Closing Disclosure Page 3

Working with 2015 RESPA-TILA Regulations

2015 RESPA-TILA Workflow

The Closing Disclosure input forms (pages 1-5) enable you to review, edit, or enter information that is populated to the Closing Disclosure output form that is provided to the borrower at least three business days prior to consummation. Use the Closing Disclosure Page 3 to review the Calculating Cash to Close and Summaries of Transaction information that will be populated on the Closing Disclosure output form. This form is used to populate page 3 of the Closing Disclosure output form.

For mortgage transactions without a seller, an alternate version of the Closing Disclosure Page 3 is used. The alternate version includes a different Calculating Cash to Close section and a Payoffs and Payments section instead of a Summaries of Transactions section used on the standard version. For detailed information, refer to Alternate Version below.

Standard Version

The standard version of the Closing Disclosure Page 3 is disclosed for transactions with a seller. The standard version is enabled when the Use Alternate checkbox is cleared in the Calculating Cash to Close section on the Loan Estimate - Page 2 input form.

Calculating Cash to Close

The Calculating Cash to Close section compares amounts for the cash-to-close items disclosed to the borrower on the Loan Estimate and the Closing Disclosure. A description of the following cash-to-close items displays on the left:

Total Closing Costs (J) - Manually select an option from the list.
Closing Cost Paid Before Closing
Closing Cost Financed (Paid from your Loan Amount)
Down Payment/Funds from Borrower
Deposit
Funds for Borrower
Seller Credits
Adjustments and Other Credits
Cash To Close

Additional information about the cash-to-close items displays in the following columns to the right of each description:

Loan Estimate - The amount of each cash-to-close item as shown on the most recently disclosed Loan Estimate. The fields in this column are populated from the Calculating Cash to Close table on the Loan Estimate - Page 2. The Closing Costs Paid Before Closing amount is always 0, because the closing costs paid before closing are not disclosed on the Loan Estimate.
Final - The amount of each cash-to-close item as it will be disclosed on the Closing Disclosure. The fields in this column are populated from current disclosure data on other Encompass forms, primarily the 2015 Itemization and the Closing Disclosure - Page 2.
Did this change? - A Yes or No entry indicating whether the amount for the item as disclosed on the Loan Estimate differs from the amount disclosed on the Closing Disclosure.
Remarks - If Yes is populated in the Did this change? column, additional information displays in the Remarks column on the right. Some of these informational entries include amount fields, dropdown lists that you can edit, and references to details in other sections or on other forms.

To Edit the Calculating Cash to Close Amounts:

Click the Lock icon next to the to amount.
Type a new amount in the field.
To edit individual adjustments and credits fees, click the Edit icon in the Final column for the Adjustments and Other Credits field. A pop-up window opens with fields for descriptions and amounts for up to ten entries.
Edit, delete, or add entries as needed, and then click Close.

To Enter Detailed Adjustments and Credits:

Click the Edit icon next to the amount to open the Adjustments and Other Details pop-up window.

Summaries of Transactions

The Summary of Transactions is used to disclose the amounts due from and already paid by the borrower at closing, and the amounts due to and due from the seller at closing. Complete the Summary of Transactions sections for the borrower and seller.

Borrower's Transactions

K. Due from Borrower at Closing

The amounts used to calculate the total amount due from the borrower to close the loan, including additional adjustments and adjustments for items paid by the seller in advance that the borrower will pay. The sub-total due from the borrower displays in the header for this section.

L. Paid Already by or on Behalf of Borrower at Closing

The amounts paid by the borrower, including credits, adjustments, and reductions for items unpaid by the seller that the borrower will pay.

Calculation

The total cash due from (or to) the borrower, calculated by subtracting the total already paid by the borrower (section L above) from the total due from the borrower at closing (section K above).

Seller's Transactions

M. Due to Seller at Closing

The gross amount due to the seller at the close of the loan, including additions for items paid by the seller that will be reimbursed.

N. Due from Seller at Closing

Reductions in the amount due to the seller, including payoff of loans and unpaid items that the seller will pay.

Calculation

The total cash due to (or from) the seller, calculated by subtracting the total due from the seller (section N above) from the total due to the seller at closing (section M above).

Note: To generate a seller-only version of the Closing Disclosure, select the Omit from Print checkbox at the top of the Seller's Transactions section. Selecting this option generates an additional print version of the Closing Disclosure with the Seller's Transaction information omitted from the Closing Disclosure Page 3 output form. If enabled by your administrator, an electronic version of a seller-only Closing Disclosure will also be available.

To Edit Liabilities:

Click the Show All (VOL) button to open the Quick Entry - VOL pop-up window and edit liabilities as needed.

To View and Edit Payoff Entries:

Click the Payoffs & Payments button to open the Payoffs and Payments pop-up window. The pop-up has two sections:
- Disbursement to Others - This section lists the liabilities with balances, including a checkbox to indicate whether the liability is Paid Off, a checkbox to indicate that the paid off amount will be included for that borrower pair in the Payoffs and Payments (K) field (field ID CD3.X84), and columns for the number assigned to the borrower pair, Creditor Name, Description of Purpose, Balance, and Payoff Amount.
- Calculating Cash to Close - This sections displays the information from the Calculating Cash to Close section on the Closing Disclosure - Page 3.

In the Disbursement to Others section, select a Paid Off checkbox to mark the disbursement as paid and to include the paid off amount for that borrower pair in the calculated Refinance field (field ID 1092) on the borrower pair’s 1003 and other forms.
Select the Include checkbox to include the paid off amount for that borrower pair in the Total Payoffs and Payments (K) field. To exclude the paid off amount for a borrower pair, clear the checkbox.
Click an entry in the UCD Type column to select a different payoff type from the list. By default, the UCD Type is populated from the Account Type field for the VOL entry on the VOL input form.
The following data is updated as the Paid Off checkboxes are selected or cleared:
- The Total Payoffs and Payments field at the bottom of the Disbursement to Others section displays the total amount for all disbursements that have the Paid Off checkbox selected.
- The Calculating Cash to Close section is updated based on the selections in the Paid Off checkboxes.

To Enter Detailed Adjustments and Credits:

Click the Edit icon at the top of the Seller's Transaction column to open the Adjustments and Other Credit Details pop-up window.

Alternate Version

An alternate version of the Closing Disclosure Page 3 is disclosed for transactions without a seller (refinance loans). The alternate version is enabled when the Use Alternate checkbox is selected in the Calculating Cash to Close section on the Loan Estimate - Page 2 input form.

Calculating Cash to Close

The alternate Calculating Cash to Close section compares amounts for cash-to-close items disclosed to the borrower on the Loan Estimate and the Closing Disclosure, but the Calculating Cash to Close items are different from the items listed on the Calculating Cash to Close section on the standard Closing Disclosure - Page 3. For the alternate version, the following descriptions of cash-to-close items displays on the left:

Loan Amount
Total Closing Costs (J) - Manually select an option from the list.
Closing Costs Paid before Closing
Total Payoffs and Payments
Cash to Close
Text box noting whether the funds are paid To Borrower or From Borrower

The following additional information displays in the columns to the right of each description:

Loan Estimate - The amount of each fee as shown on the most recently disclosed Loan Estimate that has not been excluded from the Disclosure Tracking timeline. The fields in this column are copied from the Calculating Cash to Close table on Page 2 of the Loan Estimate, with the exception of the Closing Costs Paid Before Closing. This amount is always 0, because the closing costs paid before closing are not disclosed in the Loan Estimate.
Final Amount - The amount of each fee as disclosed on the Closing Disclosure.
Did this change? - A Yes or No entry indicating whether the amount for the item as disclosed on the Loan Estimate differs from the amount disclosed on the Closing Disclosure.
Remarks - If Yes is populated in the Did this change? column, additional information about the change displays in the Remarks column on the right.

Payoff and Payments

The Payoffs and Payments section displays up to 15 liabilities that have been paid off by the borrower. Each entry includes an entry in the To column that lists the payee and a description of the purpose , and an entry in the Amount column that lists the amount of the paid-off liability. At the bottom of this section, the total of all entries displays in line K. Total Payoffs and Payments.

To Edit Liabilities:

Click the Show All (VOL) button to open the Quick Entry - VOL pop-up window and edit liabilities as needed.

To View and Edit Payoff Entries:

Click the Payoffs & Payments button to open the Payoffs and Payments pop-up window. The pop-up has two sections:

Disbursement to Others - This section lists the liabilities with balances, including a checkbox to indicate whether the liability is Paid Off, and columns for the Creditor Name, Description of Purpose, Balance, and Payoff Amount.
Calculating Cash to Close - This sections displays the information from the Calculating Cash to Close section on the Closing Disclosure - Page 3.

In the Disbursement to Others section, select a Paid Off checkbox to mark the disbursement as paid.
Click an entry in the Description of Purpose column to edit the description for a disbursement. By default, the purpose is populated from the Purpose field for the VOL entry on the VOL input form.
The following data is updated as the Paid Off checkboxes are selected or cleared:
- The Total Payoffs and Payments field at the bottom of the Disbursement to Others section displays the total amount for all disbursements that have the Paid Off checkbox selected.
- The Calculating Cash to Close section is updated based on the selections in the Paid Off checkboxes.

To Add Non-VOL UCD Adjustment Data:

Click the Payoffs & Payments icon.
On the Payoffs and Payments pop-up window, click the Add button.
On the Add Other Adjustments pop-up window, complete the following information:
- Adjustment Type – Select Gift, Grant, Rebate Credit, or Othe from the dropdown list:
  
  When the Other option is selected, a Credit checkbox displays on the Add Other Adjustment pop-up window. By default, the checkbox is cleared, indicating that the entry is a charge to the borrower. When a user selects the checkbox and clicks OK, the item is added to the Payoffs and Payments window as a negative value that reduces the Total Payoffs and Payments amount and total Cash to Close amount. When a user does not select the checkbox and clicks OK, the item is added to the Payoffs and Payments window as a positive value that is added to the Total Payoffs and Payments amount and total Cash to Close amount.
- Adjustment Description – Enter a description of the adjustment (up to 100 characters)
- Adjustment Other Description – If Other is selected for the Adjustment Type, enter a description of the Free Entry Field.
- Adjustment Amount – Enter the amount of the adjustment.
When finished, click OK.

Double-click a non-VOL entry to open the Add Other Adjustments pop-up window for the entry.
The Paid Off checkbox is disabled for non-VOL entries.
The Include checkbox is selected by default and indicates that the paid off amount for that borrower pair will be included in the Total Payoffs and Payments (K) field. To exclude the paid off amount for a borrower pair, clear the checkbox.
When the Include checkbox is selected for an entry on the Payoffs and Payments table, the adjustment is included in the calculation for the Estimate Total Payoffs and Payments (field ID LE2.X31) on the Loan Estimate Page 2, the K. Total Payoffs and Payments (field ID CD3.X80) on the Closing Disclosure Page 3, and the Final Payoffs and Payments (K) (field ID CD3.X84) on the Closing Disclosure Page 3. For purposes of calculation, all adjustments added via non-VOL process are treated as credits (reducing borrower cash to close). When the Include checkbox is cleared or when a record is deleted, Encompass updates the calculations to remove the adjustment from the three fields mentioned in the preceding bullet point.
When there are non-VOL based entries in the table and a user switches from alternate to standard disclosures, a confirmation message notifies the user that switching to standard disclosures will delete all non-VOL entries from the pop-up window. The user can then click OK to proceed or Cancel to continue using alternate disclosures. When no non-VOL entries are in the table, a confirmation message does not display when the user switches from alternate to standard disclosures.
Non-VOL data is transferred to the Encompass Docs Service for inclusion on the disclosure forms for the Closing Disclosure Page 3 and its Addendum. If there are more than 15 entries in the Payoffs and Payments table, including the non VOL based adjustments, the data prints on the Addendum.