 37(m)(6)-1) Intent to transfer servicing of the
loan includes:
§ The intent to transfer servicing immediately after consummation,
§ The intent to transfer servicing anytime throughout the life of the loan, and
§ The intent to transfer servicing to a subsidiary or afliate.
A Higher-priced Mortgage
Loan is dened at
12 CFR 1026.35.
Coverage of the Equal
Credit Opportunity
Act is discussed in
Regulation B, 12 CFR
Part 1002, Supplement
I – Ofcial Interpretations,
Comment 1(a)-1.
65 TILA-RESPA INTEGRATED DISCLOSURE | LOAN ESTIMATE
2.4.5 Conrm Receipt
The consumer is not required to sign the Loan Estimate. The creditor may add a
signature statement and have the consumer sign page 3 of the Loan Estimate in
order to Conrm Receipt of the Loan Estimate by the consumer. If used by the
creditor, the signature statement must contain the exact language from the model
form. (§ 1026.37(n)(1))
If the Conrm Receipt table is not used by a creditor, a statement about Loan
Acceptance must be included at the end of the Other Consideration table that
states, “You do not have to accept this loan because you have received this form or
signed a loan application.” (§ 1026.37(n)(2))
FIGURE 27: CONFIRM RECEIPT TABLE OF THE LOAN ESTIMATE
When credit is extended to a trust established for tax or estate planning purposes
and a signature line is included in the disclosure, a creditor may insert the trustee’s
name under the appropriate signature line with a designation that the trustee is
serving in its capacity as a trustee.
66 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3. Closing Disclosure
3.1 General Requirements
3.1.1 Issuance and Delivery
A Closing Disclosure must be provided to the consumer at least three business days
prior to consummation. (see section 3.1.5 for more information; § 1026.19(f)(1)(ii))
3.1.2 Corrected Closing Disclosure
Prior to consummation, an additional three-business-day waiting period applies
when there are changes to the Closing Disclosure that result in an increase to the
APR that becomes inaccurate, the addition of a Prepayment Penalty, or the change
of a loan Product. (§ 1026.19(f)(2)(ii); Comment 19(f)(2)(ii)-1)
For other changes prior to consummation, provide to the consumer the updated
information in a corrected Closing Disclosure no later than consummation. Upon
the consumer’s request, by the business day before consummation, a creditor must
permit the consumer to inspect the Closing Disclosure, although the creditor may
omit items related only to the seller’s transaction. (§ 1026.19(f)(2)(i))
In addition, provide a corrected Closing Disclosure if an event related to the
settlement occurs during the 30-calendar-day period after consummation that
causes the Closing Disclosure to become inaccurate and results in a change
to an amount paid by the consumer from what was previously disclosed.
(§ 1026.19(f)(2)(iii); Comment 19(f)(2)(iii)-1) Deliver or place in the mail the
corrected Closing Disclosure no later than 30 calendar days after receiving
information sufcient to establish changes to the amount paid by the consumer.
(§ 1026.19(f)(2)(iii))
67 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.1.3 Use of Compliance Guide
Please see the Compliance Guide for additional information on details of these
requirements. The Compliance Guide also discusses the good faith disclosure of
settlement costs, limitations on changes to those amounts at consummation, and other
information concerning the Closing Disclosure. The information that follows discusses
how to complete the Closing Disclosure. Samples of completed Closing Disclosures
can be found at consumernance.gov/policy-compliance/guidance/implementation-
guidance/tila-respa-disclosure-rule/.
3.1.4 Rounding
Dollar amounts must be rounded to the nearest whole dollar where noted in the
TILA-RESPA Rule. (§ 1026.38(t)(4)(i)) If an amount must be rounded but is composed
of other amounts that are not rounded, use the unrounded amounts in calculating the
total and then round the nal sum. Conversely, if an amount is required to be rounded
and is composed of rounded amounts, use the rounded amounts in calculating the
total. (Comment 38(t)(4)-2)
Percentage amounts are disclosed by rounding to three decimal places and then
dropping any trailing zeros that occur to the right of the decimal place., except where
otherwise noted in the TILA-RESPA Rule. (§ 1026.38(t)(4)(ii); Comment 38(t)(4)-2)
3.1.5 Consummation
Consummation is not the same thing as closing or settlement. Consummation occurs
when the consumer becomes contractually obligated to the creditor on the loan, not,
for example, when the consumer becomes contractually obligated to a seller on a real
estate transaction. (§ 1026.2(a)(13))
The point in time when a consumer becomes contractually obligated to the creditor
on the loan depends on applicable State law. (§ 1026.2(a)(13); Comment 2(a)(13)-1)
Creditors and settlement agents should verify the applicable State laws to determine
when consummation will occur, and make sure delivery of the Closing Disclosure
occurs at least three business days before this event.
This Guide uses references to the legal obligation, which includes
the promissory note plus any other agreements between the
creditor and consumer concerning the extension of credit.
68 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.2 Closing Disclosure (page 1)
F I G UR E 28: CLOSING DISCLOSURE (PAGE 1)
sec tion 3.2.1
section 3.2.2
section 3.2.3
section 3.2.4
69 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
General information, the Loan Terms table, the Projected Payments table, and the
Costs at Closing table are disclosed on the rst page of the Closing Disclosure.
(§ 1026.38(a), (b), (c), (d))
3.2.1 General Information
At the top of page 1 of the Closing Disclosure, disclose Closing Information,
Transaction Information, and Loan Information. (§ 1026.38(a))
Closing Information
For Closing Information, disclose the following information:
§ The Date Issued, which is the date the Closing Disclosure is delivered or placed
in the mail to the consumer (not the date the form is actually printed),
§ The Closing Date, which is the date of consummation (see section 3.1.5),
§ The Disbursement Date, which is the date funds are disbursed.
ú In a Purchase other than a simultaneous subordinate lien transaction, the
Disbursement Date is the date that the cash to close amount is expected
to be paid to the consumer or seller, as applicable.
ú In a simultaneous subordinate lien transaction or in a non-purchase
transaction, the Disbursement Date is the date that some of all of the
Loan Amount is expected to be paid to the consumer or a third party
other than the Settlement Agent.
§ The name of the Settlement Agent, which is the name of the entity, not the
individual agent conducting the closing,
FIGURE 29: CLOSING INFORMATION TABLE OF THE CLOSING DISCLOSURE
70 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
§ The File #, which is the le number assigned to the transaction by the Settlement
Agent (the TILA-RESPA Rule does not prescribe how the settlement agent creates
the le number; the le number, for example, may be alphanumeric),
§ The Property address or location, and
§ For the Property:
ú Sale Price,
ú Appraised Prop. Value, or
ú Estimated Prop. Value. (§ 1026.38(a)(3))
The Appraised Prop. Value of the Property is disclosed for transactions without
a seller if a creditor has obtained an appraisal of the Property. (§ 1026.38(a)(3)
(vii)(B)) If a creditor has obtained more than one appraisal of the Property, the
creditor discloses the value set forth in the appraisal that the creditor used to
approve the loan.
The Estimated Prop. Value of the Property is disclosed if the creditor has
not obtained an appraisal for a transaction without a seller. If the creditor
has prepared its own estimate of value for purposes of approving the credit
transaction, it must use that value when disclosing the Estimated Prop. Value,
rather than an estimate of value from a consumer. (Comment 38(a)(3)(vii)-1) If the
creditor has prepared more than one estimate of value, it discloses the value in the
estimate it used to approve the transaction. (Comment 38(a)(3)(vii)-1)
If a creditor considers the value of improvements to the Property when approving
a construction loan where there is no seller, it must include the value of the
improvements when disclosing the Appraised Prop. Value or Estimated Prop.
Value. (Comment 38(a)(3)(vii)-1)
Transaction Information
FIGURE 30: TRANSACTION INFORMATION TABLE OF THE CLOSING DISCLOSURE
71 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
For Transaction Information, disclose the name of the seller (if any) as Seller, and
the name of the creditor as Lender. (§ 1026.38(a)(4)) Disclose the name(s) and
address(es) of the person(s) to whom credit is extended as Borrower. Do not
disclose the names or addresses of other consumers. (Comment 38(a)(4)-4)
The name and address of each person who is a seller in the transaction and each
person to whom credit is extended must be disclosed, except that the name and
address for Seller may be left blank on the Closing Disclosure for a simultaneous
subordinate lien loan if the Closing Disclosure for the rst lien loan will disclose the
entirety of the seller’s transaction. The name and address of the Seller is also left
blank for transactions without a seller. (Comment 38(a)(4)-2) If there is not enough
space to show the name and address of all such persons, an additional page may
be used and appended to the end of the Closing Disclosure. (Comment 38(a)(4)-1)
Loan Information
For Loan Information, disclose the Loan Term, Purpose, Product, Loan Type,
the creditor’s loan identication number as Loan ID #, and mortgage insurance
case number, if required by the creditor, as MIC # under the Loan Information
subheading. (§ 1026.38(a)(5))
The information disclosed for Loan Term, Purpose, Product, Loan Type, and Loan
ID # are determined by the same denitions for those items on the Loan Estimate.
(see section 2.2.1 above) These items should be updated to reect the terms of the
legal obligation at consummation. (Comment 38(a)(5)-1)
FIGURE 31: LOAN INFORMATION TABLE OF THE CLOSING DISCLOSURE
72 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.2.2 Loan Terms
The Loan Terms table on the Closing Disclosure discloses the same information
required to be disclosed on the Loan Estimate (see section 2.2.2 above), updated
to reect the terms of the legal obligation at consummation. (§ 1026.38(b))
3.2.3 Projected Payments
Projected Payments
Loan Terms
CLOSING DISCLOSURE PAGE 1 OF 5 • LOAN ID # 0000000000
Payment Calculation
Principal & Interest
Mortgage Insurance
Estimated Escrow
Amount can increase over time
Estimated Total
Monthly Payment
Estimated Taxes, Insurance
& Assessments
Amount can increase over time
See page 4 for details
See Escrow Account on page 4 for details. You must pay for other property
costs separately.
This estimate includes In escrow?
Property Taxes
Homeowner’s Insurance
Other:
Can this amount increase after closing?
Loan Amount
Interest Rate
Monthly Principal & Interest
See Projected Payments below for your
Estimated Total Monthly Payment
Does the loan have these features?
Prepayment Penalty
Balloon Payment
Closing Costs
Includes $5,877.00 in Loan Costs + $7,642.43 in Other Costs – $0
in Lender Credits.
See page 2 for details.
Cash to Close Includes Closing Costs. See Calculating Cash to Close on page 3 for details.
Costs at Closing
Transaction Information
Borrower
Seller
Lender
Loan Information
Loan Term
Purpose
Product
Loan Type Conventional FHA
VA _____________
Loan ID #
MIC #
Closing Information
Date Issued
Closing Date
Disbursement Date
Settlement Agent
File #
Property
Sale Price
This form is a statement of nal loan terms and closing costs. Compare this
document with your Loan Estimate.
Closing Disclosure
FIGURE 33: LOAN TERMS TABLE OF THE CLOSING DISCLOSURE
Projected Payments
Loan Terms
CLOSING DISCLOSURE PAGE 1 OF 5 • LOAN ID # 0000000000
Payment Calculation
Principal & Interest
Mortgage Insurance
Estimated Escrow
Amount can increase over time
Estimated Total
Monthly Payment
Estimated Taxes, Insurance
& Assessments
Amount can increase over time
See page 4 for details
See Escrow Account on page 4 for details. You must pay for other property
costs separately.
This estimate includes In escrow?
Property Taxes
Homeowner’s Insurance
Other:
Can this amount increase after closing?
Loan Amount
Interest Rate
Monthly Principal & Interest
See Projected Payments below for your
Estimated Total Monthly Payment
Does the loan have these features?
Prepayment Penalty
Balloon Payment
Closing Costs Includes $5,877.00 in Loan Costs + $7,642.43 in Other Costs – $0
in Lender Credits.
See page 2 for details.
Cash to Close Includes Closing Costs. See Calculating Cash to Close on page 3 for details.
Costs at Closing
Transaction Information
Borrower
Seller
Lender
Loan Information
Loan Term
Purpose
Product
Loan Type Conventional FHA
VA _____________
Loan ID #
MIC #
Closing Information
Date Issued
Closing Date
Disbursement Date
Settlement Agent
File #
Property
Sale Price
This form is a statement of nal loan terms and closing costs. Compare this
document with your Loan Estimate.
Closing Disclosure
FIGURE 32: LOAN TERMS TABLE OF THE CLOSING DISCLOSURE
73 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
The Projected Payments table on the Closing Disclosure discloses the same
information required to be disclosed on the Projected Payments table disclosed
on the Loan Estimate (see section 2.2.3 above), updated to reect the terms of the
legal obligation at consummation. (§ 1026.38(c); Comment 38(c)-1)
However, there are two differences in the Closing Disclosure:
§ For loans subject to RESPA, the amounts disclosed under the Estimated Escrow
and Estimated Taxes, Insurance, and Assessments sections on the Closing
Disclosure must be determined under the escrow account analysis described
in Regulation X, 12 C.F.R. §1024.17. Loans not subject to RESPA also have this
option on the Closing Disclosure.
§ The Closing Disclosure refers the consumer to page 4 of the Closing Disclosure,
instead of the reference to page 2 that is on the Loan Estimate.
3.2.4 Costs at Closing
The Costs at Closing table discloses:
§ The total amount disclosed as Total Closing Costs in the Other Costs table
disclosed on page 2 of the Closing Disclosure. Total Closing Costs are also
itemized to show the Total Loan Costs, the Total Other Costs, and Lender
Credits from the Total Closing Costs subheading disclosed on page 2 of the
Closing Disclosure (§ 1026.38(d)(1)(i)), and
§ The estimated amount of cash the consumer will pay at, or receive from, closing
as Cash to Close. This amount is the same as the Cash to Close calculated
in the Calculating Cash to Close table on page 3 of the Closing Disclosure.
(§ 1026.37(d)(1)(ii))
Projected Payments
Loan Terms
CLOSING DISCLOSURE PAGE 1 OF 5 • LOAN ID # 0000000000
Payment Calculation
Principal & Interest
Mortgage Insurance
Estimated Escrow
Amount can increase over time
Estimated Total
Monthly Payment
Estimated Taxes, Insurance
& Assessments
Amount can increase over time
See page 4 for details
See Escrow Account on page 4 for details. You must pay for other property
costs separately.
This estimate includes In escrow?
Property Taxes
Homeowner’s Insurance
Other:
Can this amount increase after closing?
Loan Amount
Interest Rate
Monthly Principal & Interest
See Projected Payments below for your
Estimated Total Monthly Payment
Does the loan have these features?
Prepayment Penalty
Balloon Payment
Closing Costs Includes $5,877.00 in Loan Costs + $7,642.43 in Other Costs – $0
in Lender Credits.
See page 2 for details.
Cash to Close Includes Closing Costs. See Calculating Cash to Close on page 3 for details.
Costs at Closing
Transaction Information
Borrower
Seller
Lender
Loan Information
Loan Term
Purpose
Product
Loan Type Conventional FHA
VA _____________
Loan ID #
MIC #
Closing Information
Date Issued
Closing Date
Disbursement Date
Settlement Agent
File #
Property
Sale Price
This form is a statement of nal loan terms and closing costs. Compare this
document with your Loan Estimate.
Closing Disclosure
FIGURE 34: COSTS AT CLOSING TABLE OF THE CLOSING DISCLOSURE
74 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Alternative Costs at Closing
Disclose the Alternative Costs at Closing table for a transaction without a seller or
for a simultaneous subordinate lien transaction where the Alternative Estimated
Costs at Closing table was disclosed on the Loan Estimate. (see section 2.2.4
above; § 1026.38(d)(2)) Note that the Alternative Costs at Closing table must be
used on the Closing Disclosure if it was used on the Loan Estimate.
Check boxes are used in order to indicate whether the amount of cash is due from
or paid to the consumer at consummation. (Comment 38(d)(2)-2) If the Alternative
Costs at Closing table is used, then the Alternative Calculating Cash to Close on
page 3 of the Closing Disclosure must also be used. (Comment 38(d)(2)-1)
FIGURE 35: ALTERNATIVE COSTS AT CLOSING TABLE OF THE CLOSING DISCLOSURE
75 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.3 Closing Disclosure (page 2)
FIGURE 36: CLOSING DISCLOSURE (PAGE 2)
section 3.3.1
section 3.3.2
76 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
The number of items in the Loan Costs and Other Costs tables can be expanded
and deleted to ensure that the Loan Costs and Other Costs tables t onto page 2
of the Closing Disclosure. (§ 1026.38(t)(5)(iv)(A)) However, items that are required
to be disclosed, even if they are not needed (such as Points in the Origination
Charges subheading), cannot be deleted. (Comment 38(t)(5)(iv)-1)
The amounts paid by the consumer, seller and others for each item are disclosed.
For items paid by the consumer or seller, the amount that is paid at or before
closing is also entered into the applicable columns. (§ 1026.38(f)) To the extent that
an individual item is paid by different parties to the transaction and both at and
before closing, the amounts associated with an item can be entered in multiple
columns. (§ 1026.38(f))
The Paid by Others column is for charges not paid by the consumer or seller. This
can include any third party, such as the creditor, an employer, a real estate agent,
or other third party. To denote that charges are paid by the creditor pursuant to
the legal obligation between the consumer and creditor, an L in parentheses “(L)”
may be placed to the left of the amount. (Comment 38(f)-1)
The Loan Costs and Other Costs tables can be disclosed on two separate pages
of the Closing Disclosure. (§ 1026.38(t)(5)(iv)(B)) When used, these pages are
numbered page 2a and 2b. (Comment 38(t)(5)(iv)-3) For an example of this
permissible change to the Closing Disclosure, see form H-25(H) of appendix H to
Regulation Z.
77 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.3.1 Loan Costs
The items to be disclosed in the Loan Costs table should generally be the same
as they were disclosed on the Loan Estimate (see section 2.3.1 above), updated
to reect the terms of the legal obligation at consummation, except as specically
discussed below. (§ 1026.38(f))
Origination Charges - Loan Originator Compensation
Loan originator compensation is disclosed as Origination Charges, even
though loan originator compensation is not disclosed on the Loan Estimate.
Compensation from the consumer to a third-party loan originator is designated
as Borrower-Paid At Closing or Before Closing on the Closing Disclosure.
(§ 1026.38(f)(1); Comment 38(f)(1)-2)
Compensation from the creditor to a third-party loan originator is designated as
Paid by Others on the Closing Disclosure. (Comment 38(f)(1)-2) A designation
of (L) can be listed with the amount to indicate that the creditor pays the
compensation at consummation. The amount of compensation from the creditor to
FIGURE 37: LOAN COSTS TABLE OF THE CLOSING DISCLOSURE
78 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
the third party loan originator is the dollar value of salaries, commissions, and any
nancial or similar compensation provided by the creditor and considered to be
points and fees under 12 CFR 1026.32(b)(1)(ii). (Comment 38(f)(1)-3) Compensation
to individual loan originators is not calculated or disclosed on the Closing
Disclosure. (Comment 38(f)(1)-3)
Services the Consumer Did and Did Not Shop For
Items that the consumer could have shopped for, but did not, are disclosed in the
Services Borrower Did Not Shop For subheading, regardless of where the item
was disclosed on the Loan Estimate. (§ 1026.38(f)(2))
When a consumer chooses a provider that was on the Written List of Providers
for a service, that service is listed as Services Borrower Did Not Shop For in the
Closing Disclosure Loan Costs table. (§ 1026.38(f)(2); Comment 38(f)(3)-1) For
example, if the consumer could have shopped for the ood determination fee
on the Loan Estimate, but chose a provider that was on the creditor’s Written List
of Providers, that charge is listed as Services Borrower Did Not Shop For even
though the creditor did not require that service provider. Items disclosed as
Services Borrower Did Shop For and Services Borrower Did Not Shop For are
re-alphabetized when an item is added to or removed from the Closing Disclosure,
when compared to the Loan Estimate.
Total Loan Costs
The amounts that are designated as Borrower-Paid At or Before Closing are
subtotaled as Total Loan Costs (Borrower-Paid). (§ 1026.38(f)(5)) The amounts
that are designated Seller-Paid At or Before Closing and Paid by Others are not
subtotaled as Total Loan Costs (Borrower-Paid). (Comment 38(f)(5)-1)
79 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.3.2 Other Costs
The items to be disclosed in the Other Costs table should be disclosed as they
would be disclosed on the Loan Estimate (see section 2.3.2 above), updated
to reect the terms of the legal obligation and real estate transaction at
consummation, except as specically discussed below. (§ 1026.38(g))
Taxes and Other Government Fees
In the shaded column of the line with the subheading Taxes and Other
Government Fees, disclose the total amount expected to be paid by the consumer
to State or local governments for Recording Fees and Transfer Taxes at or before
closing. (§ 1026.38(g)(1))
In the appropriate columns of the next line, disclose the total amount expected to
be paid to State or local governments for recording the deed, security instruments,
and any other instrument or document recorded to preserve marketable title or
to perfect the creditor’s security interest in the Property. Also, on this line (which
includes the label Recording Fees), disclose the total fees expected to be paid
F I G UR E 38: OTHER COSTS TABLE OF THE CLOSING DISCLOSURE
80 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
to the State or local government for recording deeds after the word “Deed” and,
separately, disclose the total fees expected to be paid to State or local government
for recording security instruments after the word “Mortgage.” (Comment 38(g)(1)-3)
An itemization of Transfer Taxes paid by the consumer and the seller is disclosed
under the heading Taxes and Other Government Fees, instead of the sum total
of Transfer Taxes to be paid by the consumer. (§ 1026.38(g)(1)) This itemization is
disclosed after the disclosure of the recording fees. The name of the government
entity assessing the fee (which may not necessarily be the payee of the check cut
by the settlement agent) is provided on the Closing Disclosure, unlike on the Loan
Estimate. Itemize each Transfer Tax and each government entity, because multiple
taxes may be assessed by each governmental entity. (Comment 38(g)(1)-2)
Prepaids
Prepaids are items to be paid by the consumer in advance of the rst scheduled
payment of the loan. (§ 1026.38(g)(2)) Prepaids include:
§ Homeowner’s Insurance Premium,
§ Mortgage Insurance Premium,
§ Prepaid Interest,
§ Property Taxes, and
§ A maximum of three additional items.
Each item must include the applicable time period covered by the amount to be paid
by the consumer and the total amount to be paid.
If Homeowner’s Insurance premiums, Mortgage Insurance premiums, Prepaid
Interest, or Property Taxes are not applicable to the loan, the inapplicable lines
should not be deleted. (Comments 38(g)(2)-1 and 37(g)(2)-4)
Instead:
§ If there are no prepaid Homeowner’s Insurance premiums, Mortgage Insurance
premiums, or Property Taxes associated with the loan, the time period, daily
amount, and percentage used in the labels should be left blank. (Comment 37(g)
(2)-4)
If no Prepaid Interest will be collected at consummation, the amount should be
disclosed as “$0.00.” (Comment 38(g)(2)-3)
81 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Initial Escrow Payment at Closing
Property Taxes paid during different time periods can be disclosed as separate
items. (§ 1026.38(g)(3)) For example, general property taxes assessed for January 1
to December 31 and property taxes to fund schools for November 1 to October 31
can be disclosed as separate items. (Comment 38(g)(3)-3)
The last item disclosed in the Initial Escrow Payment at Closing is the Aggregate
Adjustment. (§ 1026.38(g)(3)) The Aggregate Adjustment is calculated under
Regulation X. (§ 1024.17(d)(2); Comment 38(g)(3)-2)
Other
Items are disclosed as Other to reect costs incurred by the consumer
or seller that were not required to be disclosed on the Loan Estimate.
(§ 1026.38(g)(4); Comment 38(g)(4)-1) These costs include:
§ Real estate brokerage fees,
§ Homeowner or condominium association fees paid at consummation,
§ Home warranties,
§ Inspection fees, and
§ Other fees paid at closing that are not required by the creditor or otherwise
required to be disclosed elsewhere on the Closing Disclosure.
The amount of an earnest money deposit does not affect the amount of real
estate commissions paid by the consumer or seller on the Closing Disclosure,
even if the earnest money deposit is held by the real estate brokerage.
(Comment 38(g)(4)-1 and -4)
Total Other Costs and Total Closing Costs
The total of all closing costs paid by the consumer, reduced by the Lender Credit,
is disclosed as Total Closing Costs (Borrower-Paid). (§ 1026.38(h)(1)) The total
of items designated as Borrower-Paid At or Before Closing, Seller-Paid At or
Before Closing, and Paid by Others are disclosed as Closing Cost Subtotals.
(§ 1026. 38(h)(2)) Lastly, the total amount of Lender Credits, if any, are disclosed
and designated as Borrower-Paid At Closing. (§ 1026.38(h)(3))
82 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Lender Credits
All general lender credits, regardless of their reason or source, are included as
Lender Credits. (Comment 38(h)(3)-1) However, if the lender credit is attributable
to a specic charge listed on Closing Disclosure page 2, then the amount is
listed with the item and designated as Paid by Others. (Comment 38(h)(3)-1) A
designation of (L) can be listed with the amount to indicate that the creditor pays
the item at consummation.
A creditor may include the amount of any offset to resolve an excess charge by
the creditor as a Lender Credit. (§ 1026.38(h)(3)) If the excess charge is refunded
through a Lender Credit, a statement that such an amount is paid by the creditor
to offset an excess charge is also included as part of Lender Credits. (Comment
38(h)(3)-2; see form H-25(F) of appendix H to Regulation Z for an example of this
statement) See also Section 3.4.1 of this Guide for information on disclosing an
excess charge refunded using a principal reduction.
83 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.4 Closing Disclosure (page 3)
FIGURE 39: CLOSING DISCLOSURE (PAGE 3)
section 3.4.1
sections 3.4.3,
3.4.4, and 3.4.5
84 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
On page 3 of the Closing Disclosure, the Calculating Cash to Close table and
Summaries of Transaction table are disclosed. For transactions without a seller or
for simultaneous subordinate lien loans (if the Closing Disclosure for the rst lien
loan will disclose the entirety of the seller’s transaction), a Payoffs and Payments
table may be substituted for the Summaries of Transactions table and placed
before the Alternative Calculating Cash to Close table. (See Figure 40; form
H-25(J) of appendix H to Regulation Z)
FIGURE 40: ALTERNATIVE CLOSING DISCLOSURE (PAGE 3)
section 3.4.2
85 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.4.1 Calculating Cash to Close
The Calculating Cash to Close table has nine
items listed in the table:
§ Total Closing Costs,
§ Closing Costs Paid Before Closing,
§ Closing Costs Financed (Paid from your Loan
Amount),
§ Down Payment/Funds from Borrower,
§ Deposit,
§ Funds for Borrower,
§ Seller Credits,
§ Adjustments and Other Credits, and
§ Cash to Close.
The table has three columns to disclose the amount for each item as it was
disclosed on the Loan Estimate (see section 2.3.3 above), the Final amount for the
item, and an answer to the question Did this change? (§ 1026.38(i))
The amounts disclosed in the Loan Estimate column are the same as the
amounts disclosed on the most recent Loan Estimate provided to the consumer.
(§ 1026.38(i)(1)(i), (3)(i), (4)(i), (5)(i), (6)(i), (7)(i), (8)(i), (9)(i)) The amounts disclosed
in the Loan Estimate column are rounded to the nearest dollar in order to match
FIGURE 41: CALCULATING CASH TO CLOSE TABLE OF THE CLOSING DISCLOSURE
The amounts in the
Calculating Cash to Close
table or the Alternative
Calculating Cash to Close
table are disclosed based
on the best information
reasonably available to the
creditor at the time that
disclosure is provided but
are not, in and of themselves,
subject to good faith analysis
under § 1026.19(e)(3).
Accordingly, the good faith
analysis under § 1026.19(e)(3)
cannot be determined based
on a change in an amount
in either of these tables,
and must be separately
determined.
86 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
the corresponding amount disclosed on the Loan Estimate’s Calculating Cash to
Close table. (Comment 38(i)-2)
Generally, the amounts in the Final column are calculated using the same methods
that were used for the Calculating Cash to Close table on the Loan Estimate, and
must be based on the best information reasonably available to the creditor at the
time that the Closing Disclosure is provided to the consumer. (Comment 38(i)-2)
When the answer to the question Did this change? is Yes, indicate where the
consumer can nd the amounts that have changed on the Loan Estimate. If the
Seller Credit amount changed and the change is attributable only to general seller
credits, the creditor may disclose “See Seller Credits in Section L.” (Comment
38(i)-3) See Comment 38(i)(7)(iii)(A)-1 for additional statements a creditor may use
if the Seller Credit amount changes. Examples of language for disclosing changes
to other items are found in example form H-25(B) in appendix H of Regulation Z.
Total Closing Costs
In the Final column, Total Closing Costs is the same amount as the amount
disclosed as Total Closing Costs (Borrower-Paid) on page 2 of the Closing
Disclosure. (see section 3.2.4 above; § 1026.38(i)(1)(ii)) When the amount in the
Final column is different from the amount in the Loan Estimate column, indicate
that the consumer should see the Total Loan Costs or Total Other Costs tables, as
applicable, on page 2 of the Closing Disclosure. (§ 1026.38(i)(1)(iii)(A)(2))
Increases in Total Closing Costs That Exceed the Legal Limits
When the increase in Total Closing Costs exceeds the legal limits, disclose a
statement that an increase in closing costs exceeds the legal limits by the dollar
amount of the excess in the Did this change? column. (§ 1026.38(i)(1)(iii)(A)(3)) If
a creditor will provide a lender credit to the consumer for the excess amount, the
creditor must include a statement directing the consumer to the Lender Credit
on page 2. If a creditor will reduce the amount of the principal to offset the excess
amount, the creditor must include a statement informing the consumer the creditor
is providing a principal reduction to offset the charges that exceed the legal limit.
(Comment 38(i)(1)(iii)(A)-3)
When determining whether an amount changed, use the actual, non-rounded
estimate that would have been shown on the Loan Estimate if the amount had been
shown to two decimal places. (Comment 38(i)-2)
87 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Closing Costs Paid Before Closing
The amount disclosed in the Loan Estimate column for the Closing Costs Paid
Before Closing item is $0. (§ 1026.38(i)(2)(i)) The Final column should disclose the
same amount designated as Borrower-Paid Before Closing in the Closing Costs
Subtotals of the Closing Cost Details table on page 2 of the Closing Disclosure.
3.4.2 Alternative Calculating Cash to Close
Table For Transaction Without a Seller or
for Simultaneous Subordinate Lien Loans
Disclose an Alternative Calculating Cash to Close table for a transaction without
a seller or for a simultaneous subordinate lien transaction if the Alternative
Calculating Cash to Close table was used on the Loan Estimate.
FIGURE 42: ALTERNATIVE CALCULATING CASH TO CLOSE TABLE OF THE CLOSING
DISCLOSURE
Principal reductions that occur immediately or very soon after closing must be
disclosed in the Summaries of Transactions table or in the Payoffs and Payments
table, as applicable. The disclosure must include the following elements: (1) the
amount of the principal reduction; (2) the phrase “principal reduction” or a similar
phrase; (3) if disclosed in the Payoffs and Payments table, the name of the payee;
(4) if the principal reduction is not paid from closing funds, the phrase “Paid Outside
Closing” or “P.O.C.” and the name of the party making the payment; and (5) if
applicable, a statement that the principal reduction is being provided to offset
charges that exceed the legal limits (using any language that satises the clear and
conspicuous standard). If a principal reduction is not paid from closing funds, it is
not included when computing the total for the Summaries of Transactions table or
when calculating total Payoffs and Payments or Cash to Close. (Comment 38-4)
For additional guidance on disclosing principal reductions, see Comment 38-4.
88 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
If the settlement agent uses the Alternative Calculating Cash to Close table for
a simultaneous subordinate lien transaction, the Closing Disclosure for the rst
lien loan must disclose the entirety of the seller’s transaction. Therefore, any
contributions from the seller to the subordinate lien loan must be included in the
Summaries of Transactions table on the Closing Disclosure for the rst lien loan.
The seller contributions are also disclosed in the Payoff and Payments table on the
subordinate lien loan’s Closing Disclosure. (Comment 38(k)(2)(vii)-1)
The Alternative Calculating Cash to Close table has ve items listed in the table:
§ Loan Amount,
§ Total Closing Costs,
§ Closing Costs Paid Before Closing,
§ Total Payoffs and Payments, and
§ Cash to Close.
The table has three columns to disclose the amount for each item as it was
disclosed on the Loan Estimate, the Final amount for the item, and an answer to
the question Did this change? (§ 1026.38(e))
In addition, disclose Closing Costs Financed (Paid from your Loan Amount) in the
third column of the Final item. (§ 1026.38(e)(6))
The amount disclosed in the Loan Estimate column is the same as the amount
disclosed on the most recent Loan Estimate provided to the consumer.
(§ 1026.38(e)(1)(i), (2)(i), (4)(i),(5)(i)) The amounts disclosed in the Loan Estimate column
are rounded to the nearest dollar in order to match the corresponding amount
disclosed on the Loan Estimate’s Calculating Cash to Close table. (Comment 38(e)-3)
Loan Amount
Loan Amount should have the same amount disclosed, as a positive number, in
the Final column as the Loan Amount in the Loan Terms table on page 1 of the
Closing Disclosure. (§ 1026.38(e)(1)(ii))
Total Closing Costs
If the amount disclosed as the Total Closing Costs (Borrower Paid) on page 2 is a
positive number, disclose that amount as a negative number in the Final column for
Total Closing Costs. If the amount disclosed as the Total Closing Costs (Borrower
Paid) on page 2 is a negative number, disclose that amount as a positive number
89 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
in the Final column for Total Closing Costs. (§ 1026.38(e)(2)(ii)) When the amount
in the Final column is different from the amount in the Loan Estimate column, the
creditor should indicate that the consumer should see the Total Loan Costs or
Total Other Costs subheadings, as applicable, on page 2 of the Closing Disclosure.
(§ 1026.38(e)(2)(iii)(A)(2))
Increase in Total Closing Costs That Exceed The Legal Limit
When the increase in Total Closing Costs exceeds the legal limits, disclose a
statement that an increase in closing costs exceeds the legal limits by the dollar
amount of the excess in the Did this change? column. (§ 1026.38(i)(1)(iii)(A)(3)) If
a creditor will provide a lender credit to the consumer for the excess amount, the
creditor must include a statement directing the consumer to the Lender Credit
on page 2. If a creditor will reduce the amount of the principal to offset the excess
amount, the creditor must include a statement informing the consumer the creditor
is providing a principal reduction to offset the charges that exceed the legal limit.
(Comment 38(i)(1)(iii)(A)-3)
Closing Costs Paid Before Closing
For Closing Costs Paid Before Closing, disclose $0 in the Loan Estimate
column. (§ 1026.38(e)(3)(i)) The Final column should disclose the same amount
designated as Borrower-Paid Before Closing in the Closing Costs Subtotals of
the Closing Cost Details table on Closing Disclosure page 2, as a positive number.
(§ 1026.38(e)(3)(ii))
Total Payoffs and Payments
If the amount disclosed in the Payoffs and Payments table on page 3 is a positive
number, disclose that amount as a negative in the Final column for Total Payoffs
and Payments. If the amount disclosed in the Payoffs and Payments table on
page 3 is a negative number, disclose that amount as a positive number in the
Final column for Total Payoffs and Payments. (§ 1026.38(e)(4)(ii))
Cash to Close
Cash to Close discloses the sum of Loan Amount, Total Closing Costs, Closing
Costs Paid Before Closing, and Total Payoffs and Payments in the Loan Estimate
and Final columns, with indications of whether the totals are due to or from the
consumer. (§ 1026.38(e)(5)(ii))
90 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Closing Costs Financed (Paid from your Loan Amount)
Closing Costs Financed (Paid from your Loan Amount) is the sum of the amounts
in the Final column of the Loan Amount and Total Payoffs and Payments. However,
the amount is disclosed only if the sum is greater than zero and no larger than the
Total Closing Costs (deducting the amount in the Final column of Closing Costs
Paid Before Closing). (§ 1026.38(e)(6))
3.4.3 Summaries of Transactions
FIGURE 43: SUMMARIES OF TRANSACTIONS TABLE OF THE CLOSING DISCLOSURE
91 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Use the Summaries of Transactions table to disclose the amounts associated with
the real estate purchase transaction between the consumer and seller, together
with closing costs, in order to disclose the amounts due from or payable to the
consumer and seller at closing, as applicable. (§ 1026.38(j),(k)) A separate Closing
Disclosure can be provided to the consumer and the seller that do not reect the
other party’s costs and credits by omitting certain disclosures on each separate
Closing Disclosure. (§ 1026.38(t)(5)(v),(vi),(ix)) If using a separate seller’s disclosure,
the settlement agent must also provide a copy to the creditor. (§1026.19(f)(4)(iv))
More information on separating consumer and seller information on the Closing
Disclosure can be found in Section 11.7 of the Compliance Guide
In transactions without a seller, the creditor either does not provide the Seller’s
Transaction column or leaves that column blank. (Comment 38(k)-1) Similarly, for
purchase transactions that involve a simultaneous subordinate lien loan, the creditor
either does not provide the Seller’s Transaction column or leaves that column blank
if the Closing Disclosure for the rst lien loan discloses the entirety of the seller’s
transaction.
A creditor can also decide to replace the Summaries of Transactions table with a
Payoffs and Payments table (see Figure 40) when the Alternative Cash to Close and
Alternative Calculating Cash to Close tables are used. (§ 1026.38(t)(5)(vii))
Generally, the Summaries of Transactions table is similar to the Summary of
Borrower’s Transaction and Summary of Seller’s Transaction tables on the HUD-1
Settlement Statement provided under Regulation X prior to the TILA-RESPA Rule
taking effect. There are some modications to the Closing Disclosure related to
the handling of the disclosure of the consumer’s Deposit, the disclosure of Credits,
and other matters, discussed below.
3.4.4 Borrower’s Transaction
A creditor can work with a Settlement Agent, and the Settlement Agent can
disclose the Borrower’s Transaction column of the Summaries of Transactions
table. Any references to the creditor would apply to the Settlement Agent when the
Settlement Agent discloses the Borrower’s Transaction column. (§ 1026.19(f)(1)(v))
92 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Due From Borrower at Closing
Generally, in a Purchase transaction the amount Due from Borrower at Closing
includes:
§ Sale Price of Property,
§ Sale Price of Any Personal Property Included in Sale,
§ Closing Costs Paid at Closing,
§ Adjustments,
§ Adjustments for Items Paid by the Seller in Advance, pursuant to the terms of the
real estate sale contract, and
§ Other consumer charges disclosed in Section K, such as those that may be
disclosed on Line K.04. (§ 1026.38(j)(1))
However, Sale Price is not disclosed in the Summaries of Transactions table for a
simultaneous subordinate lien loan in a purchase transaction. (Comment 38(j)(1)
(ii)-1)
For purposes of disclosing Sale Price of Any Personal Property Included in Sale,
personal property is dened by State law, but could include such items as carpets,
drapes, and appliances. Manufactured homes are not considered personal
property for the Closing Disclosure. (Comment 38(j)(1)(ii)-1)
Closing Costs Paid at Closing is the amount of closing costs designated as
Borrower-Paid At Closing minus any Lender Credits on page 2 of the Closing
Disclosures. (§ 1026.38(j)(1)(iv))
Under the heading Adjustments, disclose a description and amount for each of
the following:
§ Items not otherwise disclosed in Section K of the Closing Disclosure (i.e.,
items not already disclosed as Adjustments for Items Paid by the Seller in
Advance) that the seller has paid prior to the real estate closing but that will be
reimbursed by the consumer at closing.
§ Items not otherwise disclosed in Section K of the Closing Disclosure that are
owed to the seller but payable to the consumer after the closing.
Examples of items that are disclosed as Adjustments include:
§ A balance in a seller’s reserve account transferred to the consumer in
connection with an assumed loan,
93 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
§ Rent that the consumer will collect after closing for a period of time prior to the
closing, and
§ A tenant security deposit.
(Comment 38(j)(1)(v)-1)
Under Adjustments for Items Paid by the Seller in Advance, disclose the prorated
amounts for prepaid City/Town taxes, County taxes, and other assessments due
from the consumer to reimburse the seller and the time period corresponding to
that amount. (§ 1026.38(j)(1)(vi)-(ix)) Also, disclose a description and amount for any
item paid by the seller prior to the real estate closing that is due from the consumer
at the closing. (§ 1026.38(j)(1)(x)) Examples of these items include:
§ Taxes (other than County or City/Town taxes) paid in advance for an entire year
when the closing occurs prior to the expiration of the year,
§ Flood or hazard insurance premiums when the consumer is being substituted as
an insured under the same policy,
§ Mortgage insurance in connection with an assumed loan,
§ Planned unit development or condominium association assessments paid
in advance,
§ Fuel or other supplies on hand purchased by the seller which the consumer will
use when the consumer takes possession of the Property, and
§ Ground rent paid in advance by the seller.
(Comment 38(j)(1)(x)-1)
Disclose other consumer charges owed by the consumer in the real estate closing
not otherwise disclosed in the Loan Costs table, Other Costs table, or Section K of
the Closing Disclosure. Generally, these amounts may be disclosed on Line K.04.
Examples include:
§ Amounts paid to any existing holders of liens on the Property in a renance
transaction,
§ Payoffs of other secured or unsecured debt,
§ Any outstanding real estate property taxes,
§ Construction costs that the consumer will be obligated to pay in connection
with the transaction,
94 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
§ Principal reductions, and
§ For a simultaneous subordinate lien loan, the proceeds of the simultaneous
subordinate lien loan that are applied to the rst-lien loan.
(Comments 38(j)(1)(v)-2 and -3)
These amounts are disclosed without a corresponding credit in the Seller’s
Transaction column. (Comment 38(j)(1)(v)-2)
Paid Already By or on Behalf of Borrower at Closing
The amount Paid Already by or on Behalf of Borrower at Closing is the sum of:
§ Deposit,
§ Loan Amount,
§ Existing Loan(s) Assumed or Taken Subject to,
§ Seller Credits,
§ Other Credits, and
§ Adjustments for Items Unpaid by Seller pursuant to the terms of the real estate
sale contract. (§ 1026.38(j)(2))
Deposit is the amount paid into a trust account by the consumer pursuant
to a contract of sale. (Comment 38(j)(2)(ii)-1) If the Deposit has been applied
toward a closing cost paid by the consumer, the amount so applied should be
deducted from the amount of the Deposit. (Comment 38(j)(2)(ii)-2) No deduction
in the amount of the Deposit is to be made for the payment of any real estate
commission disclosed on page 2 of the Closing Disclosure. (Comment 38(g)(4)-4)
Existing Loan(s) Assumed or Taken Subject to is the total amount of all loans that
the consumer is assuming in the transaction, even if more than one loan is being
assumed, and all loans subject to which the consumer is taking title to the Property.
(Comment 38(j)(2)(iv)-1)
Seller Credits include any general or non-specic seller credits. (§ 1026.38(j)(2)(v))
However, if the seller credit is attributable to a charge listed on Closing Disclosure
page 2, then the amount should be listed with the item and designated as Seller-
Paid at Closing or Seller-Paid Before Closing on Closing Disclosure page 2.
(Comment 38(j)(2)(v)-1)
95 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Seller Credits include any seller credits for issues identied at a walk-through of
the Property. (Comment 38(j)(2)(v)-2)
Other Credits include a general credit from any party other than the seller or
creditor. (§ 1026.38(j)(2)(vi)) One example is a credit a consumer receives from a
real estate agent. A description of the credit and the name of the party giving the
credit must also be included. However, if the credit or rebate is attributable to a
charge listed on page 2 of the Closing Disclosure, then the amount should be
listed with the item and designated as Paid by Others on Closing Disclosure page
2. (Comment 38(j)(2)(vi)-1)
Other Credits include any transferred escrow balance in a renance transaction.
(Comment 38(j)(2)(vi)-4)
Other Credits also include a credit for any money or other payments made at
closing by third parties (including gifts from family members) not otherwise
associated with the transaction, along with a description of the nature of the funds.
Amounts provided in advance of the real estate closing to consumers by third
parties (including gifts from family members) not otherwise associated with the
transaction are not required to be disclosed. (Comment 38(j)(2)(vi)-5)
Any nancing arrangements or other new loans not otherwise disclosed in the
Borrower’s Transaction column table as part of the Loan Amount or Existing
Loans Assumed or Taken Subject to must be disclosed under the subheading
Other Credits (or on line L.04) for the rst lien loan. If the net proceeds of the
subordinate lien loan are less than its principal amount, the net proceeds must also
be disclosed. The net proceeds may be disclosed on the same line as the principal
amount of the subordinate lien loan. (Comment 38(j)(2)(vi)-2)
Disclosure of any amount paid with funds other than closing funds by a consumer
in connection with the payoff of an existing subordinate loan are disclosed with a
statement that such amounts were paid outside of closing. (Comment 38(j)(2)(vi)-3)
Under Adjustments for Items Unpaid by Seller, disclose the prorated amounts for
any unpaid City/Town taxes, County taxes and other assessments due from the
seller to reimburse the consumer at the real estate closing and the time period
corresponding to that amount. (§ 1026.38(j)(2)(vii), (viii), (ix), (x)) Also, disclose
a description and amount for any additional items which have not been paid
and which the consumer is expected to pay after the real estate closing but are
attributable to a period of time prior to the closing. (§ 1026.38(j)(2)(xi)). Examples
of these items include:
§ Utilities used but not paid for by the seller, and
96 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
§ Interest on loan assumptions. (Comment 38(j)(2)(xi)-1)
Cash to Close From or To Borrower
Under a subheading of Calculation:
§ Disclose Total Due from the Borrower at Closing as a positive number.
§ Disclose Total Paid Already by or on Behalf of the Borrower at Closing as a
negative number. (§ 1026.38(j)(3))
§ Disclose the sum of Total Due from the Borrower at Closing and Total Paid
Already by or on Behalf of the Borrower at Closing as Cash to Close From
Borrower when the sum is a positive number, or as Cash to Close To Borrower
when the sum is a negative number. The sum is disclosed as a positive number
in either event. (Comment 38(j)(3)(iii)-2)
3.4.5 Seller’s Transactions
The Settlement Agent completes and discloses the Seller’s Transaction column of
the Summaries of Transactions table. (§ 1026.19(f)(4)) The requirement to complete
the Seller’s Transaction column of the Summaries of Transactions table does not
apply to a simultaneous subordinate lien loan if the Closing Disclosure for the rst
lien loan discloses the entirety of the seller’s transaction. If the requirement to
complete the Seller’s Transaction column applies to a simultaneous subordinate
lien loan, complete the disclosures based only on the terms and conditions of the
subordinate lien loan and do not include Sale Price. (Comment 38(k)(1)-1)
Due to Seller at Closing
Generally, the amount Due to Seller at Closing includes:
§ The Sale Price of the Property,
§ Sale Price of Any Personal Property Included in Sale,
§ Adjustments for Items Paid by Seller in Advance due to the seller pursuant to the
terms of the real estate sales contract (§ 1026.38(k)(1)), and
§ Other items owed by the consumer and disclosed in Section M of the Closing
Disclosure.
For purposes of disclosing the Sale Price of Any Personal Property included
in Sale, personal property is dened by state law, but could include such items
97 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
as carpets, drapes, and appliances. Manufactured homes are not considered
personal property for the Closing Disclosure. (Comments 38(j)(1)(ii)-1 and 38(k)-3)
Under Adjustments for Items Paid by the Seller in Advance disclose the prorated
amounts for prepaid City/Town taxes, County taxes and other assessments due
from the consumer to reimburse the seller and the time period corresponding to
that amount. (§ 1026.38(k)(1)(v)-(viii)). Also, disclose a description and amount for any
additional items paid by the seller prior to the real estate closing that are due from
the consumer at the closing. (§ 1026.38(k)(1)(ix)) Examples of these items include:
§ Taxes paid in advance for an entire year when the closing occurs prior to the
expiration of the year,
§ Flood or hazard insurance premiums when the consumer is being substituted as
an insured under the same policy,
§ Mortgage insurance in connection with an assumed loan,
§ Planned unit development or condominium association assessments paid in
advance,
§ Fuel or other supplies on hand purchased by the seller which the consumer will
use when the consumer takes possession of the property, and
§ Ground rent paid in advance by the seller.
(Comments 38(j)(1)(x)-1 and 38(k)-3)
Also, disclose in Section M, such as on lines M.03 to M.08, a description and
amount for any other items paid to the seller by the consumer pursuant to the
contract of sale or other agreement. (§1026.38(k)(1)(iv)) Examples of these
amounts include:
§ A balance in a seller’s reserve account transferred to the consumer in
connection with an assumed loan,
§ Rent that the consumer will collect after closing for a period of time prior to the
closing, and
§ The treatment of any tenant security deposit.
(Comments 38(j)(1)(v)-1and 38(k)-3)
98 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Due from Seller at Closing
Disclose the amount Due from Seller at Closing as the sum of:
§ Any Excess Deposit,
§ Closing Costs Paid at Closing by the Seller,
§ Existing Loan(s) Assumed or Taken Subject to by the consumer,
§ Payoff of First Mortgage Loan,
§ Payoff of Second Mortgage Loan,
§ Seller Credit,
§ Payment of other seller obligations, and
§ Adjustments for Items Unpaid by Seller due to the consumer pursuant to the
terms of the real estate sale contract. (§ 1026.38(k)(2))
If a simultaneous subordinate lien loan is disclosed using the alternative tables, the
Closing Disclosure for the rst lien loan must include any contributions from the
seller that are disclosed in the Payoffs and Payments table as amounts contributed
to the simultaneous subordinate lien loan. (Comment 38(k)(2)(vii)-1)
Excess Deposit is the amount of any deposit made by the consumer that has been
disbursed to the seller prior to closing. (Comment 38(k)(2)(ii)-1) Note that the
calculation of the excess deposit does not include any deposits held by the real
estate brokerage.
Seller Credit is an amount the seller is giving as a general credit not tied to a
specic charge on page 2 or is making as an allowance to the consumer for items
to purchase separately. (§ 1026.38(k)(2)(vii)) The amount of Seller Credit would
include any credits to the consumer as the result of a walk-through of the property
prior to the closing. (Comment 38(k)(2)(iv)-2) However, if the amount of a credit is
attributable to a charge listed on page 2, then the amount should be listed with
the applicable item on page 2 and designated as Seller-Paid At Closing or Seller-
Paid Before Closing, as appropriate. (Comment 38(j)(2)(v)-1)
Disclose the Payoff of the First Mortgage Loan, if any, (§ 1026.38(k)(2)(v)) and then
the Payoff of the Second Mortgage Loan, if any. (§ 1026.38(k)(2)(vi)) Disclose the
payoff or satisfaction amounts for any additional seller obligations as separately
itemized amounts. (§ 1026.38(k)(2)(viii)) Examples of these seller obligations
include, but are not limited to:
99 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
§ Satisfaction of outstanding liens imposed due to Federal, State or local income taxes,
§ Real estate property tax liens,
§ Judgments against the seller reduced to a lien upon the property,
§ Other obligations the seller wishes the Settlement Agent to pay from the seller’s
proceeds at closing, and (Comment 38(k)(2)(viii)-1)
§ Funds to be held by the Settlement Agent for repairs or the payment of
water, fuel, or other utility bills that cannot be prorated between the parties
at closing because the amounts used by the seller prior to closing are
not yet known at closing. Subsequent disclosure of a corrected Closing
Disclosure after the repairs are made or the utility bill is received is optional.
(Comment 38(k)(2)(viii)-3)
Disclose any amount paid with funds other than closing funds in connection with
a subordinate loan payoff with a statement that such amounts were paid from
outside of closing funds. (Comment 38(k)(2)(viii)-2)
Adjustments for Items Unpaid by Seller due to the consumer to be paid by the
seller pursuant to the real estate sales contract has two components:
§ First, disclose amounts owed by the seller with the time period associated with
the adjustments. Examples include:
ú Taxes paid in arrears for an entire year when the closing occurs prior the
start of the year,
ú Flood or hazard insurance premiums when the consumer is being
substituted as an assured under the same policy,
ú Mortgage insurance in connection with an assumed loan,
ú Planned unit development or condominium assessments not yet paid, and
ú Ground rent not yet paid by the seller. (§ 1026.38(k)(2)(ix), (x), (xi), (xii))
§ Second, disclose amounts owed by the seller that are neither disclosed
on page 2 nor specically disclosed as Due from Seller at Closing.
(§ 1026.38(k)(2)(xiii)) Examples of these amounts include:
ú Utilities used but not paid for by the seller,
ú Rent collected in advance by the seller from a tenant for a period of
extending beyond the closing date, and
ú Interest on loan assumptions. (Comment 38(j)(2)(xi)-1)
100 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Cash to Close Due to or From Seller
Under a subheading of Calculation:
§ Disclose Total Due to the Seller at Closing, as a positive number.
§ Disclose Total Due from Seller at Closing, as a negative number.
(§ 1026.38(k)(3))
§ Disclose the sum of Total Due to the Seller at Closing and Total Due from Seller
at Closing as a positive number. When the result is a positive number, disclose
the amount as Cash to Seller. When the result is a negative number, disclose the
amount as Cash from Seller. The sum is disclosed as a positive number in either
event. (Comment 38(k)(3)-2)
101 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.5 Closing Disclosure (page 4)
FIGURE 44: CLOSING DISCLOSURE (PAGE 4)
sections 3.5.1
and 3.5.2
sections 3.5.3
and 3.5.4
102 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
On page 4 of the Closing Disclosure, a Loan Disclosures table is shown with the
heading Additional Information About This Loan.
3.5.1 Loan Disclosures
In the Loan Disclosures table, disclose:
§ Information concerning future Assumption of the loan by a subsequent
purchaser,
Assumption
If you sell or transfer this property to another person, your lender
will allow, under certain conditions, this person to assume this
loan on the original terms.
will not allow assumption of this loan on the original terms.
Demand Feature
Your loan
has a demand feature, which permits your lender to require early
repayment of the loan. You should review your note for details.
does not have a demand feature.
Late Payment
If your payment is more than ___ days late, your lender will charge a
late fee of ________________________________________________
Negative Amortization (Increase in Loan Amount)
Under your loan terms, you
are scheduled to make monthly payments that do not pay all of
the interest due that month. As a result, your loan amount will
increase (negatively amortize), and your loan amount will likely
become larger than your original loan amount. Increases in your
loan amount lower the equity you have in this property.
may have monthly payments that do not pay all of the interest
due that month. If you do, your loan amount will increase
(negatively amortize), and, as a result, your loan amount may
become larger than your original loan amount. Increases in your
loan amount lower the equity you have in this property.
do not have a negative amortization feature.
Partial Payments
Your lender
may accept payments that are less than the full amount due
(partial payments) and apply them to your loan.
may hold them in a separate account until you pay the rest of the
payment, and then apply the full payment to your loan.
does not accept any partial payments.
If this loan is sold, your new lender may have a dierent policy.
Security Interest
You are granting a security interest in
You may lose this property if you do not make your payments or
satisfy other obligations for this loan.
CLOSING DISCLOSURE PAGE 4 OF 5 • LOAN ID # 0000000000
Loan Disclosures
Escrow Account
For now, your loan
will have an escrow account (also called an “impound” or “trust”
account) to pay the property costs listed below. Without an escrow
account, you would pay them directly, possibly in one or two large
payments a year. Your lender may be liable for penalties and interest
for failing to make a payment.
Escrow
Escrowed
Property Costs
over Year 1
Estimated total amount over year 1 for
your escrowed property costs:
Non-Escrowed
Property Costs
over Year 1
Estimated total amount over year 1 for
your non-escrowed property costs:
You may have other property costs.
Initial Escrow
Payment
A cushion for the escrow account you
pay at closing. See Section G on page 2.
Monthly Escrow
Payment
The amount included in your total
monthly payment.
No Escrow
Estimated
Property Costs
over Year 1
Estimated total amount over year 1. You
must pay these costs directly, possibly
in one or two large payments a year.
Escrow Waiver Fee
will not have an escrow account because you declined it your
lender does not oer one. You must directly pay your property
costs, such as taxes and homeowner’s insurance. Contact your
lender to ask if your loan can have an escrow account.
In the future,
Your property costs may change and, as a result, your escrow pay-
ment may change. You may be able to cancel your escrow account,
but if you do, you must pay your property costs directly. If you fail
to pay your property taxes, your state or local government may (1)
impose nes and penalties or (2) place a tax lien on this property. If
you fail to pay any of your property costs, your lender may (1) add
the amounts to your loan balance, (2) add an escrow account to your
loan, or (3) require you to pay for property insurance that the lender
buys on your behalf, which likely would cost more and provide fewer
benets than what you could buy on your own.
Additional Information About This Loan
Adjustable Payment (AP) Table
Interest Only Payments?
Optional Payments?
Step Payments?
Seasonal Payments?
Monthly Principal and Interest Payments
First Change/Amount
Subsequent Changes
Maximum Payment
Adjustable Interest Rate (AIR) Table
Index + Margin
Initial Interest Rate
Minimum/Maximum Interest Rate
Change Frequency
First Change
Subsequent Changes
Limits on Interest Rate Changes
First Change
Subsequent Changes
FIGURE 45: SUMMARIES OF TRANSACTIONS TABLE OF THE CLOSING DISCLOSURE
103 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
§ Whether the legal obligation contains a Demand Feature that can require early
payment of the loan,
§ The terms of the legal obligation that impose a fee for a Late Payment including
the amount of time that passes before a fee is imposed and the amount of such
fee or how it is calculated,
§ Whether the regular periodic payments can cause the principal balance of the
loan to increase, creating Negative Amortization,
§ The creditor’s policy in relation to Partial Payments by the consumer,
§ A statement that the consumer is granting a Security Interest in the Property
(along with an identication of the Property), and
§ Information related to any Escrow Account held by the servicer (or a statement
that an Escrow Account has not been established with a description of estimated
property costs during the rst year). (§ 1026.38(l)(1)-(7))
3.5.2 Partial Payments
When disclosing its partial payments policy, the creditor checks at least one of
three options:
§ Partial Payments will be accepted and applied to the loan;
§ Partial Payments will be accepted, but held in a separate account until the
remainder of the full amount due is received; or
§ Partial Payments will not be accepted. (§1026.38(l)(5))
The creditor may check multiple boxes for the partial payments disclosure in
some circumstances. But note that, if there are any circumstances where the
creditor would accept partial payments, the creditor cannot check the third option
indicating Partial Payments will not be accepted. As a result, the third box should
not be checked if either of the rst two options is checked.
104 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.5.3 Escrow Account
When an Escrow Account is established, disclose:
§ The amount of Escrowed Property Costs over Year 1 with a list of the costs that
will be paid (in whole or in part) by the Escrow Account (to the extent there is
room to list the costs in the space provided or use an addendum if additional
lines are needed),
FIGURE 46: ESCROW ACCOUNT TABLE OF THE CLOSING DISCLOSURE
Assumption
If you sell or transfer this property to another person, your lender
will allow, under certain conditions, this person to assume this
loan on the original terms.
will not allow assumption of this loan on the original terms.
Demand Feature
Your loan
has a demand feature, which permits your lender to require early
repayment of the loan. You should review your note for details.
does not have a demand feature.
Late Payment
If your payment is more than ___ days late, your lender will charge a
late fee of ________________________________________________
Negative Amortization (Increase in Loan Amount)
Under your loan terms, you
are scheduled to make monthly payments that do not pay all of
the interest due that month. As a result, your loan amount will
increase (negatively amortize), and your loan amount will likely
become larger than your original loan amount. Increases in your
loan amount lower the equity you have in this property.
may have monthly payments that do not pay all of the interest
due that month. If you do, your loan amount will increase
(negatively amortize), and, as a result, your loan amount may
become larger than your original loan amount. Increases in your
loan amount lower the equity you have in this property.
do not have a negative amortization feature.
Partial Payments
Your lender
may accept payments that are less than the full amount due
(partial payments) and apply them to your loan.
may hold them in a separate account until you pay the rest of the
payment, and then apply the full payment to your loan.
does not accept any partial payments.
If this loan is sold, your new lender may have a dierent policy.
Security Interest
You are granting a security interest in
You may lose this property if you do not make your payments or
satisfy other obligations for this loan.
CLOSING DISCLOSURE PAGE 4 OF 5 • LOAN ID # 0000000000
Loan Disclosures
Escrow Account
For now, your loan
will have an escrow account (also called an “impound” or “trust”
account) to pay the property costs listed below. Without an escrow
account, you would pay them directly, possibly in one or two large
payments a year. Your lender may be liable for penalties and interest
for failing to make a payment.
Escrow
Escrowed
Property Costs
over Year 1
Estimated total amount over year 1 for
your escrowed property costs:
Non-Escrowed
Property Costs
over Year 1
Estimated total amount over year 1 for
your non-escrowed property costs:
You may have other property costs.
Initial Escrow
Payment
A cushion for the escrow account you
pay at closing. See Section G on page 2.
Monthly Escrow
Payment
The amount included in your total
monthly payment.
No Escrow
Estimated
Property Costs
over Year 1
Estimated total amount over year 1. You
must pay these costs directly, possibly
in one or two large payments a year.
Escrow Waiver Fee
will not have an escrow account because you declined it your
lender does not oer one. You must directly pay your property
costs, such as taxes and homeowner’s insurance. Contact your
lender to ask if your loan can have an escrow account.
In the future,
Your property costs may change and, as a result, your escrow pay-
ment may change. You may be able to cancel your escrow account,
but if you do, you must pay your property costs directly. If you fail
to pay your property taxes, your state or local government may (1)
impose nes and penalties or (2) place a tax lien on this property. If
you fail to pay any of your property costs, your lender may (1) add
the amounts to your loan balance, (2) add an escrow account to your
loan, or (3) require you to pay for property insurance that the lender
buys on your behalf, which likely would cost more and provide fewer
benets than what you could buy on your own.
Additional Information About This Loan
Adjustable Payment (AP) Table
Interest Only Payments?
Optional Payments?
Step Payments?
Seasonal Payments?
Monthly Principal and Interest Payments
First Change/Amount
Subsequent Changes
Maximum Payment
Adjustable Interest Rate (AIR) Table
Index + Margin
Initial Interest Rate
Minimum/Maximum Interest Rate
Change Frequency
First Change
Subsequent Changes
Limits on Interest Rate Changes
First Change
Subsequent Changes
105 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
§ The amount of Non-Escrowed Property Costs over Year 1 with a list of the
costs that will not be paid by the Escrow Account (to the extent there is room
to list the costs in the space provided or use an addendum if additional lines
are needed),
§ Initial Escrow Payment, and
§ Monthly Escrow Payment. (§ 1026.38(l)(7)(i)(A))
When an Escrow Account is not established, disclose:
§ The amount of Estimated Property Costs over Year 1, and
§ The amount of any Escrow Waiver Fee imposed for waiving the creation of an
Escrow Account with the loan. (§ 1026.38(l)(7)(i)(B))
Property Costs include:
§ Property Taxes,
§ Homeowner’s Insurance,
§ Charges imposed by a cooperative, condominium or homeowners
association,
§ Ground rent,
§ Leasehold payments,
§ Ongoing mortgage insurance premiums, and
§ Certain other insurance premiums or charges if written in connection
with the credit transaction and required by the lender. (§§ 1026.38(l)(7)(i);
1026.37(c)(4)(ii); 1026.43(b)(8))
The Initial Escrow Payment is the amount initially added to the escrow account
regardless of the person contributing the funds (consumer, seller, lender, etc.).
(§§ 1026.38(l)(7)(i)(A)(3); 1026.38(g)(3))
If an addendum is used, include a reference to the addendum, such as “See
attached page for additional information,” in the applicable section of the
Closing Disclosure.
106 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.5.4 Adjustable Payment (AP) Table
Disclose the Adjustable Payment (AP) Table when the periodic principal and interest
payment may change after consummation, but not because of a change to the interest rate,
or the loan is a seasonal payment product. (§ 1026.38(m)) If the loan does not contain these
features, do not disclose the AP Table. (Comment 38(m)-3) The same information that was or
would have been disclosed in the AP Table on the Loan Estimate is disclosed in the AP Table
on Closing Disclosure page 4, updated to reect the terms of the loan at consummation.
(Comment 38(m)-4)
3.5.5 Adjustable Interest Rate (AIR) Table
Disclose the Adjustable Interest Rate (AIR) Table when the loan’s interest rate may
increase after consummation. (§ 1026.38(n)) If the loan’s interest rate will not increase after
consummation, do not disclose the AIR Table. (Comment 38(n)-3) The same information
that was or would have been disclosed in the AIR Table on the Loan Estimate is disclosed
in the AIR Table on Closing Disclosure page 4, updated to reect the terms of the loan at
consummation. (Comment 38(n)-4)
F I G UR E 48: ADJUSTABLE INTEREST RATE (AIR) TABLE OF THE CLOSING DISCLOSURE
Assumption
If you sell or transfer this property to another person, your lender
will allow, under certain conditions, this person to assume this
loan on the original terms.
will not allow assumption of this loan on the original terms.
Demand Feature
Your loan
has a demand feature, which permits your lender to require early
repayment of the loan. You should review your note for details.
does not have a demand feature.
Late Payment
If your payment is more than ___ days late, your lender will charge a
late fee of ________________________________________________
Negative Amortization (Increase in Loan Amount)
Under your loan terms, you
are scheduled to make monthly payments that do not pay all of
the interest due that month. As a result, your loan amount will
increase (negatively amortize), and your loan amount will likely
become larger than your original loan amount. Increases in your
loan amount lower the equity you have in this property.
may have monthly payments that do not pay all of the interest
due that month. If you do, your loan amount will increase
(negatively amortize), and, as a result, your loan amount may
become larger than your original loan amount. Increases in your
loan amount lower the equity you have in this property.
do not have a negative amortization feature.
Partial Payments
Your lender
may accept payments that are less than the full amount due
(partial payments) and apply them to your loan.
may hold them in a separate account until you pay the rest of the
payment, and then apply the full payment to your loan.
does not accept any partial payments.
If this loan is sold, your new lender may have a dierent policy.
Security Interest
You are granting a security interest in
You may lose this property if you do not make your payments or
satisfy other obligations for this loan.
CLOSING DISCLOSURE PAGE 4 OF 5 • LOAN ID # 0000000000
Loan Disclosures
Escrow Account
For now, your loan
will have an escrow account (also called an “impound” or “trust”
account) to pay the property costs listed below. Without an escrow
account, you would pay them directly, possibly in one or two large
payments a year. Your lender may be liable for penalties and interest
for failing to make a payment.
Escrow
Escrowed
Property Costs
over Year 1
Estimated total amount over year 1 for
your escrowed property costs:
Non-Escrowed
Property Costs
over Year 1
Estimated total amount over year 1 for
your non-escrowed property costs:
You may have other property costs.
Initial Escrow
Payment
A cushion for the escrow account you
pay at closing. See Section G on page 2.
Monthly Escrow
Payment
The amount included in your total
monthly payment.
No Escrow
Estimated
Property Costs
over Year 1
Estimated total amount over year 1. You
must pay these costs directly, possibly
in one or two large payments a year.
Escrow Waiver Fee
will not have an escrow account because you declined it your
lender does not oer one. You must directly pay your property
costs, such as taxes and homeowner’s insurance. Contact your
lender to ask if your loan can have an escrow account.
In the future,
Your property costs may change and, as a result, your escrow pay-
ment may change. You may be able to cancel your escrow account,
but if you do, you must pay your property costs directly. If you fail
to pay your property taxes, your state or local government may (1)
impose nes and penalties or (2) place a tax lien on this property. If
you fail to pay any of your property costs, your lender may (1) add
the amounts to your loan balance, (2) add an escrow account to your
loan, or (3) require you to pay for property insurance that the lender
buys on your behalf, which likely would cost more and provide fewer
benets than what you could buy on your own.
Additional Information About This Loan
Adjustable Payment (AP) Table
Interest Only Payments?
Optional Payments?
Step Payments?
Seasonal Payments?
Monthly Principal and Interest Payments
First Change/Amount
Subsequent Changes
Maximum Payment
Adjustable Interest Rate (AIR) Table
Index + Margin
Initial Interest Rate
Minimum/Maximum Interest Rate
Change Frequency
First Change
Subsequent Changes
Limits on Interest Rate Changes
First Change
Subsequent Changes
FIGURE 47: ADJUSTABLE PAYMENT (AP) TABLE OF THE CLOSING DISCLOSURE
Assumption
If you sell or transfer this property to another person, your lender
will allow, under certain conditions, this person to assume this
loan on the original terms.
will not allow assumption of this loan on the original terms.
Demand Feature
Your loan
has a demand feature, which permits your lender to require early
repayment of the loan. You should review your note for details.
does not have a demand feature.
Late Payment
If your payment is more than ___ days late, your lender will charge a
late fee of ________________________________________________
Negative Amortization (Increase in Loan Amount)
Under your loan terms, you
are scheduled to make monthly payments that do not pay all of
the interest due that month. As a result, your loan amount will
increase (negatively amortize), and your loan amount will likely
become larger than your original loan amount. Increases in your
loan amount lower the equity you have in this property.
may have monthly payments that do not pay all of the interest
due that month. If you do, your loan amount will increase
(negatively amortize), and, as a result, your loan amount may
become larger than your original loan amount. Increases in your
loan amount lower the equity you have in this property.
do not have a negative amortization feature.
Partial Payments
Your lender
may accept payments that are less than the full amount due
(partial payments) and apply them to your loan.
may hold them in a separate account until you pay the rest of the
payment, and then apply the full payment to your loan.
does not accept any partial payments.
If this loan is sold, your new lender may have a dierent policy.
Security Interest
You are granting a security interest in
You may lose this property if you do not make your payments or
satisfy other obligations for this loan.
CLOSING DISCLOSURE PAGE 4 OF 5 • LOAN ID # 0000000000
Loan Disclosures
Escrow Account
For now, your loan
will have an escrow account (also called an “impound” or “trust”
account) to pay the property costs listed below. Without an escrow
account, you would pay them directly, possibly in one or two large
payments a year. Your lender may be liable for penalties and interest
for failing to make a payment.
Escrow
Escrowed
Property Costs
over Year 1
Estimated total amount over year 1 for
your escrowed property costs:
Non-Escrowed
Property Costs
over Year 1
Estimated total amount over year 1 for
your non-escrowed property costs:
You may have other property costs.
Initial Escrow
Payment
A cushion for the escrow account you
pay at closing. See Section G on page 2.
Monthly Escrow
Payment
The amount included in your total
monthly payment.
No Escrow
Estimated
Property Costs
over Year 1
Estimated total amount over year 1. You
must pay these costs directly, possibly
in one or two large payments a year.
Escrow Waiver Fee
will not have an escrow account because you declined it your
lender does not oer one. You must directly pay your property
costs, such as taxes and homeowner’s insurance. Contact your
lender to ask if your loan can have an escrow account.
In the future,
Your property costs may change and, as a result, your escrow pay-
ment may change. You may be able to cancel your escrow account,
but if you do, you must pay your property costs directly. If you fail
to pay your property taxes, your state or local government may (1)
impose nes and penalties or (2) place a tax lien on this property. If
you fail to pay any of your property costs, your lender may (1) add
the amounts to your loan balance, (2) add an escrow account to your
loan, or (3) require you to pay for property insurance that the lender
buys on your behalf, which likely would cost more and provide fewer
benets than what you could buy on your own.
Additional Information About This Loan
Adjustable Payment (AP) Table
Interest Only Payments?
Optional Payments?
Step Payments?
Seasonal Payments?
Monthly Principal and Interest Payments
First Change/Amount
Subsequent Changes
Maximum Payment
Adjustable Interest Rate (AIR) Table
Index + Margin
Initial Interest Rate
Minimum/Maximum Interest Rate
Change Frequency
First Change
Subsequent Changes
Limits on Interest Rate Changes
First Change
Subsequent Changes
107 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.6 Closing Disclosure (page 5)
FIGURE 49: CLOSING DISCLOSURE (PAGE 5)
section 3.6.4
section 3.6.3
section 3.6.1
and 3.6.2
108 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Disclose Loan Calculations, Other Disclosures, Questions, Contact Information, and,
if desired by the creditor, Conrm Receipt tables on page 5 of the Closing Disclosure.
3.6.1 Loan Calculations
Disclose the Total of Payments, the Finance Charge, the Amount Financed, the
APR, and the Total Interest Percentage (TIP) in the Loan Calculations table.
(§ 1026.38(o))
The Total of Payments is the amount a consumer will have paid after making all
payments of principal, interest, mortgage insurance, and loan costs, as scheduled.
The amount disclosed as the Total of Payments excludes any portion of the
principal, interest, mortgage insurance, or loan costs that is offset by a specic
credit from another party. However, non-specic or general credits do not pay for
a specic fee or amount. Therefore, they do not offset amounts used to calculate
the Total of Payments. (Comment 38(o)-1)
The APR and TIP amounts should be updated from the amounts disclosed on the
Loan Estimate to reect the terms of the legal obligation at consummation.
FIGURE 50: LOAN CALCULATIONS TABLE OF THE CLOSING DISCLOSURE
Contact Information
Other Disclosures
Conrm Receipt
By signing, you are only conrming that you have received this form. You do not have to accept this loan because you have signed or received
this form.
Applicant Signature Date Co-Applicant Signature Date
CLOSING DISCLOSURE PAGE 5 OF 5 • LOAN ID # 0000000000
Total of Payments. Total you will have paid after
you make all payments of principal, interest,
mortgage insurance, and loan costs, as scheduled.
Finance Charge. The dollar amount the loan will
cost you.
Amount Financed. The loan amount available after
paying your upfront nance charge.
Annual Percentage Rate (APR). Your costs over
the loan term expressed as a rate. This is not your
interest rate.
Total Interest Percentage (TIP). The total amount
of interest that you will pay over the loan term as a
percentage of your loan amount.
Loan Calculations
?
Lender Mortgage Broker Real Estate Broker (B) Real Estate Broker (S) Settlement Agent
Name Ficus Bank
FRIENDLY MORTGAGE
BROKER INC.
RELIABLE REALTY CO. REALTY PROS
ABC Settlement
Address 4321 Raven Blvd.
Somecity, MD 54321
1234 Terrapin Dr.
Somecity, MD 54321
1776 Chesapeake St.
Ste 405
Anytown, MD 12345
3456 Oriole Ave.
Anytown, MD 12345
5432 Free State Blvd.
Ste 405
Somecity, MD 54321
NMLS ID 111111
222222
License ID
Contact Joe Smith
JIM TAYLOR KELLY GREEN STEVE WALSH NANCY WILSON
Contact NMLS ID 487493
394784
Contact
License ID
Email
JSMITH
FICUSBANK.COM
JTAYLOR
FRNDLYMTGBRKR.CO
KGREEN
RREALTY.COM
SWALSH
REALTYPROS.COM
NWILSON
ABCSETTLEMENT.COM
Phone 111-222-3333
3334445555
444-555-6666 555-666-7777 666-777-8888
?
Appraisal
If the property was appraised for your loan, your lender is required to
give you a copy at no additional cost at least 3 days before closing.
If you have not yet received it, please contact your lender at the
information listed below.
Contract Details
See your note and security instrument for information about
• what happens if you fail to make your payments,
• what is a default on the loan,
• situations in which your lender can require early repayment of the
loan, and
• the rules for making payments before they are due.
Liability after Foreclosure
If your lender forecloses on this property and the foreclosure does not
cover the amount of unpaid balance on this loan,
state law may protect you from liability for the unpaid balance. If you
renance or take on any additional debt on this property, you may
lose this protection and have to pay any debt remaining even after
foreclosure. You may want to consult a lawyer for more information.
state law does not protect you from liability for the unpaid balance.
Renance
Renancing this loan will depend on your future nancial situation,
the property value, and market conditions. You may not be able to
renance this loan.
Tax Deductions
If you borrow more than this property is worth, the interest on the
loan amount above this property’s fair market value is not deductible
from your federal income taxes. You should consult a tax advisor for
more information.
Questions? If you have questions about the
loan terms or costs on this form, use the contact
information below. To get more information
or make a complaint, contact the Consumer
Financial Protection Bureau at
www.consumernance.gov/mortgage-closing
?
109 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.6.2 Other Disclosures
The creditor discloses in the Other Disclosures table:
§ A statement related to the consumer’s rights in relation to any Appraisal
conducted for the property,
§ A statement informing the consumer of consequences of nonpayment, what
constitutes default, when a creditor can accelerate maturity, and prepayment
rebates and penalties pursuant to Contract Details,
§ A statement, among other things, of whether State law provides for continued
consumer responsibility for any Liability after Foreclosure,
§ A statement concerning the consumer’s ability to Renance the loan, and
§ A statement concerning the extent that interest on the loan can be included as a
Tax Deduction by the consumer. (§ 1026.38(p))
FIGURE 51: OTHER DISCLOSURES TABLE OF THE CLOSING DISCLOSURE
Contact Information
Other Disclosures
Conrm Receipt
By signing, you are only conrming that you have received this form. You do not have to accept this loan because you have signed or received
this form.
Applicant Signature Date Co-Applicant Signature Date
CLOSING DISCLOSURE PAGE 5 OF 5 • LOAN ID # 0000000000
Total of Payments. Total you will have paid after
you make all payments of principal, interest,
mortgage insurance, and loan costs, as scheduled.
Finance Charge. The dollar amount the loan will
cost you.
Amount Financed. The loan amount available after
paying your upfront nance charge.
Annual Percentage Rate (APR). Your costs over
the loan term expressed as a rate. This is not your
interest rate.
Total Interest Percentage (TIP). The total amount
of interest that you will pay over the loan term as a
percentage of your loan amount.
Loan Calculations
?
Lender Mortgage Broker Real Estate Broker (B) Real Estate Broker (S) Settlement Agent
Name Ficus Bank
FRIENDLY MORTGAGE
BROKER INC.
RELIABLE REALTY CO. REALTY PROS
ABC Settlement
Address 4321 Raven Blvd.
Somecity, MD 54321
1234 Terrapin Dr.
Somecity, MD 54321
1776 Chesapeake St.
Ste 405
Anytown, MD 12345
3456 Oriole Ave.
Anytown, MD 12345
5432 Free State Blvd.
Ste 405
Somecity, MD 54321
NMLS ID 111111
222222
License ID
Contact Joe Smith
JIM TAYLOR KELLY GREEN STEVE WALSH NANCY WILSON
Contact NMLS ID 487493
394784
Contact
License ID
Email
JSMITH
FICUSBANK.COM
JTAYLOR
FRNDLYMTGBRKR.CO
KGREEN
RREALTY.COM
SWALSH
REALTYPROS.COM
NWILSON
ABCSETTLEMENT.COM
Phone 111-222-3333
3334445555
444-555-6666 555-666-7777 666-777-8888
?
Appraisal
If the property was appraised for your loan, your lender is required to
give you a copy at no additional cost at least 3 days before closing.
If you have not yet received it, please contact your lender at the
information listed below.
Contract Details
See your note and security instrument for information about
• what happens if you fail to make your payments,
• what is a default on the loan,
• situations in which your lender can require early repayment of the
loan, and
• the rules for making payments before they are due.
Liability after Foreclosure
If your lender forecloses on this property and the foreclosure does not
cover the amount of unpaid balance on this loan,
state law may protect you from liability for the unpaid balance. If you
renance or take on any additional debt on this property, you may
lose this protection and have to pay any debt remaining even after
foreclosure. You may want to consult a lawyer for more information.
state law does not protect you from liability for the unpaid balance.
Renance
Renancing this loan will depend on your future nancial situation,
the property value, and market conditions. You may not be able to
renance this loan.
Tax Deductions
If you borrow more than this property is worth, the interest on the
loan amount above this property’s fair market value is not deductible
from your federal income taxes. You should consult a tax advisor for
more information.
Questions? If you have questions about the
loan terms or costs on this form, use the contact
information below. To get more information
or make a complaint, contact the Consumer
Financial Protection Bureau at
www.consumernance.gov/mortgage-closing
?
110 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
Appraisal
A statement concerning the Appraisal must be
provided for:
§ Higher-priced Mortgage Loans, and
§ Loans covered by the Equal Credit
Opportunity Act. (§ 1026.38(p)(1))
For these transactions, the creditor must
provide the following statement:
“If the property was appraised for your loan, your lender is required to give you
a copy at no additional cost at least 3 days before closing. If you have not yet
received it, please contact your lender at the information below.”
Liability after Foreclosure
The creditor complies with the obligation to notify the consumer of any State law
anti-deciency protections that apply to the consumer’s loan by checking one
of the options on the Closing Disclosure. (§ 1026.38(p)(3)) If any State law anti-
deciency protections could apply, then the creditor should disclose that anti-
deciency protections may apply.
Generally, statute of limitation laws that only limit the time frame in which a creditor
may obtain or collect deciency judgments do not count as anti-deciency
protections included in the disclosure. (Comment 38(p)(3)-1)
A Higher-priced Mortgage
Loan is dened at 12 CFR
1026.35.
Coverage of the Equal
Credit Opportunity Act is
discussed in Regulation
B, 12 CFR Part 1002,
Supplement I – Ofcial
Interpretations, Comment
1(a)-1.
111 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.6.3 Contact Information
In the Contact Information table, disclose the following information for the Lender,
the Mortgage Broker, the consumer’s Real Estate Brokerage, the seller’s Real
Estate Brokerage, and the Settlement Agent in a columnar format:
§ Name,
§ Address,
§ The NMLS or State license ID, as applicable,
§ The Contact name of an individual (and the NMLS or State license ID),
§ Email, and
§ Phone number. (§ 1026.38(r))
Unused columns may be removed and columns may be added for additional
parties. For example:
§ If there are two real estate brokers representing the seller, a column may
be added to identify that party and a column for a party not involved in the
transaction may be deleted. (Comment 38(r)-1)
FIGURE 52: CONTACT INFORMATION TABLE OF THE CLOSING DISCLOSURE
Contact Information
Other Disclosures
Conrm Receipt
By signing, you are only conrming that you have received this form. You do not have to accept this loan because you have signed or received
this form.
Applicant Signature Date Co-Applicant Signature Date
CLOSING DISCLOSURE PAGE 5 OF 5 • LOAN ID # 0000000000
Total of Payments. Total you will have paid after
you make all payments of principal, interest,
mortgage insurance, and loan costs, as scheduled.
Finance Charge. The dollar amount the loan will
cost you.
Amount Financed. The loan amount available after
paying your upfront nance charge.
Annual Percentage Rate (APR). Your costs over
the loan term expressed as a rate. This is not your
interest rate.
Total Interest Percentage (TIP). The total amount
of interest that you will pay over the loan term as a
percentage of your loan amount.
Loan Calculations
?
Lender Mortgage Broker Real Estate Broker (B) Real Estate Broker (S) Settlement Agent
Name Ficus Bank
FRIENDLY MORTGAGE
BROKER INC.
RELIABLE REALTY CO. REALTY PROS
ABC Settlement
Address 4321 Raven Blvd.
Somecity, MD 54321
1234 Terrapin Dr.
Somecity, MD 54321
1776 Chesapeake St.
Ste 405
Anytown, MD 12345
3456 Oriole Ave.
Anytown, MD 12345
5432 Free State Blvd.
Ste 405
Somecity, MD 54321
NMLS ID 111111
222222
License ID
Contact Joe Smith
JIM TAYLOR KELLY GREEN STEVE WALSH NANCY WILSON
Contact NMLS ID 487493
394784
Contact
License ID
Email
JSMITH
FICUSBANK.COM
JTAYLOR
FRNDLYMTGBRKR.CO
KGREEN
RREALTY.COM
SWALSH
REALTYPROS.COM
NWILSON
ABCSETTLEMENT.COM
Phone 111-222-3333
3334445555
444-555-6666 555-666-7777 666-777-8888
?
Appraisal
If the property was appraised for your loan, your lender is required to
give you a copy at no additional cost at least 3 days before closing.
If you have not yet received it, please contact your lender at the
information listed below.
Contract Details
See your note and security instrument for information about
• what happens if you fail to make your payments,
• what is a default on the loan,
• situations in which your lender can require early repayment of the
loan, and
• the rules for making payments before they are due.
Liability after Foreclosure
If your lender forecloses on this property and the foreclosure does not
cover the amount of unpaid balance on this loan,
state law may protect you from liability for the unpaid balance. If you
renance or take on any additional debt on this property, you may
lose this protection and have to pay any debt remaining even after
foreclosure. You may want to consult a lawyer for more information.
state law does not protect you from liability for the unpaid balance.
Renance
Renancing this loan will depend on your future nancial situation,
the property value, and market conditions. You may not be able to
renance this loan.
Tax Deductions
If you borrow more than this property is worth, the interest on the
loan amount above this property’s fair market value is not deductible
from your federal income taxes. You should consult a tax advisor for
more information.
Questions? If you have questions about the
loan terms or costs on this form, use the contact
information below. To get more information
or make a complaint, contact the Consumer
Financial Protection Bureau at
www.consumernance.gov/mortgage-closing
?
112 TILA-RESPA INTEGRATED DISCLOSURE | CLOSING DISCLOSURE
3.6.4 Conrm Receipt
The creditor, at its option, may include a line for the signatures of the consumers
to Conrm Receipt. Although the creditor only lists persons to whom credit is
extended as Borrowers on the rst page of the Closing Disclosure, in rescindable
transactions, the creditor may add signature lines for other consumers who have
the right to rescind. If the creditor includes a signature line to Conrm Receipt, the
creditor must also include a statement that the signature only signies receipt of
the Closing Disclosure. (§§ 1026.38(s), 1026.37(n)(1))
If the creditor does not include a statement line or the consumer’s signature, add a
statement to the Other Disclosures concerning Loan Acceptance that states: “You
do not have to accept this loan because you have received this form or signed a
loan application.” (§§ 1026.38(s)(2), 1026.37(n)(2))
Contact Information
Other Disclosures
Conrm Receipt
By signing, you are only conrming that you have received this form. You do not have to accept this loan because you have signed or received
this form.
Applicant Signature Date Co-Applicant Signature Date
CLOSING DISCLOSURE PAGE 5 OF 5 • LOAN ID # 0000000000
Total of Payments. Total you will have paid after
you make all payments of principal, interest,
mortgage insurance, and loan costs, as scheduled.
Finance Charge. The dollar amount the loan will
cost you.
Amount Financed. The loan amount available after
paying your upfront nance charge.
Annual Percentage Rate (APR). Your costs over
the loan term expressed as a rate. This is not your
interest rate.
Total Interest Percentage (TIP). The total amount
of interest that you will pay over the loan term as a
percentage of your loan amount.
Loan Calculations
?
Lender Mortgage Broker Real Estate Broker (B) Real Estate Broker (S) Settlement Agent
Name Ficus Bank
FRIENDLY MORTGAGE
BROKER INC.
RELIABLE REALTY CO. REALTY PROS
ABC Settlement
Address 4321 Raven Blvd.
Somecity, MD 54321
1234 Terrapin Dr.
Somecity, MD 54321
1776 Chesapeake St.
Ste 405
Anytown, MD 12345
3456 Oriole Ave.
Anytown, MD 12345
5432 Free State Blvd.
Ste 405
Somecity, MD 54321
NMLS ID 111111
222222
License ID
Contact Joe Smith
JIM TAYLOR KELLY GREEN STEVE WALSH NANCY WILSON
Contact NMLS ID 487493
394784
Contact
License ID
Email
JSMITH
FICUSBANK.COM
JTAYLOR
FRNDLYMTGBRKR.CO
KGREEN
RREALTY.COM
SWALSH
REALTYPROS.COM
NWILSON
ABCSETTLEMENT.COM
Phone 111-222-3333
3334445555
444-555-6666 555-666-7777 666-777-8888
?
Appraisal
If the property was appraised for your loan, your lender is required to
give you a copy at no additional cost at least 3 days before closing.
If you have not yet received it, please contact your lender at the
information listed below.
Contract Details
See your note and security instrument for information about
• what happens if you fail to make your payments,
• what is a default on the loan,
• situations in which your lender can require early repayment of the
loan, and
• the rules for making payments before they are due.
Liability after Foreclosure
If your lender forecloses on this property and the foreclosure does not
cover the amount of unpaid balance on this loan,
state law may protect you from liability for the unpaid balance. If you
renance or take on any additional debt on this property, you may
lose this protection and have to pay any debt remaining even after
foreclosure. You may want to consult a lawyer for more information.
state law does not protect you from liability for the unpaid balance.
Renance
Renancing this loan will depend on your future nancial situation,
the property value, and market conditions. You may not be able to
renance this loan.
Tax Deductions
If you borrow more than this property is worth, the interest on the
loan amount above this property’s fair market value is not deductible
from your federal income taxes. You should consult a tax advisor for
more information.
Questions? If you have questions about the
loan terms or costs on this form, use the contact
information below. To get more information
or make a complaint, contact the Consumer
Financial Protection Bureau at
www.consumernance.gov/mortgage-closing
?
FIGURE 53: CONFIRM RECEIPT TABLE OF THE CLOSING DISCLOSURE
113 TILA-RESPA INTEGRATED DISCLOSURE | ADDITIONAL INFORMATION
4. Where can I nd a copy
of the TILA-RESPA
Rule and get more
information about it?
You can nd the TILA-RESPA Rule on the Bureau’s website at consumernance.
gov/policy-compliance/guidance/implementation-guidance/tila-respa-disclosure-
rule/.
In addition to a complete copy of the TILA-RESPA Rule, that web page also
contains the Compliance Guide and other useful resources related to regulatory
implementation including samples of completed Loan Estimates and Closing
Disclosures for different loan products.
Contact us
Online
consumernance.gov
By phone
(855) 411-CFPB (2372)
(855) 729-CFPB (2372) TTY/TDD
By mail
Consumer Financial Protection Bureau
P.O. Box 2900
Clinton, IA 52733
Email
info@consumernance.gov
