We outlined three disclosure options for the Deferred Payment Loan (DPL) under TRID in November 2015. Due to lender feedback around system and LOS issues, as well as our Master Servicer’s ability to review multiple disclosure options, we will no longer require that lenders adopt Option 1 by April 1. You may continue to use any of the three disclosure options listed below.
Please ensure that your loan meets the requirements of the option you select. Pay particular attention to the “1% fees charged to borrower” test if you use the partial exemption (Option 3).
For questions regarding which option is best fits your company processes, or for general questions on disclosing on the DPL program, please contact Michael Peterson.
Option 1: TRID Disclosures
You charged a Loan Processing Fee (fee must be at least $10, but no more than $100). The loan was covered by TILA in addition to RESPA.
Action: Provide the following TRID disclosures to U.S. Bank HFA Division:
- Loan Estimate
- Closing Disclosure
Option 2: RESPA Disclosures
You did not charge a loan processing fee and did not use the RESPA partial exemption (12 CFR §1026.3(h) and HUD 1024.5), the loan was not covered by TILA but was covered by RESPA.
Action: Provide the following RESPA documents to U.S. Bank HFA Division:
- Good Faith Estimate (GFE)
- HUD 1
Option 3: Company Generated Disclosures
You used the partial exemption (12 CFR §1026.3(h) and HUD 1024.5), so the loan was not covered by TILA but was covered by RESPA. You ensured the loan met the 1% fee cap and no fees in excess of this were charged to the borrower. Eligible fees include recording, application, and homeownership counseling.
Action: Provide a set of disclosures to U.S. Bank HFA Division that includes the elements required by 12 CFR Part §1026.18 (Regulation Z).* We have developed a sample disclosure for optional use with loans that use the partial exemption.
*Finance charge, APR, Total of payments due, Security interest, and Assumption policy are all covered with a TIL. Itemization of amount financed, terms of repayment, and a reference to the loan contract (note) need to also be disclosed.