Frequently Asked Questions

Know Before You Owe (KBYO or TRID)

Categories:

Loan Estimate – Details of Disclosure Completion

By using a composite rate.

If there is no mortgage broker involved in the transaction, the column for the Mortgage Broker is left blank; but the column remains on the Closing Disclosure Contact Information table. In the event there is more than one of each person required for a column (e.g., two sellers' real estate brokers splitting a commission), then the space in the contact information table may be altered to accommodate the information for such persons. If the space does not accommodate the addition of such information, an additional table may be provided on a separate page, with an appropriate reference to the additional table. However, before an additional table on an additional page is created, the system may omit a column on the table that is inapplicable or, if necessary, replace an inapplicable column with the contact information for the additional person.

There are no provisions requiring use or disclosure of the TIP beyond disclosure on the Loan Estimate and Closing Disclosure.

Section §1026.28 provides information regarding inconsistent disclosure requirements where there is a conflict between federal and state laws. This section additionally allows for a state to request a determination by the CFPB regarding the inconsistencies. You will need to ascertain from each state where this conflict exists and how the state is anticipating compliance with those state laws inconsistent with federal regulation.

There is no tolerance specified regarding the TIP.

If the cost of the builder’s risk insurance is being paid by the consumer and the costs are known prior to consummation for the construction loan, or can be estimated at the time of consummation, then in good faith they would be disclosed.

Signature lines are optional and their use is determined solely by the creditor.

The TIP is based upon the note amount.

When calculating the total interest percentage, the creditor assumes that the consumer will make each payment in full and on time, and will not make any additional payments. The figures provided by the amortization schedule are for determining the amount of interest using the assumptions in the first sentence.

For Adjustable Rate products under §1026.37(a)(10)(i)(A), §1026.37(l)(3) requires that the creditor compute the total interest percentage in accordance with comment 17(c)(1)-10 (using a composite rate calculation). For Step Rate products under §1026.37(a)(10)(i)(B), §1026.37(l)(3) requires that the creditor compute the total interest percentage in accordance with §1026.17(c)(1) and its associated commentary.

TIP = total amount of interest (including prepaid interest). Discount points are prepaid finance charges but they are not "interest" for purposes of the TIP.

The Total Interest Percentage (TIP) = The total amount of interest that is paid over the loan term as a percentage of the loan amount. 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%.

Not necessarily. The Adjustable Payment Table is disclosed when the periodic principal and interest payment may change after consummation. If the loan does not contain these features, the AP Table is not disclosed.

The state abbreviation for the associated license number.

If the interest rate may increase after consummation, a separate table under the master heading "Closing Cost Details" and under the heading "Adjustable Interest Rate (AIR) Table" that contains the following information is required:

  1. Index and margin. If the interest rate may adjust and the product type is not a "Step Rate" under paragraph (a)(10)(i)(B) of this section, the index upon which the adjustments to the interest rate are based and the margin that is added to the index to determine the interest rate, if any, labeled "Index + Margin."
  2. Increases in interest rate. If the product type is a "Step Rate" and not also an "Adjustable Rate" under paragraph (a)(10)(i)(A) of this section, the maximum amount of any adjustments to the interest rate that are scheduled and pre-determined, labeled "Interest Rate Adjustments."
  3. Initial interest rate. The interest rate at consummation of the loan transaction, labeled "Initial Interest Rate."
  4. Minimum and maximum interest rate. The minimum and maximum interest rates for the loan, after any introductory period expires, labeled "Minimum/Maximum Interest Rate."
  5. Frequency of adjustments. The following information, under the subheading "Change Frequency":
    1. The month when the interest rate after consummation may first change, calculated from the date interest for the first scheduled periodic payment begins to accrue, labeled "First Change"; and
    2. The frequency of interest rate adjustments after the initial adjustment to the interest rate, labeled, "Subsequent Changes."
  6. Limits on interest rate changes. The following information, under the subheading "Limits on Interest Rate Changes":
    1. The maximum possible change for the first adjustment of the interest rate after consummation, labeled "First Change"; and
    2. The maximum possible change for subsequent adjustments of the interest rate after consummation, labeled "Subsequent Changes."
The TIP is a percentage of the amount of credit extended which would correspond to the Note Amount. Amount Financed is a defined term in Regulation Z, and has its own calculation and meaning.

Yes, although the NMLSR ID should be entered for the appropriate party if one has been assigned.

In the event the creditor or the mortgage broker has not been assigned an NMLSR ID, the license number or other unique identifier issued by the applicable jurisdiction or regulating body with which the creditor or mortgage broker is licensed and/or registered shall be disclosed.

The name and NMLSR ID of the individual loan officer (labeled "Loan Officer" and "NMLS ID/License ID," respectively) of the creditor and the mortgage broker, if any, who is the primary contact for the consumer are required. In the event the individual loan officer has not been assigned an NMLSR ID, the license number or other unique identifier issued by the applicable jurisdiction or regulating body with which the loan officer is licensed and/or registered shall be disclosed.

You will need to look at the amortization schedule. Add up all of the "interest payments" for the life of loan, then add the amount of per diem interest, and finally divide that amount by the note amount.

Yes. There also would be an associated lender credit (non-specific) disclosed under the total closing costs.

Yes. It would appear either as a Lender Credit under the total closing costs or as a Seller Credit under the "Calculating Cash to Close" section.

Under "Other Costs, H. Other". Any other amounts 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, a descriptive label of each such amount, and the subtotal of all such amounts should be entered, including:

  • Title Insurance Fees are labeled as "Title – "
  • Items disclosing any premiums paid for separate insurance, warranty, guarantee, or event-coverage products labeled as (optional). For example:
    • Title - Owner’s Title Policy (optional)
    • Home Warranty Fee (if paid by borrower)
    • Real Estate Commission (if paid by borrower)

Under "Other Costs, H. Other". Any other amounts 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, a descriptive label of each such amount, and the subtotal of all such amounts should be entered, including:

  • Title Insurance Fees are labeled as "Title – "
  • Items disclosing any premiums paid for separate insurance, warranty, guarantee, or event-coverage products labeled as (optional). For example:
    • Title - Owner’s Title Policy (optional)
    • Home Warranty Fee (if paid by borrower)
    • Real Estate Commission (if paid by borrower)
The Loan Estimate applies to all estimated closing costs disclosed in good faith whether the charge was paid by or imposed on the consumer.

In Section J. Total Closing Costs represent the sum of non-specific lender credits and specific lender credits. Non-specific lender credits are generalized payments from the creditor to the consumer that do not pay for a particular fee. Specific lender credits are specific payments, such as a credit, rebate, or reimbursement, from a creditor to the consumer to pay for a specific fee. Non-specific lender credits and specific lender credits are negative charges to the consumer. See also 1026.19(e)(3)(iv)(D) and comment 19(e)(3)(iv)(D)-1 for a discussion of lender credits in the context of interest rate dependent charges. Lender credits = sum of non-specific lender credits and specific lender credits disclosed as a negative number.

Disclosures may be estimated when the exact information is unknown at the time disclosures are made. Information is unknown if it is not reasonably available to the creditor at the time the disclosures are made. The "reasonably available" standard requires that the creditor, acting in good faith, exercises due diligence in obtaining information.

To the extent known by lender, disclose as Seller Credits under Calculating Cash to Close.

Yes, in "Other Costs, H. Other". Any other amounts 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, a descriptive label of each such amount, and the subtotal of all such amounts should be entered, including:

  • Title Insurance Fees are labeled as "Title – "
  • Items disclosing any premiums paid for separate insurance, warranty, guarantee, or event-coverage products labeled as (optional). For example:
    • Title - Owner’s Title Policy (optional)
    • Home Warranty Fee (if paid by borrower)
    • Real Estate Commission (if paid by borrower)

To the extent known by lender, disclose as Seller Credits under Calculating Cash to Close. Seller Credits are the total amount the seller will pay for total loan costs as determined by §1026.37(f)(4) and total other costs as determined by §1026.37(g)(5), to the extent known, and disclosed as a negative number. Seller Credits can be defined as:

  • Seller Credits = sum of non-specific seller credits and specific seller credits, to the extent known, disclosed as a negative number.

It still needs to be disclosed. It would appear as a Seller Credit under the "Calculating Cash to Close" section.

You will either need to ascertain the fees charged by each of these title companies, you have the option of using "average charges", or the use of estimates in "good faith".

The document preparation fee would still be considered an origination charge and be located on the Loan Estimate under the "Closing Cost Details – Origination charges" section. Under the subheading "Origination Charges," an itemization of each amount and a subtotal of all such amounts that the consumer will pay to each creditor and loan originator for originating and extending the credit should be entered.

Commentary to this section provides that "Items that are listed under the subheading "Origination Charges" may include, for example, application fee, origination fee, underwriting fee, processing fee, verification fee, and rate-lock fee."

Depending on the transaction, for purposes of the Calculating Cash to Close Section, Adjustments and Other Credits line, Commentary ¶37(h)(1)(vii)-6 states: "Adjustments that require additional funds from the consumer pursuant to the real estate purchase and sale contract,… or adjustments that will be disclosed on the Closing Disclosure… [may] be included [on this line]… because the amount disclosed is a sum of adjustments and other credits, [and] such amount would reduce the total amount disclosed. Additional examples of such adjustments for additional funds from the consumer include prorations for property taxes and homeowner’s association dues."

This scenario only applies in those states which have allowances for reduced lender policy premiums when a simultaneous owner’s policy is also issued. The CFPB and Title Insurance providers associations are aware of this conflict and the title association (ALTA) has prepared documentation for use by title insurers for this purpose. It would be recommended you work with your legal counsel or compliance experts to determine if and how you may want to identify this issue to the consumer.

Under the subheading "Taxes and Other Government Fees," on the first line, the sum of all recording fees and other government fees and taxes (except for transfer taxes paid by the consumer and disclosed) are to be entered. If an amount required to be disclosed by this paragraph (g)(1) is not charged to the consumer, the amount disclosed on the applicable line required by this paragraph (g)(1) must be blank.
Commentary ¶37(g)(1) Taxes and other government fees, states:

"Recording fees listed under §1026.37(g)(1) are fees assessed by a government authority to record and index the loan and title documents as required under State or local law. Recording fees are assessed based on the type of document to be recorded or its physical characteristics, such as the number of pages. Unlike transfer taxes, recording fees are not based on the sale price of the property or loan amount. For example, a fee for recording a subordination agreement that is $20, plus $3 for each page over three pages, is a recording fee, but a fee of $1,250 based on 0.5 percent of the loan amount is a transfer tax, and not a recording fee.

No additional items may be listed under the subheading in §1026.37(g)(1)."

It depends on the type of payment: Specific fees can be found under the following scenarios:

Services Did Not Shop For -

  • Fee charged at consummation and is not a prepayment of future premiums over a specific future time period or a payment into an escrow account. Government funding fees include VA Funding Fee, USDA guarantee fee, or any other fee paid to a government entity as part of a governmental loan program, that is paid at consummation.
Services Did Shop For -
  • Could apply if creditor allowed consumer to shop for PMI; provided fee is charged at consummation; is not a prepayment of future premiums over a specific future time period; is not a payment into an escrow account.
Prepaids -
  • Fee is prepayment of future premiums over a specific future time period. "Mortgage insurance or any functional equivalent" means amounts identified in 1026.4(b)(5).
Initial Escrow Payment at Closing -
  • Fee is a payment into an escrow account.

Creditors determine the level of itemization of "Origination Charges" that is appropriate. The creditor may use a general label that uses terminology that clearly and conspicuously describes the service that is disclosed as an origination charge pursuant to §1026.37(f)(1). Items that are listed under the subheading ‘‘Origination Charges’’ may include, for example, application fee, origination fee, underwriting fee, processing fee, verification fee, and rate-lock fee.

Origination charges other than "points" are disclosed using the dollar amount. For purposes of the Loan Estimate and Closing Disclosure, "points" are charged in connection with the transaction to reduce the interest rate and disclosed as a percentage and a dollar amount.

It depends on type of payment. Specific fees should be placed under the following categories:

  • B. Services Cannot Shop For
    • The following are examples of fees in this section: homeowner’s association certification fee...
  • H. Other
    • Examples of other items disclosed in this section if the creditor is aware of those items when it issues the Loan Estimate: homeowner’s association and condominium charges associated with the transfer of ownership.
  • Calculating Cash to Close Section, Adjustments and Other Credits
    • "Adjustments that require additional funds from the consumer pursuant to the real estate purchase and sale contract,… or adjustments that will be disclosed on the Closing Disclosure… [may] be included [on this line]… because the amount disclosed is a sum of adjustments and other credits, such amount would reduce the total amount disclosed. Additional examples of such adjustments for additional funds from the consumer include prorations for property taxes and homeowner’s association dues."

What will be required is a statement that the consumer will not have an escrow account, the reason why an escrow account will not be established, a statement that the consumer must pay all property costs, such as taxes and homeowner’s insurance, directly, a statement that the consumer may contact the creditor to inquire about the availability of an escrow account, and a table, titled "No Escrow," that contains, if an escrow account will not be established, an itemization of the following:

The estimated total amount the consumer will pay directly for charges described in §1026.37(c)(4)(ii) during the first year after consummation that are known to the creditor and a statement that, without an escrow account, the consumer must pay the identified costs, possibly in one or two large payments, labeled "Property Costs over Year 1."

In disclosing the "Closing Cost Details" all loan costs associated with the transaction are to be labeled using terminology that describes each item, subject to the requirements of paragraphs §1026.37(f)(1)(i), §1026.37(f)(2)(i), and §1026.37(f)(3)(i). The item prescribed in paragraph (f)(1)(i) of this section for points must be the first item listed in the disclosure pursuant to paragraph (f)(1) of this section. All other items must be listed in alphabetical order by their labels under the applicable subheading.

Yes. Wherever "monthly" is used to describe the frequency of any payments or uses "month" to describe the applicable unit-period the creditor can substitute the appropriate term to reflect the fact that the transactions terms provide for other than monthly periodic payments, such as bi-weekly or quarterly payments.

The Loan Estimate contains good faith estimates of the fees and charges that will be paid by or imposed on the consumer. A charge ‘‘paid by or imposed on the consumer’’ refers to the final amount for the charge paid by or imposed on the consumer at consummation or settlement, whichever is later.

The loan estimate requires the creditor to disclose the initial periodic payment or range of payments. The disclosure required is of the actual periodic payment or range of payments that corresponds to the interest rate that will apply at consummation. Commentary ¶37(c)(1)(i)(C)-1, states:

"Mortgage insurance or any functional equivalent" includes any mortgage guarantee that provides coverage similar to mortgage insurance (such as a United States Department of Veterans Affairs or United States Department of Agriculture guarantee), even if not technically considered insurance under State or other applicable law. The fees for such a guarantee are included in "mortgage insurance premiums."

Commentary ¶37(c)(1)(i)(C)-2, states:

"The table required by §1026.37(c) should reflect the consumer's mortgage insurance premiums until the date on which the creditor must automatically terminate coverage under applicable law, even though the consumer may have a right to request that the insurance be cancelled earlier. Unlike termination of mortgage insurance, a subsequent decline in the consumer's mortgage insurance premiums is not, by itself, an event that requires the disclosure of additional separate periodic payments or ranges of payments in the table required by §1026.37(c). For example, some mortgage insurance programs annually adjust premiums based on the declining loan balance. Such annual adjustment to the amount of premiums would not require a separate disclosure of a periodic payment or range payments.



Where "mortgage insurance or any functional equivalent" decreases, the projected payments table requires the disclosure of the maximum amount payable for mortgage insurance premiums corresponding to the principal and interest payment for the column under which it is disclosed pursuant to 1026.37(c)(2)(i)."

An addendum to the Loan Estimate may not be used for items described under "Origination Charges" or "Services you cannot shop for". If the creditor is not able to itemize every service and every corresponding charge required in two sections, the remaining charges must be disclosed as an aggregate amount in the last line permitted under each section, as applicable, labeled "Additional Charges."

An addendum to the Loan Estimate may be used for items described in the "Services you can shop for". If the creditor is not able to itemize all of the charges required to be disclosed in the number of lines provided, the remaining charges must be disclosed as follows:

(A) Label the last line permitted with an appropriate reference to an addendum (e.g., See attached page for additional items you can shop for) and list the remaining items on the addendum in accordance with the requirements in paragraphs (f)(3) and (5) of 1026.37; or

(B) Disclose the remaining charges as an aggregate amount in the last line permitted under paragraph (f)(3)(ii), labeled "Additional Charges."

The disclosures are required to reflect the terms of the legal obligation between the parties, and if any information necessary for an accurate disclosure is unknown to the creditor the creditor shall make the disclosure in good faith based on the best information reasonably available to the creditor. Information is unknown if it is not reasonably available to the creditor at the time the disclosures are made. The "reasonably available" standard requires that the creditor, acting in good faith, exercise due diligence in obtaining information. For example, the creditor must at a minimum utilize generally accepted calculation tools, but need not invest in the most sophisticated computer program to make a particular type of calculation. The creditor normally may rely on the representations of other parties in obtaining information. For example, the creditor might look to the consumer for the time of consummation, to insurance companies for the cost of insurance, or to realtors for taxes and escrow fees. The creditor may utilize estimates in making disclosures even though the creditor knows that more precise information will be available by the point of consummation.

The use of the Loan Estimate satisfies the requirement that the disclosure state clearly that the disclosure is an estimate.

It would be disclosed out to two decimals as 3.50%.

Yes. It would be reflected in the Projected Payments Table Estimated Escrow row, if applicable. It also would be reflected in the Estimated Taxes, Insurance & Assessments section. Section §1026.37(c)(4)(ii) defines what insurance is to be included, which are charges listed under section §1026.43(b)(8). This includes "premiums or other charges for insurance against loss of or damage to property, or against liability arising out of the ownership or use of property, written in connection with a credit transaction".

Unrounded number. It may be disclosed out to 2 or 3 decimals. If it is a whole number truncate at decimal point.

Examples: 3.5%, 3.000%, 3.00% Not Allowed
3.50%, 3.501%, 3% Allowed



It depends on the section of the Loan Estimate. Certain sections, like the numeric fields for the Projected Payments Table, require "0" in some circumstances and "-" in others. In the Calculating Cash to Close section, "$0" for no value appears to be appropriate. However, in the Loan Costs and Other Costs sections, it appears if a hardcoded named fee is zero; it would be left blank, and not contain a "$0" or "0". See Model H-24(B). See also Commentary ¶37-1. Where a disclosure is not applicable to a particular transaction, unless otherwise provided by §1026.37, form H-24 of appendix H to this part may not be modified to delete the disclosure from form H-24, or to state "not applicable" or "N/A" in place of such disclosure. The portion of the form pertaining to the inapplicable disclosure may be left blank, unless otherwise provided by §1026.37. For example, in a transaction for which the consumer does not pay points to the creditor to reduce the interest rate, the amounts required to be disclosed by §1026.37(f)(1)(i) may be left blank on form H-24. As provided in §1026.37(i) and (j), however, the adjustable payment and adjustable interest rate tables required by those paragraphs may be included only if those disclosures are applicable to the transaction and otherwise must be excluded.

If a dollar amount that is required to be rounded has component unrounded numbers, the unrounded numbers are added up and then the resulting amount is rounded. If an amount that is required to be rounded on the Loan Estimate is a total of one or more components that are also required to be rounded, the total amount must be calculated using such rounded amounts.

For example: The subtotals disclosed under §1026.37(f)(1), (2), and (3) are calculated using the rounded amounts. However, the amounts required to be disclosed by §1026.37(l) reference actual amounts for their components, rather than other amounts disclosed under §1026.37 and rounded pursuant to §1026.37(o)(4)(i), so they are calculated using unrounded numbers.

When rounding is required the number is rounded to the nearest dollar, whether it’s up or down.

The disclosure requires the applicable time zone for all times provided, as determined by the creditor.

The Loan Estimate is a creditor required disclosure; if a mortgage broker issues the Loan Estimate the creditor still maintains responsibility for ensuring that the requirements of §1026.19(e) have been met. It is recommended you communicate with the list of creditors that you do business with to determine what time zones would be accepted by the creditors in good faith. In this scenario the creditor to which the loan request is submitted would make decisions on whether or not the time zone on the Loan Estimate is acceptable in satisfying the requirements of §1026.37(a)(13).

There is no allowance for placing a notice on the Loan Estimate regarding the distinction that the rate lock expiration date for a refinance is tied to the funding date (disbursement date) rather than the closing date. If you want to make that distinction to the consumer, a recommendation could be that you either identify this fact in any rate lock agreement with the consumer or include a separate notice when the revised Loan Estimate is delivered stating this fact.

The creditor should use the time zone appropriate to the actual time zone at the time. For instance, in the example provided under the commentary to the rule states, "if the creditor is located in New York and determines that the Loan Estimate will expire at 5:00 p.m. in the time zone applicable to its location, while standard time is in effect, the disclosure must include a reference to the Eastern time zone (i.e., 5:00 p.m. EST)."

The disclosure requires the applicable time zone for all times provided, as determined by the creditor. The time zone itself would not change as result of daylight savings time being in effect.

The rule uses standard rounding (less than 5 is down, 5 and more is up).

In the case of a closed-end transaction where the purpose is a Home Equity Loan (meaning not a purchase money, refinance or construction loan), you would disclose the interest rate lock as "no" for purposes of the Loan Estimate and provide the expiration date with regard to estimated closing costs. There is no requirement to identify whether the interest rate is locked on the Closing Disclosure.

The additional language regarding "Before closing, your interest rate, points, and lender credits can change unless you lock the interest rate", is promulgated language contained in the model forms. There are no provisions allowing this statement to be removed in the case where the interest rate is locked when the Loan Estimate is delivered to the consumer.

Construction, unless the transaction also is associated with the purchase of the property.

The disclosure requires the applicable time zone for all times provided, as determined by the creditor.

For example: A creditor is located in New York and determines that the Loan Estimate will expire at 5:00 PM in the time zone applicable to its location while standard time is in effect would result in "5:00 p.m. EST".

A Loan ID Number determined by the creditor should be entered. Because it must allow for the identification of the particular credit transaction, a creditor must use a unique loan identification number, i.e., the creditor may not use the same loan identification number for different, but related, loan transactions (such as different loans to the same borrower). Where a creditor issues a revised Loan Estimate, the loan identification number must be sufficient to enable identification of the transaction.

The Loan Term should be stated in years or months, or both, as applicable.

For example:

Term >= 24 months and not equal to a whole number of years: 185 months = 15 yr. 5 mo.

Term < 24 months and does not equal to a whole number of years:
6 months = 6 mo.
16 months = 16 mo.
12 months = 1 year

At the time of delivery of the Loan Estimate, "If the creditor has obtained any appraisals or valuations of the property for the application at the time the disclosure is issued to the consumer, the value determined by the appraisal or valuation to be used during underwriting for the application is disclosed as the estimated property value."

At the time of delivery of the Closing Disclosure, "Where an estimate is disclosed, rather than an appraisal, the label for the disclosure is changed to ‘‘Estimated Prop. Value.’’

Assuming the Creditor's Loan ID# is not reasonably available to the mortgage broker it may be left blank. CFPB staff has said this is consistent with official commentary, which states the creditor's name can be left blank if unknown.

The date the Loan Estimate is delivered to the consumer or placed in the mail. The method of delivery does not affect the Date Issued. For example:

  • Creditor hand delivers LE to consumer on August 14
  • Creditor places LE in the mail on August 14

The address including the zip code of the property that secures or will secure the transaction (complete address for purposes of the U.S. Postal Service) should be entered. If the address is unavailable, you may disclose location of the property including the zip code, which is required in all instances. Location of the property includes location information, e.g., a lot number. Disclosure of multiple zip codes is permitted if the consumer is investigating home purchase opportunities in multiple zip codes.

In this case date the mortgage broker mails or delivers Loan Estimate to the consumer should be used, if the mortgage broker receives the application.
Yes. Regulation Z defines the date issued as the date the creditor or mortgage broker mails or delivers the Loan Estimate to the consumer. Therefore if a revised disclosure is issued it needs to reflect the revised date in which it is being re-delivered or mailed to the consumer.

There is not sufficient information to completely answer this question. In many cases, as long as the "broker or mini-correspondent" is acting in the capacity as a creditor in a true secondary market transaction then their name will go on the Loan Estimate as creditor. However, based on the wording of the question it appears as though the concern stems from determining who is considered the actual creditor on the transaction. The answer, given the question, is more subjective than it may seem. You should refer to the CFPB "Policy Guidance on Supervisory and Enforcement Considerations Relevant to Mortgage Brokers Transitioning to Mini-Correspondent Lenders," which offers guidance on determination of the true creditor based on the "real source of funding" and the "real interest of the funding lender" for specific clarification in this scenario.

For transactions without a mortgage broker; the creditor making the disclosures must be identified as the creditor. Creditor is a person who regularly extends consumer credit that is subject to a finance charge or is payable by written agreement in more than four installments (not including a down payment), and to whom the obligation is initially payable, either on the face of the note or contract, or by agreement when there is no note or contract.

On transactions with a mortgage broker; the name and address of the creditor must be disclosed, if known, even if the mortgage broker provides Loan Estimate to the consumer. The mortgage broker must make a good faith effort to disclose the name and address of the creditor, but if the name of the creditor is not yet known it may be left blank.

For transactions with multiple creditors; the creditors must agree among themselves which creditor must comply with the requirements that Regulation Z imposes on any or all of them.

See also the answer to the previous question, "What name is used for the Creditor/Lender?" The mortgage broker must make a good faith effort to disclose the name and address of the creditor, but if the name of the creditor is not yet known it may be left blank.



Disclaimer: The following information is intended for general information purposes with the goal of assisting ICE Mortgage Technology’s customers in complying with the new KBYO regulations. This information is provided as a courtesy to ICE Mortgage Technology’s customers and ICE Mortgage Technology makes no representation or warranty regarding the accuracy of the information set forth herein, and you may not rely on this information to ensure your company’s compliance with the KBYO regulations. This FAQ should not be construed as legal advice or opinion on any specific facts or circumstances, including the application of the KBYO regulations. You are advised to consult your own compliance staff or attorney regarding your specific residential mortgage lending questions or situation to ensure your compliance with all applicable laws and regulations.