Continuing with the TRID cheat sheets, here’s the next batch of summaries regarding the new updates that will take effect in October 2018.
Good Faith and Revised Disclosures
This is another long list, as there is a lot in it. Here we go.
- There is some new commentary on the good faith standards when third-party services are left off the settlement service provider list. Just new commentary, not a change to the actual rules.
- Clarifies the standard that applies if the borrower is permitted to shop and selects a provider not on the SSPL.
- A revised LE can be provided for either informational purposes or to reset tolerances if applicable, and it must be based on the best information reasonably available.
- Clarifies that an LE cannot be issued after a CD if the interest rate changes. If the rate requires re-disclosure, the CD must be used. This doesn’t appear new, just additional commentary.
- Extending the expiration date of an LE extends the time the consumer has to indicate an intent to proceed. If the consumer indicates intent to proceed during the extended period, the creditor must use the original charges disclosed in the LE for good faith and tolerances.
- If a revised LE is issued after the Intent to Proceed, the expiration date and time for the disclosed costs are left blank.
- Per-diem interest changes post-consummation do not require a re-disclosed CD.
- There are new options for disclosing a refund for a tolerance violation, and there is new guidance on properly disclosing principal reductions.
Decimal Places and Rounding
Prepaids per-diem & monthly amounts for Initial Escrow = rounded to nearest whole cent
Percentages = rounded to 3 decimal places, but zeroes don’t count
Calculating Cash to Close
The Calculating Cash to Close table receives a list of updates and clarifications.
- Clarifies that the loan amount used for the Closing Costs Financed is the face amount of the note.
- Clarifies the disclosure of the amount disclosed as the Down Payment/Funds from Borrower.
- Provides guidance on the amount disclosed as the Down Payment /Funds from Borrower in cash-back purchase transactions, simultaneous subordinate financing purchase transactions, and construction transactions.
- Provides guidance on when the integrated disclosures should include an amount for the Down Payment/Funds from Borrower.
- Provides guidance on Adjustments and Other Credits in the integrated disclosures.
- Provides further guidance on how to disclose lender credits.
- Says to use the most recent LE when completing the LE column in the Calculating Cash to Close table.
- Provides additional guidance on calculating the Closing Costs Financed on the CD.
- Provides additional options for disclosing the seller credits statement on the CD.
- Gives details on which amounts are included in the Adjustments and Other Credits.
I thought this would be the last one of these, but looking at what’s left I think there enough for one more. So look out for that coming soon!
Bryan T. Noonan, Esq.
Regulatory Compliance Consultant
SPILLANE CONSULTING ASSOCIATES, INC.
501 John Mahar Highway, Suite 101
Braintree, MA 02184