September 19, 2016 10:32 am

By Gina Ellis

The Annual Percentage Rate Calculation Program (APRWIN) issued by the Office of the Comptroller (OCC) is an efficient tool for verifying annual percentage rates and reimbursement adjustments. The most recent version (v6.2 issued May 2008) includes applicable finance charge and APR tolerances for verifying the accuracy of annual percentage rates and finance charges on loans secured by real estate or a dwelling. The output verifies the amount financed, finance charge, total of payments and annual percentage rate. The help feature of the program explains that the software calculates the total of payments by adding the amount financed to the finance charge.

Calculating total of payments on the TRID closing disclosure will not result in the same total when compared to the total of payments disclosed in the APRWIN software because Regulation Z, 1026.38(o)(1) defines the total of payments as the total the consumer will have paid after making all payments of principal, interest, mortgage insurance, and loan costs, as scheduled. So you can see that the total of payments disclosed on the closing disclosure will generally be greater than the total of payments calculated in the APRWIN program because it may include applicable mortgage insurance and loan costs.

The Consumer Financial Protection Bureau (CFPB) recently issued a proposal for amendments to Regulation Z, specifically the sections covering TRID. The proposal would create tolerance provisions for the disclosed total of payments that parallel the existing tolerance provisions for the finance charge. While we are still dissecting the proposal ourselves, we recommend banks consider submitting comments, which are due by October 18, 2016.

As always, ABS is here to help if you have questions! Contact us at (405) 607-7000.