REGZ-TIL (Truth-In-Lending) Disclosure
The Truth-In-Lending (TIL) disclosure provides the borrower with an overall view of the terms of the loan and its costs over time. Changes to fields on the REGZ-TIL are reflected on the 1003 and 2010 Good Faith Estimate (GFE) as appropriate. If you have completed the 1003 application for the borrower or copied values from a Loan Program template, many of these fields are already filled.
This help topic describes the REGZ-TIL. Your administrator can set a date when all new loans will use the RESPA 2010 forms or the 2015 RESPA-TILA forms by default. Within a loan file, you can switch between the 2015 forms (2015 Itemization, Loan Estimate, Closing Disclosure, RegZ-LE, and RegZ-CD), the 2010 forms (2010 Itemization, 2010 GFE , REGZ-TIL, Closing RegZ, and HUD-1), and the pre-2010 Itemization and HUD-1 as long as you have not yet sent your initial disclosure to the borrower. Click Forms on the Encompass menu bar, point to RESPA-TILA Form Version, and then click Old GFE and HUD-1, RESPA 2010 GFE and HUD-1, or RESPA-TILA 2015 LE and CD to change the forms to use for the loan.
Section Information
-
Select a checkbox to indicate if the information is an initial estimate or final disclosure.
-
Most of the fields in the top section are populated automatically based on information entered in the Disclosure Tracking tool when disclosures are made to the borrower.
For conventional loans, if the difference between the Disclosed APR and the Current APR is greater than .125, an alert is created notifying you that you should disclose the APR again. (For ARM loans, the alert is triggered if the difference between the APRs is greater than .25.)
-
For the Loan Program, click the Find icon to select a template of predefined loan terms and values.
-
For the Closing Cost Program, click the Find icon to select a template that calculates the closing costs using predefined rates and values.
-
If the information is not already populated, type the Date Prepared for the disclosure and the 1st Payment Date used to calculate the payment and aggregate escrow account schedules.
The basic loan amount and terms should be populated from the Borrower Summary form. If not, enter that information plus any additional terms required for the type of loan being created. For example, rates for Buydown and ARM mortgages, biweekly payments, potential negative amortization, and construction mortgage details.
If not already populated from the Borrower Summary form, enter the loan amount, followed by the additional terms required for the loan.
Encompass has temporarily stopped supporting temporary Buydown loans with an application date on or after January 30, 2011. Support will resume once the Federal Reserve Board clarifies how temporary Buydowns should be managed so that they comply with the Mortgage Disclosure Improvement Act (MDIA) Interim Rule for Closed-End Loans that went into effect on January 30, 2011.
The Buydown Mortgage fields are read-only be default. You may click the blue Lock icon to enter the terms of the Buydown subsidy manually. However, the REGZ-TIL output form will not be accurate if it contains Buydown data and you must acknowledge that you are knowingly proceeding at your own risk before entering data.
Encompass has temporarily stopped supporting temporary Buydown loans with an application date on or after January 30, 2011. Support will resume once the Federal Reserve Board clarifies how temporary Buydowns should be managed so that they comply with the Mortgage Disclosure Improvement Act (MDIA) Interim Rule for Closed-End Loans that went into effect on January 30, 2011.
The Buydown Mortgage fields are read-only be default. You may click the blue Lock icon to enter the terms of the Buydown subsidy manually. However, the REGZ-TIL output form will not be accurate if it contains Buydown data and you must acknowledge that you are knowingly proceeding at your own risk before entering data.
Enter the number of months that payments will be applied to the interest rate only. Select the Qualify using P&I checkbox to qualify the loan using an estimated payment that includes both principal and interest.
Select a method of calculation for the repayment schedule. For each option, the value represents the number of days per year used to calculate the loan's daily interest.
Select the checkbox to require mortgage payments every two weeks, rather than every month. For more information about biweekly loans, refer to the Process a Biweekly Loan topic.
In the first two fields in the Adjustable Rate Mortgage section, enter the maximum percentage that the loan can adjust at the first adjustment period and the number of months from the close of the loan to when the first rate adjustment can occur.
-
In the Adj Cap field (field ID 695), enter the maximum percentage that the loan rate can change at each adjustment, after the first adjustment.
-
In the Adj Period field (field ID 694), enter the number of months between rate adjustments, after the first adjustment.
-
In the Life Cap field (field ID 247), enter the maximum percentage (above the initial note rate) that the rate can adjust during the life of the loan.
-
The Max Life Int. Rate field (field ID 2625) displays the maximum interest rate cap for the life of the loan.
Click the Get Index button to look up the current index (based on the ARM Index Type indicated on the REGZ-TIL). The Index field (field ID 688) is updated with the most current index and is used as the basis for the rate of the loan
-
Due to a change of policy by the ICE Benchmark Administration effective September 2, 2014, all LIBOR index rates are updated one business day after the index’s effective date. LIBOR rates obtained using the Get Index button reflect the prior business day’s LIBOR rate.
The following ARM Index Types are impacted:
-
LIBOR - 1 month 1 Month London Inter-Bank Offering Rate (LIBOR)
-
LIBOR - 3 month 3 Month London Inter-Bank Offering Rate (LIBOR)
-
LIBOR - 6 month 6 Month London Inter-Bank Offering Rate (LIBOR)
-
LIBOR - 12 month 12 Month London Inter-Bank Offering Rate (LIBOR)
Potential Negative Amortization
Enter the terms for a negative amortization loan.
Enter the additional payment to be made every month to reduce the loan balance in the Extra Payment field (field ID 312).
For more information about construction loans, refer to the Process a Construction Loan topic.
Select a method for calculation of interest. Method A (also known as Half Loan or On Advance When Made Method): Interest is payable only on the amount advanced for the time it is outstanding. Assumes one half of the commitment amount is outstanding at the contract interest rate for the entire construction period. Method B (also known as Full Loan): Interest is payable on the entire amount regardless of actual dates or amounts of disbursement. Assumes the entire commitment amount is outstanding at the contract interest rate for the entire construction period.
Select a method for calculation of the repayment schedule. In each option, the first value represents the number of days per year used to calculate the loan's total interest and the second number represents the number of days per year used to calculate the daily interest. 360/360: Total interest is calculated based on the months in the loan period multiplied by 30 (partial months are not allowed) / Daily interest is calculated based on 360 days in a year. 365/360: Total Interest is calculated based on the total days in the loan period (partial months are allowed) / Daily interest is calculated based on 360 days per year. 365/365: Total Interest is calculated based on the total days in the loan period (partial months are allowed) / Daily interest is calculated based on 365 days per year.
Use the Interest Accrual Options section to configure options for simple interest and 0% interest loan options.
The 0% Payment Option is used when originating down payment assistance loans for affordable housing. This field is applied to loan calculations only when a loan’s note rate (field 3) is set to 0%. The following values can be selected from the dropdown list:
-
Amortizing Payment – This value displays by default when a loan's note rate (field 3) is set to 0%.
-
No Payment with Balloon
-
No Payment – Fully Forgiven
All three options can be used with fixed rate 0% loans. For ARM loans with an initial 0% interest, Encompass calculations support only the Amortizing Payment option, however Encompass does not prevent a user from selecting one of the No Payment options on a 0% ARM loan.
Use the remaining fields in the Interest Accrual Options section to set the interest accrual parameters used to correctly calculate payment streams, finance charges, and APR.
-
Use 366 Days in Leap Year – When selected, this field is applied to calculations only if 365/365 or 365/360 is selected for the Interest Days/Days in a Year (field ID 1962).
-
Use Simple Interest Accrual – This field is used in combination with Interest Days /Days in Year and must be selected to apply simple interest calculations to the P&I payment and payment schedule when an option with 365 days (365/365, 365/360) is used. If this checkbox is not selected, a default value of 360/360 (standard accrual method) is used for calculations regardless of the selection made for the Interest Days/Days in a Year (field ID 1962).
-
Number of Days (Biweekly, Interim Interest Classic HELOC) – Selections in this field affect interim interest collected at closing, as well as biweekly payment schedules and classic HELOC schedules that are not configured using the HELOC Management input form.
If the Use Simple Interest Accrual checkbox (field ID 4749) is selected, the selections for the Interest Days/Days in a Year dropdown list (field ID 1962) and the Use 366 Days in a Leap Year checkbox (field ID 4748) are used to determine the simple interest calculations for the payment schedule, according to the logic in the table below.
| Interest Days/ Days in a Year | Use 366 Days in Leap Year |
Description |
|---|---|---|
| 365/365 | Selected |
Every year is calculated as 365, except for leap years, which are calculated as 366. Monthly interest is calculated on the actual days in the prior month. |
| 365/365 | Cleared |
Every year is calculated as 365, including leap years. Monthly interest for each payment is calculated based on the actual days in the prior month. |
| 365/360 | Selected or cleared |
The days per year are always 360 in this method. Monthly interest for each payment is calculated based on the actual days in the prior month. |
The Use 366 Days in a Leap Year option is applied to calculations only when the Use Simple Interest Accrual checkbox has also been selected.
Click the Edit icons to calculate the mortgage insurance premium and term. For detailed instructions, refer to Calculating Mortgage Insurance Premiums and Payments.
Select the Prepaid checkbox to apply the months of PMI premiums (field 1209) to the payment stream in the Payment Schedule section. The prepaid premiums are applied at the end of the payment stream and reduce the PMI payment period by the same number of months.
Interest Rate and Payment Summary
The Interest Rate and Payment Summary table displayed on the form is determined by the purpose of the loan, its amortization type, and the term of the loan. For more information, refer to the REGZ-TIL Interest Rate and Payment Summary Tables document.
The table states the following:
-
The initial interest rate together with the corresponding monthly payment, including any estimated escrow account for taxes and property insurance and/or private mortgage insurance.
-
For adjustable-rate and buydown loans, the maximum interest rate and payment that can occur during the first five years and a “worst case” example showing the maximum rate and payment possible over the life of the loan.
-
Click the View Payment Schedule button to view the loan's Amortization Schedule.
The Payment Schedule is calculated using values from the loan terms and loan type fields. You can also enter custom values as follows.
-
Select the Customize checkbox.
-
Type values in the Number of Payments, Interest Rate, and Monthly Payment fields as needed.
-
Click Calculate Payment to recalculate the payment schedule.
-
Clear the Customize checkbox to return to the original schedule.
Select any features or conditions that apply to the loan.
-
Required Deposit - The calculated annual percentage rate does not take into account the borrower's required deposit.
-
Demand Feature - The terms of the loan allow the lender to demand immediate and accelerated repayment of the loan balance.
-
Variable Rate Feature - The loan contains a variable interest rate feature.
Indicate the type of insurance required.
If appropriate, enter information about the premium, including the amount of the annual premium.
These sections contain information related to loan conditions such as early payoff, late charges, and assumability.
-
Filing Fees are typically the government recording and transfer charges from section 1200 of the Good Faith Estimate.
-
Click the Prepayment Penalty button to enter detailed prepayment penalty information.
Enter prepayment penalty information
-
To create up to five entries for prepayment penalties, select the type of prepayment penalty (Hard or Soft).
-
Type the number of months in the prepayment period, and the percentage of the prepayment.
-
The Hard Prepayment Period and Prepayment Penalty Period fields are calculated based on previous entries.
-
In the Prepayment Penalty Fee field, enter the number of months of advanced interest that the prepay penalty cannot exceed.
-
In the Penalty Based on field, select the amount or balance on which the prepayment penalty is based.
-
When a loan is being serviced after closing, late charges established on the REGZ-TIL will be adjusted on the Interim Servicing Worksheet if the amount is below the minimum or above the maximum amount configured by your administrator for the subject property state in the Servicing setting.
-
If you are using EDM or the Encompass Docs Solution, click the Get Late Fee button to automatically populate late fees based on state and agency requirements for the subject property location. The button triggers calculations that produce generic late fees or investor-driven overrides to late fees based on investor plan IDs and custom plan IDs associated with the user’s Plan ID.
-
Features
and conditions
These sections contain information related to loan conditions such as early payoff, late charges, and assumability.
-
Filing Fees are typically the government recording and transfer charges from section 1200 of the Good Faith Estimate.
-
If you are using EDM or the Encompass Docs Solution, click the Get Late Fee button to automatically populate late fees based on state and agency requirements for the subject property location. The button triggers calculations that produce generic late fees or investor-driven overrides to late fees based on investor plan IDs and custom plan IDs associated with the user’s Plan ID.