In regards to hybrid mortgages, where the fixed rate period of the mortgage is longer than five years, there are three different dates that may be disclosed in the “Maximum During FIRST FIVE YEARS” column of the payment table on the Truth-in-Lending Disclosure (TIL) that are acceptable to U.S. Bank:
1. The Note date;
2. The disbursement date; or
3. The date one month prior to the first payment date.
Regulation Z (12 CFR §§1026.1 et seq.) requires “the earliest date on which [the maximum interest rate] may apply” to be disclosed in this column (see Ibid. §1026.18[s][i][b]), which could arguably be any of these dates. Currently, DocuTech is using the disbursement date in the aforementioned column for fixed periods over five years, but due to some problems that may be caused with mortgages created in “dry settlement” states, where the disbursement date will change, DocuTech will be taking a more conservative approach and disclose the Note date in this column of the TIL, for loans that are planning to be sold to U.S. Bank.
These changes will take affect for ConformX U.S. Bank programs September 1, 2012. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
August 24, 2012