Qualitative Testing of Integrated Mortgage Loan Disclosure Forms

Settlement Disclosure
Settlement information
Date
12/13/2011
Agent
Martha Jones
Location
ABC Settlement

54321 Random Blvd, Ste 405

Somecity, AL 54321
Property
1234 Anywhere Street
Somecity, AL 54321

This form is a statement of final loan terms and actual closing costs.

transaction information
Borrower
James White and Jane Johnson

456 Avenue Anywhere

Anytown, AL 12345
Seller
John Wilson

123 Somewhere Dr.

Anytown, AL 12345
Sale Price
$120,000

Loan Terms

Can this amount increase after closing?

Loan Amount

$108,000

NO

Interest Rate

4.125%

NO

Monthly Principal & Interest

$523.42

NO

See Projected Payments Below
for Your Total Monthly Payment

loan information
Lender
Sassafras Bank

9876 Random Blvd, Ste 504

Somecity, AL 54321
FHA
Loan Type x Conventional
VA
_____________
Loan Term 30 years
Purpose
Purchase
product
Fixed Rate
File #
01234
Loan ID #
1330172608
MIC #
56789

Does the loan have these features?
Prepayment Penalty

NO

Balloon Payment

NO

Projected Payments
Payment Calculation
Principal & Interest

Years 1-7
$523.42

Mortgage Insurance

+ 54.90

Estimated Taxes & Insurance

+ 246.68

Amount Can Increase Over Time

Estimated Total
Monthly Payment
Information about Escrow
for Taxes & Insurance
See Details on Page 4

$825.00
$246.68 a month

Years 8-30
$523.42
—
+ 246.68

$770.10

x E scrow. Your monthly payment includes the items listed in
Section F on page 2. You must pay other items separately.
No escrow. You must pay your taxes and insurance separately
from your loan payments.

Closing Costs
Cash to Close

SETTLEMENT DISCLOSURE

$16,331.79 
Closing Costs include $4,280.00 in Settlement Fees.
See details on page 2.

PAGE 1 OF 5

Paid at Closing
by Borrower

Settlement Fees
RE. Real Estate Broker Fees
$3,000.00 to Reliable Realty Co./ $3,000.00 to Realty Pros LLC
A. Origination Charges
1 Point(s)
Underwriting Fee
Application Fee
Processing Fee

Paid at Closing
by Seller

Other Payments by
Borrower | Other

$6,000.00
$2,005.00
$1,080.00
$425.00
$200.00
$300.00

B. Services Borrower Did Not Shop For
$1,970.00
Credit Report Fee
to Creditco
Tax Status Research Fee
to Collateral Research Inc.
Flood Determination Fee
to Collateral Research Inc.
Tax Monitoring Fee
to Monitoring Services Inc.
Flood Monitoring Fee
to Monitoring Services Inc.
Appraisal Fee
to Local Appraisal Co.
Document Preparation Fee
to Collateral Research Inc.
Settlement Agent Fee
to ABC Settlement Co.
Title – Examination
to Regional Title Co.
Title – Commitment Letter
to Regional Title Co.
Title – Courier Fees
to Speedy Delivery Corp.
Title – Lender’s Policy
to First Patriotic Title & Guar. Co. $108,000
Title – Owner’s Policy
to First Patriotic Title & Guar. Co. $120,000
C. Services Borrower Did Shop For
Survey Fee
to Surveyors Inc.
Pest Inspection Fee
to Home Pest Co.
Structural Inspection Fee
to Home Engineering Corp.

Financed in
Loan Amount

$9.00
$40.00
$35.00
$15.00
$10.00
$354.00
$55.00
$250.00
$290.00
$100.00
$32.00
$320.00
$460.00

$305.00
$105.00
$200.00
$275.00

Calculation
RE + A + B + C
Lender Credits
Subtotals of Settlement Fees
Total Settlement Fees paid by borrower

$3,717.00
$3,717.00

$6,275.00

$563.00

$6,275.00

$563.00

$4,280.00

Settlement Costs
D. Taxes and Other Government Fees
$207.00
Recording Fees
Deed: $12.00
Mortgage: $45.00
City/County Tax/Stamps
Deed:
Mortgage:
State Tax/Stamps
Deed: Mortgage:
Transfer Taxes
Mortgage Tax
Deed: $12.00
Mortgage: $162.00
E. Prepaids
Mortgage Insurance Premium ( __mo.)
Homeowner’s Insurance Premium ( 12 mo.) to XYZ Ins. Co.
Property Taxes ( current period )
Windstorm Insurance Premium ( 12 mo.) to Wind Safe Co.
Prepaid Interest $12.38 per day from 12/13 to 12/31
F. Initial Escrow Payment at Closing
Mortgage Insurance
per month for mo.
Homeowner’s Insurance
$75.33 per month for 3 mo.
County Property Taxes
$52.18 per month for 3 mo.
Windstorm Insurance
$119.17 per month for 3 mo.
HOA/Condo/Co-op
per month for mo.

$45.00

$12.00

$162.00

$12.00

$2,794.36
$904.00
$237.61
$1,430.00
$222.75
$740.04
$225.99
$156.54
$357.51

Calculation
Subtotals of Settlement Costs (D + E + F)
Total Settlement Costs paid by borrower

$3,741.40

Calculating Closing Costs
G. Subtotals of Closing Costs (Settlement Fees + Settlement Costs)
H. Total Closing Costs paid by borrower

$7,458.40

SETTLEMENT DISCLOSURE

$24.00
$3,741.40

$6,299.00

$563.00

$8,021.40
PAGE 2 OF 5

Calculating Borrower’s Cash to Close
Total Closing Costs Paid by Borrower (H)

Limits on Increases
$8,021.40

Down Payment/Funds from Borrower

$12,000.00

Deposit

– $3,000.00

Cash to Borrower

– $0

Seller Credits

– $0

Other Credits and Adjustments
Closing Costs Financed in Loan Amount (G)
Other Payments by Borrower (G)

Cash to Close x From

To Borrower

– $126.61
– $0

Loan
Estimate

Final

Over Limit?

A. Origination Charges

$2,005.00

$2,005.00

NO

$162.00

$162.00

NO

D. Transfer Taxes
Costs That Could Not Increase
by More Than 10% in Total

Loan
Estimate

Final

B. Services You Did Not Shop For

$1,820.00

$1,970.00

$45.00

$45.00

$1,865.00

$2,015.00

D. Recording Fees

– $563.00

Total

K. Due to Seller at Closing
$7,458.40

Sale Price of Property
Sale Price of any Personal Property Included in Sale

$120,000.00

$120,000.00

Items Prepaid by Seller that are Due from Borrower
City/town taxes
to
County taxes
to
Assessments to

Items Prepaid by Seller that are Due from Borrower
City/town taxes
to
County taxes
to
Assessments to

Total $127,458.40

Total

J. Paid Already or on Behalf of Borrower at Closing

L. Due from Seller at Closing

Deposit $3,000.00
Principal Amount of Borrower’s New Loan
$108,000.00
Existing loan(s) assumed or taken subject to

Excess Deposit
Closing Costs Paid at Closing by Seller (G)
Existing loan(s) assumed or taken subject to
Payoff of first mortgage loan
Payoff of second mortgage loan

Unpaid Items that are Due from Seller
City/town taxes
to
County taxes 10/1/11 to 12/13/11
Assessments to

Unpaid Items that are Due from Seller
City/town taxes
to
County taxes 10/1/11 to 12/13/11
Assessments to

$126.61

$120,000.00

Total $111,126.61

Total

Calculation

Calculation

Total Due from Borrower at Closing (I)
$127,458.40
Total Paid Already or on Behalf of Borrower at Closing (J) – $111,126.61

Total Due to Seller at Closing (K)
Total Due from Seller at Closing (L)

Cash to Close x From

Cash

SETTLEMENT DISCLOSURE

NO

Summary of Seller’s Transaction

I. Due from Borrower at Closing

To Borrower

Over Limit?

$16,331.79

Summary of Borrower’s Transaction
Closing Costs Paid at Closing by Borrower (G)
Closing Costs Financed in Loan Amount (G)
Sale Price of Property
Sale Price of any Personal Property Included in Sale

Costs That Could Not Increase

$16,331.79

$6,299.00

$126.61

$6,425.61

From x To Seller

$120,000.00
– $6,425.61

$113,574.39
PAGE 3 OF 5

Loan Disclosures
Assumption
If you sell or transfer your home to another person:
We will allow, under certain conditions, this person to assume
this loan on the original terms.
x We will not allow assumption of this loan.
Demand Feature
Your loan has a demand feature, which permits the lender to
demand early repayment of the loan. If this loan has a demand
feature, you should review your note for details.
x Your loan does not have a demand feature.
Late Payment
If your payment is more than 15 days late, we will charge a late fee
of 5% of the monthly principal and interest payment.
Negative Amortization (Increase in Loan Amount)
Under your loan terms, you
are scheduled to make monthly payments that do not pay all of
the interest due that month. As a result, your loan amount will
increase (negatively amortize), and your loan amount will likely
become larger than your original loan amount. Increases in your
loan amount lower the equity you have in your home.
have the option of making monthly payments that do not pay all
of the interest due that month. If you do, your loan amount will
increase (negatively amortize), and, as a result, your loan amount
may become larger than your original loan amount. Increases in
your loan amount lower the equity you have in your home.
x do not have a negative amortization feature.
Partial Payment Policy
We will accept payments that are less than the full amount due
(partial payments). We will apply partial payments:

x We will not accept partial payments.

Escrow Account Information
For now, your loan
x will have an escrow account (also called an “impound” or “trust”
account) to pay your home-related costs, such as property taxes
and homeowner’s insurance. We estimate that these costs will total
$2,960.16 for the first year of your loan. Without an escrow account,
you would directly pay these potentially large costs in semi-annual
or annual payments. At closing, you will make an initial deposit
of $740.04 into your escrow account. After that, your regular
mortgage payments will include an additional $246.68 that
will go into your escrow account. We will take money from your
account to pay these home-related costs as needed. If we fail to
make payments, we may be liable for penalties and interest.
 ill not have an escrow account. You do not have an escrow
w
account because ___ you declined an account ___ we do not
offer escrow accounts. The fee for not having an escrow account
is $______. In addition to your mortgage loan payment, you
must directly pay your home-related costs, such as property
taxes and homeowner’s insurance. We estimate that these costs
will total $______ for the first year of your loan. You must pay
these costs in potentially large semiannual or annual payments.
If you would like an escrow account, you may contact us at
______________ by _________.
In the future,
If you have an escrow account, or if one is added later, the amount
of your escrow payment may change. In addition, you may be
permitted to cancel your escrow account, but if you do so, you will be
responsible for directly paying these home-related costs unless you
create a new escrow account.
If your property taxes are not paid, your state or local government
may (1) impose fines and penalties or (2) place a tax lien on your
home. In addition, if you fail to pay any of your home-related costs,
we may
• add the amounts to your loan balance,
• add an escrow account to your loan, or
• r equire you to pay for insurance on your home that we buy on your
behalf, which likely would be more expensive and provide fewer
benefits than what you could obtain on your own.

Security Interest
You are granting us a security interest in 1234 Anywhere St., Somecity,
AL 54321. You may lose your home if you do not make your payments
or satisfy other obligations for this loan.

SETTLEMENT DISCLOSURE

PAGE 4 OF 5

Loan Calculations
Total of Payments. The amount you have paid after
you have made all 360 payments as scheduled.
Finance Charge. The dollar amount the credit will
cost you.
Amount Financed. The amount of credit provided
to you or on your behalf.

Other Disclosures
$281,792.70
$87,535.65
$105,452.25

4.65%

Total Interest Percentage (TIP). This rate is the total
amount of interest that you will pay over the loan
term as a percentage of your loan amount.

74.47%
1.35%

Originator Information
Name

Friendly Mortgage Broker, Inc.

Phone

555-123-4444

Email [email protected]

Originator Fees Summary
Paid by Borrower(s)
Paid by Lender

555-123-4444
Contract Details
See your note and security instrument for information about
• what happens if you fail to make your payments,
• other ways you can default on the loan,
• situations in which we can require early repayment of the loan, and
• the rules for making payments before they are due.
Liability after Foreclosure
If your lender forecloses on your home and the foreclosure does not
cover the amount of unpaid balance on this loan:
state law may protect you from personal liability for the unpaid
balance. If you refinance or take on any additional debt on your
home, you may lose this protection and be personally liable for
debt remaining after the foreclosure. You may want to consult an
attorney for more information.
x state law does not protect you from personal liability for the
unpaid balance.
Refinance
You may not be able to refinance your loan to lower your interest
rate and payments in the future with us or with another lender.

NMLS ID 767698

Total Fees Paid to Originator

Joe Smith
Sassafras Bank

Annual Percentage Rate (APR). This is not your
interest rate. This rate expresses your costs over the
loan term.

Lender Cost of Funds (LCF). The cost of the funds
used to make this loan. This is not a direct cost to you.

Appraisal Copy
If you paid for a written appraisal or valuation of the property, we
are required to give you a copy at no additional cost at least 3 days
before closing. If you have not yet received it, please contact:

$2,160.00
—

Tax Deductions
If you borrow more than your home is worth, the interest on the loan
amount above the home’s fair market value is not deductible from
your federal income taxes. You should consult a tax advisor for more
information.

$2,160.00

Questions
If you have questions about the loan terms and costs on this form, contact your lender. To get more information or make a complaint, contact
the Consumer Financial Protection Bureau at www.consumerfinance.gov.

Confirm Receipt
By signing, you are only confirming that you have received this form. You don’t have to complete this transaction if you have signed or received
this form.
Applicant Signature/Date
Co-Applicant Signature/Date

SETTLEMENT DISCLOSURE

PAGE 5 OF 5