TRID

The New TRID Rules Cheat Sheet (Part 3)

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.

  1. 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.
  2. Clarifies the standard that applies if the borrower is permitted to shop and selects a provider not on the SSPL.
  3. 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.
  4. 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.
  5. 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.
  6. If a revised LE is issued after the Intent to Proceed, the expiration date and time for the disclosed costs are left blank.
  7. Per-diem interest changes post-consummation do not require a re-disclosed CD.
  8. 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.

  1. Clarifies that the loan amount used for the Closing Costs Financed is the face amount of the note.
  2. Clarifies the disclosure of the amount disclosed as the Down Payment/Funds from Borrower.
  3. 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.
  4. Provides guidance on when the integrated disclosures should include an amount for the Down Payment/Funds from Borrower.
  5. Provides guidance on Adjustments and Other Credits in the integrated disclosures.
  6. Provides further guidance on how to disclose lender credits.
  7. Says to use the most recent LE when completing the LE column in the Calculating Cash to Close table.
  8. Provides additional guidance on calculating the Closing Costs Financed on the CD.
  9. Provides additional options for disclosing the seller credits statement on the CD.
  10. 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
781-356-2772
781-356-2837 (fax)
www.scapartnering.com

The New TRID Rules Cheat Sheet (Part 1)

The new TRID rules are out, though they don’t fully take effect until October 1, 2018. Starting in about 60 days, compliance with them are optional. Even though they are optional, it’s always smart to be ahead of the curve and prepared for when they are mandatory.

Still, not all the rules will all apply to everyone. So here’s a cheat sheet, a quick reference for what rules are changing. Use it to evaluate what will apply to your institution so you can start planning and prioritizing what you need to do to be compliant by October 2018.

Post-Consummation Notices

Currently, the TRID rules requires a creditor or servicer to provide certain disclosures after the loan is closed. The new rule applies to 2 disclosures: the notice when an escrow account is closed, and the partial payment policy of a new owner of loan. Those notices aren’t changing.

Under the old rules though, the notices only applied to mortgage applications received on or after October 3, 2015. The new rules say the notice requirements will apply now regardless of when the application was received.

Loan Secured by a Cooperative

Currently, whether certain disclosures need to be provided on loans secured by cooperatives depends on how state property law classifies the cooperative (that is, whether it’s treated as real property or personal property). The new rule takes away the state law requirement, and requires the disclosures to be made on all loans secured by cooperatives (closed-end consumer loans, of course).

Loans to Trusts

Commentary is being added to clarify that loans to certain trusts established for tax or estate planning purposes is treated as though they are extended to natural persons.

Exemptions for Housing Assistance Loans

TRID rules provide disclosure exemptions to certain housing assistance loans (the details are outside this post; it’s supposed to be a cheat sheet, remember?) The new rules say:

  1. Transfer taxes can now be payable by the consumer, and
  2. Recording feeds and transfer taxes are excluded from the 1-percent cap on total costs payable by the consumer.

It also changes the disclosures required.

I want this to be a quick reference, so I’m going to keep it relatively short. The next part of the new rule will get into some deeper and more pertinent subjects, such as significant construction loan rules, tolerances, and good faith and revised disclosures. I don’t want them to get buried here, so I’m going to leave this as it is.

Remember though, this is just scratching the surface. We’ll be learning a lot more about the new rules in the next few months.

Bryan T. Noonan, Esq.
Regulatory Compliance Consultant
SPILLANE CONSULTING ASSOCIATES, INC.
501 John Mahar Highway, Suite 101
Braintree, MA  02184
781-356-2772
781-356-2837 (fax)
www.scapartnering.com