Using the Correct Disclosure Package

By Amy Avery, DocuTech Director of Compliance

The fee amounts disclosed on the Good Faith Estimate and the corresponding fee amounts charged to the borrower at closing must be displayed side-by-side on page three of the new HUD-I Settlement Statement, effective with the new RESPA Rule.  Each fee is placed into the proper tolerance category (Charges That Cannot Increase, Charges That in Total Cannot Increase More Than 10%, and Charges That Can Change) and it is important that the GFE column values accurately affect what was actually disclosed to the borrower initially.

If Early/Initial Disclosures for a loan are printed through ConformX, the dollar amounts disclosed on the GFE will be imported into the loan at Closing, and will print on the related row on page three of the HUD-I in the “Good Faith Estimate” column.  If there is a “changed circumstance” (as defined in 24 CFR § 3500.2) during the application process, a new GFE may be issued.  Under this situation it is important to print the new GFE and related documents with the ConformX Initial Disclosures document package.  Then the updated GFE fee amounts will be used at Closing.

Due to the Mortgage Disclosure Improvement Act (MDIA) that became effective on July 30, 2009, if the APR on the early TIL is under-disclosed by more than 1/8 of a percent and the finance charge is under-disclosed more than $100.00, the lender must give revised TILA disclosures to the borrower.  A new document package type, TILA Redisclosure, will be available to ConformX users in order to print a revised Federal Truth-In-Lending Disclosure Statement and Itemization of Amount Financed.  

It is important to use the new TILA Redisclosure package type to redisclose the TILA disclosures if there is no RESPA-defined “changed circumstance”, and not the Initial Disclosure package type.  The original GFE dollar values will remain un-edited when the TILA Redisclosure package is used.  A revised GFE should not be given if there is no “changed circumstance”, and therefore the GFE will not print in the TILA Redisclosure package.