General Disclosures

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I just got a big envelope in the mail from SBCL. What is it?
These are disclosures. We are required by law to mail disclosures within three business days of receipt of a loan application or purchase and sale agreement (unless the application is withdrawn during that time). The forms vary depending on the type of loan for which you are applying. Please review, sign, and return.
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I just got a package/email from the lender providing my loan. What do I do?
These are lender disclosures. Every lender addresses disclosures differently, so the forms you receive and the manner in which you receive them will vary based on your lender.
If you've received a package by mail, you can save or shred it. No action is required. If you've received an email from the lender, just open it and reply as directed.
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I already signed a bunch of disclosures. Why am I getting more?
When important changes are made to a loan, such as the rate, fees, or term, we are required to send forms disclosing the details of these updates.
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Uniform Residential Loan Application

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What is the Uniform Residential Loan Application?
This is a standardized residential mortgage loan application used by lenders to collect a borrower’s financial information. It is also referred to as Form 1003.
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I found some errors on the application. What do I do?
Please handwrite in the correct information. You'll sign a final version of this form at closing so it’s okay to mark this one up.
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What work phone number should I use?
Ideally, the phone number you provide will go directly to someone who can verify your employment. The lender will call several times to confirm that you are still employed and that the start date you listed is accurate.
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I split my rent with roommates. Should I list my portion of the rent or the total amount?
For simplicity’s sake, list the full amount and let your loan officer know if you are only responsible for a portion.
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I don’t want to liquidate all my savings for this purchase. Why are they listed?
The more assets you have, the stronger your application and the more confident the lender. Confident lenders tend to be more generous lenders, and we like that.
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My investment accounts are much higher than what is listed. Why?
Lenders are well aware that limits and tax restrictions often constrain the liquidity of retirement funds. For that reason, we can only count 60% of the face value of certain investments.
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The credit card balances listed are old. Should I update them?
These figures are automatically posted from your credit report, which always lists figures that are one or two months old. In most cases, it doesn’t matter and you can leave it as is. If something looks way off, tell your loan officer.
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I receive higher rent on my investment property than what is listed. Why?
We can only use 75% of the rent received to account for a 25% vacancy factor.
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What are the Details of Transaction?
This is a generalized summary of funds within the transaction. It may include figures that are paid for by the seller so it is helpful to review exact numbers and clarify your responsibility with your loan officer.
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A box is incorrectly checked in the Declarations section. What should I do?
Mark the loan application correctly and notify your loan officer immediately.
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What’s all the fine print in section IX?
The first paragraph is basically an 11-part acknowledgment of your character and intentions: that you did not lie, will pay your mortgage, won’t run drugs out of the house, etc. The second paragraph is an information release that allows us to gather confidential information from employers and banks. The third paragraph says you have a right to receive a copy of the appraisal.
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Why do I need to identify my race/ethnicity? Do I get a benefit for being a minority?
Lenders are not allowed to discriminate based on demographics. This information is entered into a database to monitor patterns of loan approvals and crack down on discrimination. Your answer does not affect your loan. If you check “I do not wish to furnish this information,” your loan officer is required to guess.
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Good Faith Estimate (GFE)

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What is the Good Faith Estimate?

This isn't the same form I've seen in previous transactions. Why?
The Good Faith Estimate provides a summary of all the fees associated with your loan, regardless of whether or not you are required to pay them. The form underwent major revision in 2010 to bring uniformity to the industry.
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Why is the number in Box 1 so large?
This figure, the Origination Charge, is misleading because it combines our fees (mortgage broker and processing fees) with the lender’s underwriting fees. If you are doing a “no-cost loan,” you will see a total here that will essentially be cancelled out by the credit you are receiving from the lender (outlined in Box 2).
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What is Box 2?
This is the amount the lender is either crediting (yield spread premium or rebate) or charging (discount points) you that will be applied to your closing costs. If your rate is not yet locked yet, this number will change once it is locked.
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What is Box A?
The Adjusted Originate Charge is the total of the origination charge from Box 1 either less the credit or plus the charge being issued by the lender (as outlined in Box 2).
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What is Box 3?

Why is my appraisal listed when I’ve already paid for it?
Box 3 outlines the fees for services required by the lender. It includes appraisal, flood certificate, credit report, and tax service fees. Although you will pay for your appraisal several weeks before the loan closes, it is listed here for consistency’s sake. Don’t worry, you won’t be charged twice.
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What is Box 4?
This figure is a combination of the lender title insurance and escrow company fee.
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What is Box 5?
This is the owner’s title insurance, which is based on the purchase price. This fee is never paid by the buyer in WA state but is required by law to be listed on the Good Faith Estimate. On the final paperwork, it will be listed as a charge that is credited back to you from the seller.
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Truth In Lending

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What is Truth in Lending?
Truth in Lending breaks down the big-picture costs over the term of the loan. You may receive several of these throughout the loan process if the loan amount or your rate changes.
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Why is the APR higher than my interest rate?
The disclosed APR is often higher than the interest rate because of loan discount points and other prepaid finance charges that may be added. The purpose of the APR is to give borrowers a consistent means of comparing rates and loan programs. In short, don’t worry. The APR is not the same as your true interest rate.
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What is the Finance Charge?
The Finance Charge is the total amount of interest paid over the life of the loan plus the fees that contribute to the APR.
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Why is the amount financed less than my loan amount?
The amount financed is the loan amount less any fees that contribute to the APR.
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What is the Total Payments figure?
Total Payments represents the total you will pay if you make the minimum monthly payment for the life of the loan. Making an additional payment toward principal can lower this number considerably because you will pay less interest.
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Rate Lock

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My rate is locked but it says it’s not guaranteed by SBCL. Why?
The lender guarantees the lock, not SBCL. If you have received this disclosure asking you to acknowledge that your rate is locked, then it is locked.
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Disclosure Summary

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What are the fees listed on the Disclosure Summary?
These are the fees being paid to SBCL. If you are receiving a credit from the lender (e.g., yield spread premium or YSP), it will be applied toward these fees. All of these figures have already been accounted for in the Good Faith Estimate.
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Mortgage Broker Fee Disclosure (MBFD)

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What are the fees listed on the Mortgage Broker Fee Disclosure?
The first total is a combination of the mortgage broker fee, the processing fee, and the lender credit (yield spread premium or YSP). The next line indicates that the YSP is being applied to closing costs. The “total your Mortgage Broker will be paid” is the total of the broker fee and processing fee. The YSP is credited to all your closing costs and may pay for part or all of the mortgage broker fee and processing fee. If the YSP is greater than the brokerage charges, the remaining rebate will go to other closing costs. These are not new fees. They are all accounted for in the Good Faith Estimate. The MBFD may vary from lender to lender.
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Privacy Disclosure

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What is the Privacy Disclosure?
The Privacy Disclosure states that we keep all of your information safe and confidential and only share information as required to process the loan or in the event of a legal action. Much of the information regarding the transaction becomes public record so you’ll likely get junk mail no matter what.
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Form 4506T

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What is Form 4506T?
Form 4506T is used by lenders to verify that the income listed on the loan application matches IRS tax records. Please verify that your name and address are the same as listed on your tax return.
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Appraisal Form

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What is the Appraisal Form?
The Appraisal Form addresses two key points:
1. The appraisal is non-refundable even if your transaction does not close.
2. By law, you should have a copy of the appraisal at least three business days before signing closing documents. If you “choose to waive,” you can sign your loan docs as soon as they are ready. If you “choose not to waive,” there may be delays in closing your loan. You will receive a copy of the appraisal no matter what, so we encourage the “choose to waive” option to prevent delays that could result in lock extension fees.
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SS Number Verification: SSA-89

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What is the SSA-89?
The SSA-89 is a fraud-screening measure used to verify that the social security number used to apply for the mortgage matches Social Security Administration records.
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Social Security Number Certification

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What should I write in the blank?
Write in whatever document you provided to verify your social security number. If you provided a W-2, write “W-2.” If you provided a pay stub, write “pay stub.”
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Alternative Document Checklist

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What is the Alternative Document Checklist?
This is where you indicate the documents you provided to verify your income and assets. Examples include pay stubs, W-2s, and bank statements.
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Which boxes should I check?
Please put a check next to the documents that you have provided to SBCL. You will most likely check all three.
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FHA Amendatory Clause

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What is the FHA Amendatory Clause?
The FHA Amendatory Clause is a required document stating that you (the buyer) and the seller agree on the sales price and that the appraisal is to determine the loan rather than purchase amount. By signing the Real Estate Certification, you are certifying that you are involved in a sales transaction and that all terms of the transaction are true. Sign the top two lines of each section and return the form to us with the rest of your disclosures. We will collect all other signatures.
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FHA Identity of Interest

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What is the FHA Identity of Interest?
An Identity of Interest is also known as a Non-Arm’s Length Transaction. Lenders use it to determine if the buyer and seller are related or business partners. If you indicate “yes,” many more guidelines and restrictions apply. If this situation applies to you, call your loan officer immediately to discuss. Otherwise, check “no.”
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Informed Consumer Choice

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What is Informed Consumer Choice?
This form compares FHA financing with conventional financing. It shows how a $100,000 loan looks with a 3.5% (FHA minimum) vs. 5% (conventional minimum) down payment. It is for information purposes only and has no bearing on your actual loan.
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Have more questions about disclosures? Call us at (206) 789-8629.