F O R E N S I C L OA N AU D I T W I T H M O RT G AG E C O M P L I A N C E A N A LY S I S R E P O RT

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1 L O A N S A F E S O L U T I O N S W W W. L O A N S A F E. O R G F O R E N S I C L OA N AU D I T W I T H M O RT G AG E C O M P L I A N C E A N A LY S I S R E P O RT P R E PA R E D F O R DA N I E L F I N L AY EMMELINE DR RIVERTON, UT C O R O N A P O I N T E C O U R T S U I T E C O R O N A, C A

2 TABLE OF CONTENTS OVERVIEW AND BORROWER S COMPLAINT 3 DETAILS OF TRANSACTION 4 MORTGAGE COMPLIANCE AUDIT REPORT 6 ADDITIONAL FINDINGS 17 NARRATIVE 18 RIGHT TO CANCEL NOTICES & MATERIAL DISCLOSURES 19 TRUTH IN LENDING and RESPA INFORMATION 21 AMORTIZATION SCHEDULE 24 YIELD-SPREAD PREMIUM (YSP) 31 GOOD FAITH ESTIMATE (GFE) 32 OPINION 33 2

3 OVERVIEW TILA Violations are found APR is under disclosed by 3.18% Finance Charge is under disclosed by 401, No Evidence of Signed Initial Disclosures in file exist. Loan auditor s notes for attorney: This is a refinance of a primary residence. Loan amount is for 472, Client believes the broker lied to them about their payment schedule. Broker admitted fault but never rewrote loan. 3

4 DETAILS OF TRANSACTION BORROWERS: DANIEL FINLAY. (PRIMARY CONTACT) HOME ADDRESS EMMELINE DR RIVERTON, UT CONTACT INFORMATION: (801) NOTES: SUBJECT PROPERTY ADDRESS: THIS AUDIT IS FOR THE: EMMELINE DR XX PRIMARY RESIDENCE RIVERTON, UT SECOND HOME INVESTMENT PROPERTY A.P.N THIS AUDIT IS FOR THE: FIRST MORTGAGE 472, SECOND MORTGAGE THIRD MORTGAGE No No 4

5 OTHER PARTIES TO TRANSACTION MORTGAGE BROKER FUNDING LENDER USA LENDING GROUP AMERICAN BROKERS HM ACCEPT S JORDON GATEWAY # S JORDON GATEWAY BLVD SALT LAKE CITY, UT SALT LAKE CITY, UT CURRENTLY SERVICING LOAN CURRENT LENDER AMERICAN HOME MORTGAGE TITLE COMPANY ESCROW COMPANY FIRST AMERICAN TITLE FIRST AMERICAN TITLE 9103 S 1300 WEST S 1300 WEST 100 WEST JORDON, UT WEST JORDON, UT APPRAISAL NOT SPECIFIED NOTARY NOT SPECIFIED 5

6 MORTGAGE COMPLIANCE MORTGAGE COMPLIANCE ANALYSIS REPORT CE ID: 28B01WBO5M Client Name: Loan Safe Solutions User Name: Lindsey fox Lender Loan Number: Product Name: ComplianceAnalyzer Report Type: Post-Close Mortgage Loan Borrower Name: Daniel Finlay Report Date / Time: 09/23/ :46PM (PDT) Property Address: Emmeline Dr Report Version: 1 Riverton, UT State HOEPA TILA RESPA RiskIndicator MODERATE & Local Predatory FINDINGS SUMMARY State Investor / Exceptions Regs Custom FEDERAL HOEPA (SECTION 32) Result Loan Comparison Variance HOEPA High Cost Mortgage: NO HOEPA Rate-based Test: PASS 9.924% % % HOEPA Points and Fees Test: PASS 3, , , HOEPA Timing of Disclosure Test: HOEPA Balloon Payment Test: HOEPA Prepayment Penalties Test: FEDERAL TILA Result Loan Comparison Variance TILA Finance Charge Test: FAIL 687, ,089, , TILA Rescission Finance Charge Test: FAIL 687, ,089, , TILA Foreclosure Rescission Finance Charge Test: NOT TESTED TILA APR Test: FAIL 6.744% 9.924% % TILA Right of Rescission Test: FAIL TILA Disclosure Date Test: FEDERAL RESPA RESPA GFE Disclosure Date Test: Result NOT TESTED Loan Comparison Variance FHA This loan is not covered by FHA. Result NOT Loan Comparison Variance 6

7 COVERED CT NONPRIME HOME LOAN INVESTOR CRITERIA This loan is not covered by CT Nonprime Home Loan Investor Criteria. Result NOT COVERED Loan Comparison Variance ME RATE SPREAD HOME LOAN INVESTOR CRITERIA This loan is not covered by ME Rate Spread Home Loan Investor Criteria. Result NOT COVERED Loan Comparison Variance NY SUBPRIME HOME LOAN INVESTOR CRITERIA This loan is not covered by NY Subprime Home Loan Investor Criteria. Result NOT COVERED Loan Comparison Variance UT HIGH COST HOME LOAN ACT (UT HB 160) Result Loan Comparison Variance UT HCHLA High-Cost Mortgage APR Threshold Test: PASS 9.924% % % UT HCHLA High-Cost Mortgage Points and Fees Threshold 3, , PASS Test: 33, High-Cost Mortgage: NO UT HCHLA High-Cost Mortgage Prepayment Term Test: UT HCHLA High-Cost Mortgage Additional State Law Prepayment Penalty Test: UT HCHLA High-Cost Mortgage Potential Negative Amortization Test: UT HCHLA High-Cost Mortgage Interest Only Test: UT HCHLA High-Cost Mortgage Balloon Payment Test: UT HCHLA High-Cost Mortgage Credit Insurance and Debt Cancellation Fees Test: UT HCHLA Legislative Summary Alert: ALERT STATE REGULATIONS Tests pertaining to State Regulations were not performed. Result NOT PERFORMED Loan Comparison Variance STATE REGULATIONS RESTRICTED FEES Tests pertaining to State Regulations Restricted Fees were not performed. Result NOT PERFORMED Loan Comparison Variance INDEX Name Term Yield Date 7

8 Treasury Security 20 Year 4.560% 05/13/2005 TIL SUMMARY Annual Percentage Rate Finance Charge Amount Financed 9.924% Interest Rate 2.000% PAYMENT SCHEDULE Total of Payments 1,089, , ,557, Number of Payments Amount of Payments , , , Amortization Schedule FINDINGS DETAIL FEDERAL HOEPA (SECTION 32) Section 32 (High Cost) Mortgage (12 CFR (a)(1)(i) and (ii)) [Amd. 2001] / [Original] The loan is not a Section 32 (High Cost) mortgage because it has terms that do not exceed either the HOEPA rate-based threshold or the HOEPA points and fees based threshold. This loan has terms that do not exceed the rate-based threshold. (12 CFR (a)(1)(i)) [Amd. 2001] / [Original] The annual percentage rate (APR) at consummation is 9.924%, which does not exceed the yield of 4.560%, as of May 13, 2005 on 20 year Treasury securities (the Treasury securities having comparable periods of maturity), plus percentage points. The yield is as of the fifteenth day of the month immediately preceding the month of the application for extension of credit, which was received by the creditor on June 9, This loan has terms that do not exceed the points and fees based threshold. (12 CFR (a)(1)(ii)) [Amd. 2001] / [Original] The total points and fees payable by the consumer at or before loan closing is 3,692.50, which does not exceed the greater of 8 percent of the "total loan amount" (as defined in the official commentary to paragraph 32(a)(1)(ii)), or The timing of disclosure test is not applicable to this loan due to one or more of the following findings: (12 CFR (c)) Pre-close audits do not pertain to the consummation of a loan. The loan is not a high cost loan. The balloon payment test is not applicable to this loan. (12 CFR (a)) The loan is not a high cost loan. The prepayment penalties test is not applicable to this loan due to one or more of the following findings: (12 CFR (a)) The loan is not a high cost loan. There is no prepayment term specified in the terms of the loan. NO PASS PASS FEDERAL TILA This loan failed the TILA finance charge test. (12 CFR (d)(1)) The finance charge is 1,089, The disclosed finance charge of 687, is not considered accurate because it is understated by more than 100. FAIL 8

9 This loan failed the TILA rescission finance charge test. (12 CFR (g)(1)) The finance charge is 1,089, The disclosed finance charge of 687, is not considered accurate for purposes of rescission because it is understated by more than 1/2 of 1 percent of the face amount of the note or 100, whichever is greater. This loan was not tested against the TILA foreclosure rescission finance charge test due to one or more of the following findings: (12 CFR (h)) A disclosed finance charge was not provided; or Your company settings are not configured to run the TILA foreclosure rescission finance charge test as part of an audit report. This loan failed the TILA APR test. (12 CFR (a)(2),(4)) The annual percentage rate (APR) is 9.924%. The disclosed APR of 6.744% is not considered accurate because it is more than 1/8 of 1 percentage point above or below the APR as determined in accordance with the actuarial method. This loan failed the TILA right of rescission test. Closed-end (12 CFR (a)(3)), Open-end (12 CFR (a)(3)) The funding date is before the third business day following consummation. The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice required by 12 CFR or , or delivery of all material disclosures, whichever occurs last. The TILA Disclosure Date Test does not apply to this loan due to the following finding. Closed-end (12 CFR (b)), Open-end (12 CFR 226.5b(1)) The loan is not a "residential mortgage transaction," meaning it is not a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained in the consumer's principal dwelling to finance the acquisition or initial construction of that dwelling. FAIL NOT TESTED FAIL FAIL FEDERAL RESPA This loan was not tested against the Good Faith Estimate disclosure date test. A Good Faith Estimate disclosure date was not provided. NOT TESTED FHA This loan is not covered by the FHA tests. (HUD Handbook REV-5) The FHA tests only apply to FHA loans. NOT COVERED CT NONPRIME HOME LOAN INVESTOR CRITERIA This loan is not covered by the CT Nonprime Home Loan Investor Criteria due to one of the following findings: The loan is made in a state other than Connecticut; or The loan's closing date, or application date if the closing date is unknown, is before the effective date of July 1, NOT COVERED ME RATE SPREAD HOME LOAN INVESTOR CRITERIA This loan is not covered by the ME Rate Spread Home Loan Investor Criteria for one of the NOT following reasons: (Title 9-A 8-103(1A)(V) as enacted by PL 2007, Ch 273) COVERED The loan is made in a state other than Maine; or The loan's closing date, or application date if closing date is unknown, is before the effective date of January 1,

10 NY SUBPRIME HOME LOAN INVESTOR CRITERIA This loan is not covered by the NY Subprime Home Loan Investor Criteria due to one of the following findings: (NY SB 8143 Section 28(c)) The loan is made in a state other than New York; or The loan's closing date, or application date if the closing date is unknown, is before September 1, 2008, the effective date of the subprime home loan provisions in NY SB NOT COVERED UT HIGH COST HOME LOAN ACT (UT HB 160) This loan passed the APR threshold test due to one of the following findings: (UT HB 160, 2) The loan is a first mortgage and the APR is 9.924%, which does not exceed the yield of 4.560%, as of May 13, 2005 on 20 year Treasury securities (the Treasury securities having comparable periods of maturity), plus 8 percentage points; or The loan is a junior mortgage and the APR is 9.924%, which does not exceed the yield of 4.560%, as of May 13, 2005 on 20 year Treasury securities (the Treasury securities having comparable periods of maturity), plus 10 percentage points. This loan passed the points and fees threshold test. (UT HB 160, 2) The total points and fees of 3, payable at or before closing do not exceed the greater of 8% of the total loan amount or High-Cost Mortgage (UT HB 160, 2) The loan is not a high-cost mortgage, as defined in the legislation, due to one of the following findings: The loan is not secured by the borrower's principal dwelling; or The loan passes both the APR threshold test and the points and fees threshold test. The prepayment term test is not applicable to this loan. (UT HB 160, 2(5), 3) The loan is not a high-cost mortgage, as defined in the legislation. The additional state law prepayment penalty test is not applicable to this loan. (UT HB 160, 3) The loan is not a high-cost mortgage, as defined in the legislation. The potential negative amortization test is not applicable to this loan. (UT HB 160, 4) The loan is not a high-cost mortgage, as defined in the legislation. The interest only test is not applicable to this loan. (UT HB 160, 4) The loan is not a high-cost mortgage, as defined in the legislation. The balloon payment test is not applicable to this loan. (UT HB 160, 4) The loan is not a high-cost mortgage, as defined in the legislation. The credit insurance and debt cancellation fees test is not applicable to this loan. (UT HB 160, 7) The loan is not a high-cost mortgage, as defined in the legislation. Legislative Summary Alert PASS PASS NO ALERT Mortgage Forms (UT HB 160, 11) All lines, figures, forms, and blanks that regulate, govern, control, and authorize a mortgage must be filled in before the documents are signed. Effect of Failure to Comply (UT HB 160, 13) Failure to provide the notices or information described in Utah Code Subsection 61-2d-105(1) (UT HB 160, 5) and Utah Code Sections 61-2d-111 and 61-2d-112 (UT HB 160, 11 and 12) does not affect the enforceability of the loan or any of its terms. STATE REGULATIONS Tests pertaining to State Regulations were not performed. NOT 10

11 No state license was selected for the loan. PERFORMED STATE REGULATIONS RESTRICTED FEES Tests pertaining to State Regulations Restricted Fees were not performed. No state license was selected for the loan. LOAN DETAIL NOT PERFORMED CLIENT CE ID: Report Type: 28B01WBO5M Post-Close Mortgage Loan User Name: lindsey fox Client Name: Loan Safe Solutions LENDER Lender Name: American Home Mortgage Acceptance, Inc. : Lender Loan Number: : Originator Name: : MIN: : License Type: Not Configured DIDMCA Exempt: No HUD Approved Lender: Not Configured INVESTOR Default: Investor Criteria: Investor Criteria: Investor Criteria: Investor Criteria: FHA CT Nonprime Home Loan ME Rate Spread Home Loan NY Subprime Home Loan BORROWER First Name: Daniel Last Name: Finlay Total Income: / month DTI Ratio: % PROPERTY Address: Number Street Name Type (St, Ave, etc.) Direction Unit # Emmeline Dr City County State Zip Riverton UT Type: Detached SFD Number of Units: 1 Occupancy: Primary Residence LOAN INFORMATION Loan Amount: (exclude PMI, MIP, 472, Loan Amount: 472, (with Finance Charge) Funding Fee financed) Program Type: ARM Interest Rate: % 11

12 Loan Purpose: Refinance Undiscounted Rate: % Purpose of Refinance: Disclosed APR: % Refinancing Portfolio Disclosed Finance Loan: Charge: 687, LTV Ratio: % Irregular Payment Transaction: No CLTV Ratio: % Maturity Term: 360 months Loan Type: Conventional Amortization Term: 360 months Lien Type: First Mortgage Late Charges: % Document Type: Grace Period: 15 days PREPAYMENT PENALTY Program Name: Prepayment Penalty Program: Prepayment Term: Not Provided Not Provided 36 months Max. Prepayment Penalty Amount: (for high-cost points & fees) CONSTRUCTION / CONSTRUCTION TO PERMANENT Rate: % Construction Term: months Estimate Interest on: Amount Advanced Interest Reserve: ADJUSTABLE RATE MORTGAGE ARM Margin: % First Adjustment: Cap % Period 1 months ARM Index: % Subsequent Cap Adjustment: % Period 0 months Ceiling: % Floor: % Adjustment Rounding: Round nearest 1/8 GRADUATED PAYMENT MORTGAGE Rate: % Term: years POTENTIAL NEGATIVE AMORTIZATION (OPTION ARM) Negative Amortization Type None BUYDOWN 1. Rate: % Term months 2. Rate: % Term months 3. Rate: % Term months 4. Rate: % Term months 5. Rate: % Term months INTEREST ONLY (EXCLUDING NEGATIVE AMORTIZATION AND OPTION ARM) Term: 120 months DUAL AMORTIZATION Initial Amortization Subsequent Amortization Term months Period months Term months Period months MORTGAGE INSURANCE (PMI) Upfront Premium: Monthly Premium (Initial): % or Prepaid % or Period months 12

13 Cash/Credit Monthly Premium (Renew): Financed 0.00 % or Period months Cancel at % Adjust Payments Due to Upfront months Calculate Premiums Using Loan Amount Premium Cancel At Midpoint DATES Application Date: 06/09/2005 GFE Disclosure Date: TIL Disclosure Date: Sec. 32 (HOEPA) Disclosure Date: Closing / Settlement 09/10/2005 Date: Funding / Disbursement Date: 09/10/2005 Rate Lock Date: 800: ITEMS PAYABLE IN CONNECTION WITH LOAN 13 Prepaid Finance Charges Financed By Lender Compensation To 801 Loan Origination Fee: 2, Broker 802 Loan Discount Fee: bona fide Other 803 Appraisal Fee: Other 804 Credit Report Fee: Broker 805 Lender Inspection Fee (performed prior to closing): Other Lender Inspection Fee (performed post closing): Other 806 Mortgage Insurance Application Fee: Other 807 Assumption Fee: Other Modification Fee: Other Tie-in Fee: Other Mortgage Broker Fee (Direct): Mortgage Broker Fee (Indirect / POC): Yield Spread Premium (Indirect / POC): 17, CLO Access Fee: Other Application Fee: Other Rate Lock Fee: Other Commitment Fee: Other Processing Fee: Broker Underwriting Fee: Other Administration Fee: Lender Appraisal Review Fee: Other Appraisal Re-Inspection Fee: Other Flood Determination - Initial Fee: Lender Flood Determination - Life of Loan Fee: Other Document Preparation Fee: Other Document Signing Fee: Other Courier / Messenger Fee: Other Tax Related Service Fee: Lender Wire Transfer Fee: Lender Warehousing Fee: Other Advance Mortgage Payments: Other Credit Life Insurance Premium: Other Accident Insurance Premium: Other

14 Health Insurance Premium: Other Loss of Income Insurance Premium: Other Debt Cancellation Fee: Other Prepayment Penalty: Other Compliance Audit / Quality Control Fee: Other Seller-Paid Points and Fees: 900: ITEMS REQUIRED BY LENDER TO BE PAID IN ADVANCE Prepaid Finance Charges Financed By Lender Compensation To 901 Interest: for 15 day(s) Lender 902 Mortgage Insurance Premium: Other 903 Hazard Insurance Premium: Other County Property Taxes: Other Flood Insurance Premium: Other 1000: RESERVES DEPOSITED WITH LENDER Prepaid Finance Charges Financed By Lender Compensation To 1001 Hazard Insurance Reserve: Other 1002 Mortgage Insurance Reserve: Other 1003 City Property Taxes Reserve: Other 1004 County Property Taxes Reserve: Other 1005 Annual Assessments: Other 1100: TITLE CHARGES Prepaid Finance Charges Financed By Lender Compensation To 1101 Settlement / Closing / Escrow Fee: Other 1102 Abstract / Title Search Fee: Other 1103 Title Examination Fee: Other 1104 Title Insurance Binder Fee: Other 1105 Title Document Preparation Fee: Other 1106 Notary Fee: Other 14

15 1107 Attorney's Fee: Excludable due to borrower choice Other Attorney's Fee (Other): Excludable due to borrower choice Other 1108 Title Insurance: 1, Other 1109 Lender's Coverage: 1, Other 1110 Owner's Coverage: Other Assignment Endorsement Fee: Other Sub-Escrow Fee: Other Reconveyance Fee: Other Title Courier Fee: Other Funding, Wire, or Disbursement Fee: Other fee: Other tracking fee: Other elect deed: 5.00 Other rec trust deed: Other 1200: GOVERNMENT RECORDING AND TRANSFER CHARGES Prepaid Finance Charges Financed By Lender Compensation To 1201 Recording Fee: Other 1202 City / County / Tax / Stamps: Other 1203 State Tax / Stamps: Other Subordination Recording Fee: Other Assignment Recording Fee: Other Recording Service Fee: Other Intangible Tax: Other tax intallment: Other 1300: ADDITIONAL SETTLEMENT CHARGES Prepaid Finance Charges Financed By Lender Compensation To 1301 Survey Fee: Other 1302 Pest Inspection Fee: Other Architectural / Engineering Fee: Other Building Permit: Other 15

16 FINDINGS DETAIL FEDERAL TILA This loan failed the TILA finance charge test. (12 CFR (d)(1)) The finance charge is 1,089, The disclosed finance charge of 687, is not considered accurate because it is understated by more than 100. This loan failed the TILA rescission finance charge test. (12 CFR (g)(1)) The finance charge is 1,089, The disclosed finance charge of 687, is not considered accurate for purposes of rescission because it is understated by more than 1/2 of 1 percent of the face amount of the note or 100, whichever is greater. This loan failed the TILA APR test. (12 CFR (a)(2),(4)) The annual percentage rate (APR) is 9.924%. The disclosed APR of 6.744% is not considered accurate because it is more than 1/8 of 1 percentage point above or below the APR as determined in accordance with the actuarial method. This loan failed the TILA right of rescission test. Closed-end (12 CFR (a)(3)), Open-end (12 CFR (a)(3)) The funding date is before the third business day following consummation. The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice required by 12 CFR or , or delivery of all material disclosures, whichever occurs last. FAIL FAIL FAIL FAIL 16

17 OTHER FINDINGS VIOLATIONS FOUND BASIC REQUIREMENTS There is no evidence found that disclosures were provided either at time of application or before consumer paid any nonrefundable fee. There is no evidence found that the booklet entitled Consumer Handbook on ARMs or a suitable substitute was provided. There is no evidence found that a statement that interest rate, payment, or the term can change. There is no evidence found that the index/formula with source of information was disclosed. There is no evidence found that an explanation of the interest rate/payment determination and margin. There is no evidence found that a statement explaining that the consumer should ask for the current margin and interest rate. There is no evidence found that the consumer was provided with the rules relating to changes. There is no evidence found that the consumer was provided with an historical example or the maximum interest rate and payment. There is no evidence that consumer was provided an explanation of how the loan payment can be calculated based on example. There is no evidence that the consumer was provided with information on, and timing of, adjustment notices. There is no evidence that the consumer was provided a statement that discloses for other variable rate loan programs that are available. 17

18 NARRATIVE 18

19 TILA AND RESPA RIGHT TO CANCEL NOTICES AND MATERIAL DISCLOSURES Under the Truth In Lending Act ( Hereafter TILA ), a homeowner has the absolute right to rescind most transactions for which the home is taken as collateral, other than transactions for the purchase of the home. TILA rescission rights arise automatically when the transaction satisfies the following three criteria: (1) the transaction is a consumer credit transaction; (2) in which a nonpurchase lien or security interest is or will be placed; and (3) on the consumer s principal dwelling. Specifically excluded are transactions in which the loan is for the initial purchase or for construction of the property. Furthermore, if the mortgage debt is refinanced with the same lender, the right of rescission is limited to the new advance, if any. In a rescindable transaction, each consumer must be given a copy of the disclosure statement with all material information correctly disclosed. If these material disclosures are not properly provided, the three-day right to rescind may be extended until one of the following events occurs: (1) the expiration of three years after consummation of the transaction; (2) the transfer of all of the consumer s interest in the property; or (3) the sale of the property. All persons entitled to rescind under TILA must receive two copies of the rescission notice rights and one copy of the material disclosures at the proper time and in the proper manner. TILA requires that the rescission notice provide the following information: (1) the retention or the acquisition of a security interest in the consumer s principal dwelling; (2) the consumer s right to rescind; (3) how to exercise the right to rescind with a form for that purpose, designating the address of the creditor s place of business; (4) the effects of rescission; and (5) the date the rescission period expires. 19

20 3 DAY RIGHT TO CANCEL FINDINGS According to the Uniform Residential Loan Application this loan is a Refinance of a Primary Residence which requires two(2) copies of a 3-Day Right to Cancel Notice. The loan documents provided contained 1 properly completed rescission notices and a violation of TILA was identified. Reference: Comments: 20

21 THE INTENT & PURPOSE OF THE FEDERAL TRUTH IN LENDING ACT The Federal Truth in Lending Act was enacted on May 29, 1968, as title I of the Consumer Credit Protection Act (Public Law ), thus, the Truth in Lending Act implemented by Regulation Z (12 C.F.R. 226) became effective July 1, The Federal Reserve Boards Commentaries (Supp. I.) on Regulation Z also provide a wealth of information about the purpose of this Federal law and its need to protect consumers from inadequate and misleading disclosures. The intent and purpose that Congress envisioned behind this Federal law is to ensure that credit terms are fully disclosed in a meaningful way. Therefore consumer(s) [namely borrower(s)] can compare credit terms more readily and knowledgably [15 U.S.C (a)] and certainly before consummation i.e. before being contractually obligated on a credit transaction [Regulation Z, 12 C.F.R (13)]. The Federal Truth in Lending Act also promotes the informed use of credit [Regulation Z, 12 C.F.R.226.1(b)] and in so doing brings an awareness to a potential borrower (which he or she did not have before) as stated in [15 U.S.C (a)]. This awareness requires and places a legal obligation on creditor(s) to fully explain the nature, cost and effect of credits terms including definitions, which would otherwise would result in undisclosed credit terms. By complying with the disclosure requirements (both oral and written) a consumer then is able to more readily compare credit terms with other institutions and most notably before consummation [Regulation Z, 12 C.F.R (13)]. The consumer then has the freedom and choice to choose whether or not what has been explained is appropriate for their needs. A creditor who conceals or misrepresents a term or fails to explain its impact whether at the outset or during the course of the loan, whether paid outside closing or at or during closing, violates this Federal law and is subject to civil liability [15 U.S.C. 1640(a)]. 21

22 FEDERAL TRUTH-IN-LENDING DISCLOSURE STATEMENT FINDINGS: 1. The APR, Annual Percentage Rate is deceptively and fraudulently understated by 3.18% 2. The Finance Charge and The Total of Payments are deceptively and fraudulently understated by 401, In the Area titled Your Payment Schedule Will Be the payments are deceptively and fraudulently disclosed as: 1 Payments of Payments of Payments of Payments of Payments of On the Truth in Lending Disclosures under the Sections titled Your Payment Schedule Will Be, for the payments to be accurate as stated in the Adjustable Rate Note and Rider the payments should have been disclosed as: 1 Payments of Payments of Payments of Payments of Under Variable Rate Feature it states your loan has a variable rate feature. Disclosures about the variable rate feature have been provided to the borrower earlier is fraudulent. The variable rate feature was not disclosed until closing. 5. Borrower was not asked to sign an agreement that he didn t want separate disclosures for the itemizations on the Good Faith Estimate, Settlement Statement and Truth-in-Lending forms as required by Title 12 code of Federal Regulations, et esq. ADDITIONAL NOTES TO BORROWER Special rules apply to the finance charge tolerance if the (closed-end) rescindable mortgage transaction is involved in foreclosure action. The Disclosed finance charge is considered accurate if it does not vary from the actual finance charge by more than 35. In the Event of a foreclosure, the consumer may exercise the right of recession if the disclosed finance charge is understated by more than

23 Federal Truth-in-Lending Disclosure Statement What Was Disclosed vs. What Was Under Disclosed 1. Annual Percentage Rate NOTES Disclosed to Borrower(s) Actual Under Disclosed The APR, Annual Percentage Rate is deceptively and fraudulently understated by 3.18% 2. Finance Charge Disclosed to Borrower(s) Actual Under Disclosed 687, ,089, , The Finance Charge is deceptively and fraudulently understated by 401, Amount Financed Disclosed to Borrower(s) Actual Under Disclosed 466, , , The Federal Truth-in-Lending Disclosure Statement that were provided were not properly completed in that Under TILA, there are five material disclosures which must be provided: (1) The Annual Percentage Rate ( APR ), including applicable variable-rate disclosures; (2) The Finance Charge; (3) The Amount Financed; (4) The Total of Payments; and 4. Total of Payments Disclosed to Borrower(s) Actual Under Disclosed 1,154, ,557, , The The Total of Payments is deceptively and fraudulently understated by 403, Disclosed Payment Schedule # of Payments Amount of Payment In the Area titled Your Payment Schedule Will Be the payments are deceptively and fraudulently disclosed as shown above. Actual Payment Schedule # of Payments Amount of Payment On the Truth in Lending Disclosures under the Sections titled Your Payment Schedule Will Be, for the payments to be accurate as stated in the Adjustable Rate Note and Rider the payments should have been disclosed as shown above. (5) The Payment Schedule. Taking certain tolerances into account, a misstatement of any one of these five disclosures constitutes a material nondisclosure. Failure to provide clear and conspicuous material disclosures or to provide them at consummation and in a form that the consumer can keep, extends the right of rescission. The disclosed APR on a mortgage Transaction is accurate if it is within one-eighth of 1 percentage point of the APR calculated under Regulation Z In the Event of a foreclosure, the consumer may exercise the right of recession if the disclosed finance charge is understated by more than

24 AMORTIZATION SCHEDULE AUDIT INFORMATION CE ID: 28B01WBO5M Client Name: Loan Safe Solutions User Name: Lindsey fox Lender Loan Number: Product Name: ComplianceAnalyzer Report Type: Post-Close Mortgage Loan Borrower Name: Daniel Finlay Report Date / Time: 09/23/ :46PM (PDT) Property Address: Emmeline Dr Report Version: 1 Riverton, UT AMORTIZATION SCHEDULE Payment Interest Monthly Principal Interest # Rate Payment Payment Payment MI LTV Balance % % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472,

25 Payment Interest Monthly Principal Interest # Rate Payment Payment Payment MI LTV Balance % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472,

26 Payment Interest Monthly Principal Interest # Rate Payment Payment Payment MI LTV Balance % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 3, , % 472, % 4, , % 471, % 4, , % 471, % 4, , % 470, % 4, , % 469, % 4, , % 469, % 4, , % 468, % 4, , % 468, % 4, , % 467, % 4, , % 466, % 4, , % 465, % 4, , % 465, % 4, , % 464, % 4, , % 463, % 4, , % 463, % 4, , % 462, % 4, , % 461, % 4, , % 461, % 4, , % 460, % 4, , % 459, % 4, , % 458, % 4, , % 458, % 4, , % 457, % 4, , % 456, % 4, , % 455, % 4, , % 455, % 4, , % 454, % 4, , % 453, % 4, , % 452,

27 Payment Interest Monthly Principal Interest # Rate Payment Payment Payment MI LTV Balance % 4, , % 452, % 4, , % 451, % 4, , % 450, % 4, , % 449, % 4, , % 448, % 4, , % 448, % 4, , % 447, % 4, , % 446, % 4, , % 445, % 4, , % 444, % 4, , % 443, % 4, , % 442, % 4, , % 442, % 4, , % 441, % 4, , % 440, % 4, , % 439, % 4, , % 438, % 4, , % 437, % 4, , % 436, % 4, , % 435, % 4, , % 434, % 4, , % 433, % 4, , % 432, % 4, , % 431, % 4, , % 431, % 4, , % 430, % 4, , % 429, % 4, , % 428, % 4, , % 427, % 4, , , % 426, % 4, , , % 425, % 4, , , % 424, % 4, , , % 423, % 4, , , % 422, % 4, , , % 420, % 4, , , % 419, % 4, , , % 418, % 4, , , % 417, % 4, , , % 416, % 4, , , % 415, % 4, , , % 414, % 4, , , % 413, % 4, , , % 412, % 4, , , % 411, % 4, , , % 410, % 4, , , % 408, % 4, , , % 407, % 4, , , % 406, % 4, , , % 405, % 4, , , % 404, % 4, , , % 403, % 4, , , % 401, % 4, , , % 400, % 4, , , % 399,

28 Payment Interest Monthly Principal Interest # Rate Payment Payment Payment MI LTV Balance % 4, , , % 398, % 4, , , % 396, % 4, , , % 395, % 4, , , % 394, % 4, , , % 393, % 4, , , % 391, % 4, , , % 390, % 4, , , % 389, % 4, , , % 387, % 4, , , % 386, % 4, , , % 385, % 4, , , % 383, % 4, , , % 382, % 4, , , % 381, % 4, , , % 379, % 4, , , % 378, % 4, , , % 376, % 4, , , % 375, % 4, , , % 374, % 4, , , % 372, % 4, , , % 371, % 4, , , % 369, % 4, , , % 368, % 4, , , % 366, % 4, , , % 365, % 4, , , % 363, % 4, , , % 362, % 4, , , % 360, % 4, , , % 359, % 4, , , % 357, % 4, , , % 356, % 4, , , % 354, % 4, , , % 352, % 4, , , % 351, % 4, , , % 349, % 4, , , % 347, % 4, , , % 346, % 4, , , % 344, % 4, , , % 342, % 4, , , % 341, % 4, , , % 339, % 4, , , % 337, % 4, , , % 336, % 4, , , % 334, % 4, , , % 332, % 4, , , % 330, % 4, , , % 328, % 4, , , % 327, % 4, , , % 325, % 4, , , % 323, % 4, , , % 321, % 4, , , % 319, % 4, , , % 317, % 4, , , % 315,

29 Payment Interest Monthly Principal Interest # Rate Payment Payment Payment MI LTV Balance % 4, , , % 313, % 4, , , % 311, % 4, , , % 310, % 4, , , % 308, % 4, , , % 306, % 4, , , % 304, % 4, , , % 302, % 4, , , % 299, % 4, , , % 297, % 4, , , % 295, % 4, , , % 293, % 4, , , % 291, % 4, , , % 289, % 4, , , % 287, % 4, , , % 285, % 4, , , % 283, % 4, , , % 280, % 4, , , % 278, % 4, , , % 276, % 4, , , % 274, % 4, , , % 271, % 4, , , % 269, % 4, , , % 267, % 4, , , % 264, % 4, , , % 262, % 4, , , % 260, % 4, , , % 257, % 4, , , % 255, % 4, , , % 253, % 4, , , % 250, % 4, , , % 248, % 4, , , % 245, % 4, , , % 243, % 4, , , % 240, % 4, , , % 238, % 4, , , % 235, % 4, , , % 232, % 4, , , % 230, % 4, , , % 227, % 4, , , % 224, % 4, , , % 222, % 4, , , % 219, % 4, , , % 216, % 4, , , % 214, % 4, , , % 211, % 4, , , % 208, % 4, , , % 205, % 4, , , % 202, % 4, , , % 200, % 4, , , % 197, % 4, , , % 194, % 4, , , % 191, % 4, , , % 188, % 4, , , % 185,

30 Payment Interest Monthly Principal Interest # Rate Payment Payment Payment MI LTV Balance % 4, , , % 182, % 4, , , % 179, % 4, , , % 176, % 4, , , % 173, % 4, , , % 170, % 4, , , % 166, % 4, , , % 163, % 4, , , % 160, % 4, , , % 157, % 4, , , % 154, % 4, , , % 150, % 4, , , % 147, % 4, , , % 144, % 4, , , % 140, % 4, , , % 137, % 4, , , % 134, % 4, , , % 130, % 4, , , % 127, % 4, , , % 123, % 4, , , % 120, % 4, , % 116, % 4, , % 113, % 4, , % 109, % 4, , % 105, % 4, , % 102, % 4, , % 98, % 4, , % 94, % 4, , % 91, % 4, , % 87, % 4, , % 83, % 4, , % 79, % 4, , % 75, % 4, , % 71, % 4, , % 67, % 4, , % 63, % 4, , % 59, % 4, , % 55, % 4, , % 51, % 4, , % 47, % 4, , % 43, % 4, , % 39, % 4, , % 35, % 4, , % 30, % 4, , % 26, % 4, , % 22, % 4, , % 17, % 4, , % 13, % 4, , % 8, % 4, , % 4, % 4, , %