Pub. 4 2014-2015 Issue 1

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S July • August 2014 11 • The lender is allowed to rely on evidence that the consumers actually received the disclosure earlier, if the disclosure is sent by email (assuming the consumer has consented to email and complied with E-sign requirements), and receipt is acknowledged the same day as the lender sent them, then the lender can rely on the actual day of receipt and consummation may take place on the third business day after the actual receipt. • The loan closing disclosure can change from the time received by the borrower and consummation unless (a) the APR changes by 1/8 of 1%, or (b) the loan product changes, or (c) a prepayment penalty is added. In any of those three instances, a re-disclosure must be received by the borrower three business days before consummation, meaning that consummation would be delayed. Fourth, the “tolerance levels” are kept intact; however, some of the items falling within the “buckets” will be changed for loans that require the disclosures. In the zero tolerance bucket; there can be no increase for any item in this bucket in the amount paid at closing over the estimated amount on the loan estimate form for borrower paid: • Charges paid to the lender and/or broker for their own fees, such as origination charges; • Transfer taxes; • Fees paid to an affiliate of the lender or broker for a service required by the lender (this is a change from the current tolerances); and • Fees paid to an unaffiliated service provider for a service required by the lender if the borrower was not allowed to shop for the provider (which is not a zero tolerance item under current HUD regulations) In the 10 percent bucket, charges for services that can in- crease, but by no more than 10 percent in the aggregate are: • Fees paid to an third-party provider not affiliated with the lender for a service required by the lender if the lender permitted the borrower to shop and the borrower still selected off the lender’s provider list; and • Recording fees paid by the borrower Changes that can increase by an unlimited amount over the estimated amounts on the loan estimate form include: • Prepaid interest; • Property insurance; • Amounts for escrow deposits (taxes, insurance); • Fees paid to third-party providers selected by the borrower and not on the lender’s list of providers; and • Charges paid for third-party services not required by the lender The lender can issue a revised Loan Estimate if a “changed circumstance” occurs. If a “changed circumstance” occurs causing an increase in charges above the applicable “tolerance level” the lender must provide an updated loan estimate form within three business days after having knowledge of the change. Examples of “changed circumstances” that would allow for revi- sions in the loan estimate include: • The consumer asks for a change; • Information provided in the application was inaccurate or has changed since the application; • New information as to the consumer or transaction is provided that the lender had not relied on; • The Loan Estimate expires; • Interest rate dependent charges (when the rate is locked by the consumer, lender must provide revised loan estimate showing all such changed charges); and • Extraordinary event occurs beyond the control of any party It is critical to start now on system changes, training (to in- clude how to complete the new forms), policy and procedures/ processes. It may seem like the mandatory compliance date of Aug. 15, 2015, is far off, but the clock is ticking and there is a lot of work to be done. n CEF has helped over 1,400 small businesses in Colorado with flexible rates and terms for loans up to $250,000. Contact us today at 303.860.0242 or toll-free at 888.554.5539 with a referral coloradoenterprisefund.org Sweet Action Ice Cream