Georgia Adds Provisions Regarding TILA-RESPA Integrated Disclosures
October 30, 2015
By Zachary Pearlstein, JD
The Georgia Department of Banking and Finance has recently added several provisions concerning the TILA-RESPA Integrated Disclosure requirements, effective November 16, 2015.
(1) The new provisions state that every mortgage lender or mortgage broker must make the following disclosures in writing to applicants for residential mortgage loans:
(a) within three business days of receipt of the application but no later than seven days before consummation of the loan, a Loan Estimate, as required by federal law, including but not limited to 12 CFR §1026.19 and 12 CFR §1026.37;
(b) no later than three business days before consummation of the loan, a Closing Agreement, as required by federal law, including but not limited to 12 CFR §1026.19 and 12 CFR §1026.38;
(c) prior to the acceptance of any fees, the amounts of all other third-party fees, including but not limited to credit report fees;
(d) prior to the acceptance of any fees, whether all or any part of any fees or charges is refundable prior to settlement of the mortgage loan, and the terms and conditions for obtaining a refund if all or any part of any fees or charges is refundable;
(e) prior to the acceptance of any fees, the specific services which will be provided or performed for the application fee; and
(f) In cases where the fees are being accepted by a mortgage lender or mortgage broker that such lender or broker cannot guarantee approval of the loan application or acceptance into a particular loan program. Further, lender or broker may not use the terms “closing” or “settlement” to refer to a transaction unless the transaction meets the definition of settlement in paragraph (3) of this rule.
(2) (a) Notwithstanding the requirements set forth in paragraph (1)(a) and (b), prior to the acceptance of any fees, mortgage lenders shall provide applicants for a home equity line of credit or a residential mortgage loan not secured by real property, such as a mobile home, the Good Faith Estimate, HUD-1 disclosures, and all other disclosures required by federal law.
(b) Notwithstanding the requirements set forth in paragraph (1)(a) and (b), prior to the acceptance of any fees, mortgage brokers and mortgage lenders shall provide applicants for residential mortgage loans related to reverse mortgages the Good Faith Estimate and HUD-1 disclosures, as well as all other disclosures required by federal law, including but not limited to 12 CFR §1026.33.
(3) Definitions. (a) For purposes of this Rule, the term “settlement” or “closing” means the process of executing legally binding documents regarding a lien on residential property and the disbursement of funds necessary to effect the transaction. Where a federally required right of rescission applies to a transaction, the settlement or closing date will be the date the binding documents are signed, not the disbursement date.
(b) For purposes of this Rule, the term “consummation” means the point at which the borrower becomes contractually obligated to the creditor on the residential mortgage loan, which may not necessarily be the same as the date of settlement or closing.
(c) For purposes of paragraph (1) of this Rule, “application fee” means any fee advanced prior to settlement by the applicant to the mortgage broker or mortgage lender in connection with an application for a mortgage loan, including any charge for soliciting, processing, placing or negotiating a mortgage loan. The term does not include payments to be remitted to third party service providers, such as appraisal fees or fees for credit reports.
(4) Some or all of the disclosures required by paragraph (1), (2), (6), (7), and (8) of this Rule may appear on forms used to comply with otherwise applicable state or federal laws, including but not limited to 12 CFR §1026.37 and 12 CFR §1026.38.
(5) The disclosures required in paragraphs (1), (2), and (8) of this Rule shall be acknowledged in writing by the applicant and a copy of the acknowledgment maintained by the mortgage lender or mortgage broker required to make the disclosure, and a copy of the acknowledgment shall be given to the applicant. In instances of applications taken by mail, the disclosures required by paragraphs (1), (2), and (8) must be included in the mail application package with a request that a signed acknowledgment form be returned to the mortgage broker or lender required to make the disclosure. A copy of this request shall be kept by the mortgage broker or mortgage lender. In instances of applications taken by telephone, the disclosures required by paragraphs (1), (2), and (8) must be mailed or delivered to the applicant with a request that a signed acknowledgment form be returned to the mortgage broker or lender required to make the disclosure. A copy of this request shall be kept by the mortgage broker or mortgage lender.
(6) In a residential mortgage loan for which an escrow account was established in connection with the transaction and will be cancelled, the mortgage lender shall provide the borrower an Escrow Closing Notice no later than three business days before the borrower’s escrow account is cancelled, as required by federal law, which includes but is not limited to 12 CFR §1026.20.
(7) In the event that the residential mortgage loan is transferred, the transferee mortgage lender shall provide the borrower with a Mortgage Transfer Disclosure on or before the thirtieth calendar day following the date of the transfer, as required by federal law, which includes but is not limited to 12 CFR §1026.39.
(8) Foreclosure Disclosure. (a) Every mortgage lender, and every mortgage broker who closes mortgage loans in the broker’s own name with funds provided by others and which loans are assigned within 24 hours of the funding of the loan to the mortgage lender providing the funding of such loans (i.e. table funding), required to be licensed or registered under Article 13 shall disclose in writing to each applicant for a mortgage loan that failure to meet every condition of the mortgage loan may result in the loss of the applicant’s property through foreclosure. The disclosure shall be made at or before the time of settlement. The disclosure shall include the following language in at least ten-point bold-faced type:
“O.C.G.A. § 7-1-1014(3) requires that we inform you that if you fail to meet any condition or term of the documents that you sign in connection with obtaining a mortgage loan you may lose the property that serves as collateral for the mortgage loan through foreclosure.”
(b) The applicant shall be required to sign the disclosure and the lender or broker, as applicable, shall keep a copy of the signed disclosure.
(c) This disclosure requirement may be satisfied by complying with a substantially similar disclosure as required by federal law.
About the Author
Zach is a Regulatory Compliance Consultant with Bankers Advisory. He is a graduate of Brandeis University and earned his Juris Doctor at Suffolk Law School. He can be reached at Zachary@bankersadvisory.com
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
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