Reg Z – How should the Projected Payments - Estimated Taxes, Insurance & Assessments section be completed on the Loan Estimate?

Compliance > Regulation Z - TILA / TRID Specific > Loan Estimates
Q:  How should the Projected Payments - Estimated Taxes, Insurance & Assessments section be completed on the Loan Estimate?
 
A:  Regulation Z has technical requirements for the completion of the Projected Payments - Estimated Taxes, Insurance & Assessments section.  While creditors should review regulatory conditions and commentary, a general description of the requirement is as follows: 
 
The Projected Payments section is provided to disclose an itemization of each separate periodic payment or range of payments, followed by information on estimated taxes, insurance and assessments.    With regard to the Estimated Taxes, Insurance & Assessments section, creditors must disclose the total monthly amount due for:
 
  • Property Taxes
  • Homeowner’s Insuranceany insurance against loss or damage or against liability arising out of the property.  As the CFPB clarified in the webinar referenced below, this could include escrow for flood insurance
  • Other – other charges may include, for example, charges imposed by a condo or homeowners association
By using check boxes on the form, the creditor will indicate what the estimate includes.  If the “Other” box is used, the creditor must include a description.  If the “Other” amount represents more than one other amount, the creditor may disclose a descriptive statement of one such amount and include the phrase “and additional costs.”  After utilizing the check boxes, the creditor will indicate whether or not the particular items are “in escrow?”
 
Here are two sample excerpts from Reg. Z, Appendix H:
 
H-24(B) Mortgage Loan Transaction Loan Estimate—Fixed Rate Loan Sample (Excerpt)
 
H-24(C) Mortgage Loan Transaction Loan Estimate—Interest Only Adjustable Rate Loan Sample (Excerpt)
 
 
ADDITIONAL INFORMATION – The regulatory citation for this topic is 12 CFR 1026.37(c). 
This disclosure is also addressed in the CFPB's “Guide to the Loan Estimate and Closing Disclosure forms,” which may be found here - http://www.consumerfinance.gov/regulatory-implementation/tila-respa/
This was also discussed in the CFPB's October 1, 2014 webinar - Completing the Loan Estimate, which may be found here - http://www.consumerfinance.gov/regulatory-implementation/tila-respa/
 

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