Presenting The T.I.L. Honestly, Ethically and Effectively

Mortgage and Lending with Logical Choice Lending, Inc.

I know many Mortgage Originators who are apprehensive at presenting the T.I.L. and with good cause.  Putting a document in front of a borrower that shows they will pay over twice what they borrowed is disheartening to say the least.  We as the mortgage professional have spent considerable time outlining the benefits of our proposed mortgage program and believe that what we have presented is the best option for the borrower.  Then here's the T.I.L. with its huge numbers and an A.P.R. that is higher then the note rate we have already disclosed.  So here is what I do and what I say:

The T.I.L. is the second form I have my borrowers sign, second only to the loan application it's self.  I do this for a few reasons; first it gets the "sticker shock" out of they way.  By showing your client the T.I.L. right out of the gate you are disclosing right from the beginning that borrowing money has costs and the T.I.L. is the disclosure that reflects the highest dollar amount of those costs.  I also present it first because the borrower is still paying attention and as they will see another T.I.L. at closing, them having a strong recollection of it prevents issues at the closing table.  Another reason I present it first is that once the larger numbers are seen by the borrower and they understand how the A.P.R. works it makes the transition to the G.F.E. smoother.

So here's what I say:

Mr. & Mrs. Homeowner, as I've said many times before, I do things very differently then most people in the mortgage business.  I believe that my job is not only to help you obtain home financing but also to make sure you are fully informed about the loan you select as well.  That means showing you the whole picture; the good, the bad and the ugly.  Well this document is the ugly.  Not only is the ugly, it is the ugliest as it is going to show you how much money you will repay over the life of this loan.

I then show them the amount they will repay including prepaids, which is the highest amount in dollars on any of the disclosures and then proceed to explain to them what prepaid finance charges are and how they affect A.P.R., this enables me to effectively transition to the G.F.E.

I have found that by doing this, the rest of the disclosure signing is much simpler and faster.

Comments (5)

Joe Adams
Major Mortgage USA/Branch Manager - Montrose, CO
I call the TIL the OH MY LORD page.........  a little laugh and explantion makes that page easier.  It does suprise me how many  borrowers never stop to thing what 360 payments at 1000 per adds up to
Jul 10, 2007 03:02 AM
Jason Leone
Logical Choice Lending, Inc. - Fort Lauderdale, FL
LOL - That's great Joe, a little levity always helps.
Jul 10, 2007 03:35 AM
Leon Austin

Jason, I wish that there were more people like you in this business. I was once chastised by a loan officer because I showed the TIL among the first documents ("What? You showed them the scariest document first?!"). I have ways of explaining the TIL that don't make it seem so "scary", so I don't see why it shouldn't be the first thing they see.  It's better than making it the last thing they see, in my opinion.


Jul 11, 2007 12:54 AM
Robert D. Ashby
Cruise Planners of South Florida - Plantation, FL
Providing Personalized Travel

I like Joe's approach.  A little humor goes a long way (if taken correctly).

I am not sure why mortgage pros are apprehensive about this document.  Yes, it shows large numbers, but it is part of our job to explain the numbers to the client and help them understand the realities associated with the loan.  I agree with you that the disclosure and "sticker shock" needs to be dealt with at the beginning.  I always "scare" people in the beginning and avoid them at the closing table.

Good post on how to present the TIL and building trust from the beginning.

Jul 11, 2007 01:47 PM
James Hoben
Barnstable, MA

Great approach. I think the directness of your suggestion helps build trusted. I haven't had any overtly negative reactions to the TIL but when I set up a file with low fees and MI the APR looks artificatly high. I also try and explain that he true cost can be manpulated and it should not be solely relied upon to evatluate a loan. Just my 2 pennies worth,

Cape Cod Mortgage

Jim Hoben

Jul 23, 2007 03:40 PM