trid t ila r espa i ntegrated d isclosure | equal housing lender | nmls 130562 | 4121 gilmer rd,...

TRIDTILA RESPA INTEGRATED DISCLOSURE

| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604

Effective August 1st, 2015

Kenneth Travis NMLS #233918

Loan Estimate (LE)

This form will combine and replace three disclosures:

•GFE-Good Faith Estimate•TIL-Truth in Lending•Right to Receive Copy of Appraisal

The LE must be disclosed in good faith, containing terms and costs that are as close to the actual terms and costs as reasonable available to the loan officer.

The LE must be disclosed to the consumer within three business days of receipt of a completed loan application

e.g. Three business days from receipt of the 6 items that make an application. Aka “SPINAL” 1. Consumer’s Name 4. Social Security Number to obtain Credit 2. Consumer’s Income 5. Estimated Value of Property 3. Mortgage Loan Amount 6. Property Address


Closing Disclosure(CD)

This form will combine and replace the HUD-1 and Final TIL:

The CD must contain actual terms and costs for the transaction. The CD must be received by the borrower three days prior to consummation.

Why replace the old disclosures with the new ones? These disclosures have been created by the Consumer Financial Protection Bureau (CFPB) as a way to improve the borrower’s understanding of their closing costs, making it easier for borrowers to comparison shop and, ultimately, to protect the consumer experience.


TRID New vs. Old Initial Disclosures

Current Process•Lender must provide the borrower an initial Good Faith Estimate (GFE) and Truth in Lending Disclosures (TIL) when the borrower has provided the lender with the required information in connection with the lender’s prequalification or full application review

•“Cash to close” estimate is not included on the GFE and TIL disclosures.

•Borrowers see settlement services fees listed in random order on the GFE.

What’s Changing•Lender must provide the borrower a Loan Estimate (LE) when a borrower identifies a specific property and all other loan application requirements have been met

•The LE includes a “Cash to Close” estimate.

•Borrowers must see settlement service fees listed alphabetically under different sub-categories on the LE and the Closing Disclosure (CD).


TRID New vs. Old Initial Disclosures

Current Process•The GFE and TIL disclose taxes, insurance and other costs only if those items will be escrowed

What’s Changing•The new Loan Estimate (LE) and Closing Disclosures (CD) require disclosure of estimated taxes, insurance and other items to borrowers, even if those items will not be escrowed. •CD will disclose all seller related fees as well. Any payoffs the seller is making and Realtor commissions are listed as well.


TRID New vs. Old Changed Circumstances

Current Process•Certain changed circumstances and borrower requested changes can trigger either a revised GFE that must be provided to the borrower within three general business days after receiving notice of the changed circumstances

•For fees subject to the 10% tolerance, re-disclosure of the GFE is required with three business days of a changed circumstance regardless of whether the 10% threshold is reached.

What’s Changing•Certain changed circumstances and borrower requested changes can trigger either a revised Loan Estimate (LE) or Closing Disclosure (CD), depending on where the borrower is in the application/loan closing process. Redisclosure must be within three business days

•For fees subject to the 10% tolerance, re-disclosure of the LE or CD will not be required until the aggregate total of changes reaches 10% (unless the change is prompted by a borrower request) Caveat: a revised CD cannot be used for tolerance purposes. i.e. One cannot use a CD for a CIC.


TRID New vs. Old Closing Disclosures

Current Process•The settlement agent is responsible for preparing the final HUD-1.

•The final HUD-1 contains all borrower and seller details on a single document

•The borrower may request to review the final HUD-1 one business day before closing

What’s Changing•Lender (subjective) will be responsible for properly completing the Closing Disclosure (CD), including any revisions.

•On financed home purchase transactions, a borrower and/or seller can request separate versions of the CD. The details of the Seller’s portion of the transaction can be disclosed on a separate CD and will not be included in the borrower’s CD. *At this time we are not allowing modified CD’s unless state law requires the separate forms

•Borrower must receive the CD at least three business days prior to consummation (signing), giving them more time to compare their CD with their LE.


TRID New vs. Old Closing Disclosures cont.

Current Process•The TIL may be re-disclosed, and loans cannot close until at least three precise business days have elapsed from the borrower’s receipt of any subsequent TIL disclosures

•A new TIL must be sent to the borrower if the APR increases or decreases more than 0.125% for fixed rate products (0.25% for ARM products). Also, a new TIL disclosure may also be required in a number of other instances, even if the APR has not changed beyond the maximum threshold.

What’s Changing•Once a Closing Disclosure (CD) is issued, no additional Loan Estimates (LE) can be provided to a borrower. If changes occur, those changes must be disclosed on a revised CD, where permitted under the Rule. Tolerance Caveat

•Among the re-disclosure requirements are the following which invoke an additional three business day waiting period:

– If the APR INCREASES by more than 0.125% for fixed rate products (0.25% for ARM products).

– The loan product has changed (e.g. fixed rate has changed to an adjustable rate, 15 year to 30 year, or loan program changes)


TRID New vs. Old Closing Disclosures cont.

Current Process•Certain fees that a borrower cannot shop for, such as an appraisal fee, have a 10% tolerance.

What’s Changing•Certain fees that a borrower cannot shop for, such as appraisal fees, now have a zero percent tolerance.

Note: Refer to the CFPB website for a list of fees that cannot increase from what was originally disclosed on the Loan Estimate (unless there is a valid changed circumstance or borrower requested change).


What Realtors Need to Know about TRID

1. You will need to be able to explain the new disclosures

2. The party providing the closing disclosure will be different. Most lenders will provide the final Closing Disclosure (CD). Escrow will no longer be responsible for providing this to the borrower.

3. Timing of closing will be based on the CD delivery: Borrowers will be given three business days to review the CD prior to consummation (signing). The three days starts when the borrower RECEIVES the form, not when the lender sends it. As a result, unless confirmation of receipt is received by the lender, the wait period will be seven business days.

4. Disclosures will be more frequent and in greater numbers

Note: If there are changes after the closing disclosure is delivered that do not affect APR or loan product there is no additional wait period. The revised CD can be given at consummation.


What should you ask a mortgage advisor like me?

Loan Estimate (LE)•Listing Agent: Has the borrower given their intent to proceed? If not, they have not selected their lender. They have ten days to express their intent.

•Selling Agent: Confirm that the borrower has expressed their intent to proceed and provided their credit card information to order the appraisal. Credit card information can only be accepted by the lender AFTER intent to proceed has been given.

Closing Disclosure (CD)•Listing Agent: Make sure Escrow/Lender has all of your fees including commissions. Make sure the borrower received the Closing Disclosure at least three business days before signing.

•Selling Agent: Make sure Escrow/Lender has all of your fees including commissions. Make sure the borrower received the CD at least three business days before signing and has acknowledged receipt of the CD.


TRID: Exempt Transactions

These exempt transactions will use the old Good Faith Estimate (GFE), Truth in Lending (TILA) and HUD-1:

•Home Equity Lines of Credit •Reverse Mortgages•Mobile Homes •Business, Organization, Agricultural and Commercial Loans•Property such as house boats…



After the Closing Disclosure is issued, try not to change anything. IF you do change something notify Escrow/Lender IMMEDIATELY. If client wants to change something make sure it doesn’t affect the loan program or APR

Definition of Business Day: means all calendar days except Sundays and legal public holidays: New Year’s Day, MLK Jr Day, President’s Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving and Christmas

For More Information: http://www.consumerfinance.gov/regulatory-implementation/


http://www.consumerfinance.gov/regulatory-implementation/

http://www.consumerfinance.gov/regulatory-implementation/


TRID Loan Estimate


TRID CLOSING DISCLOSURE

THANK YOU!

Kenneth TravisNMLS# 233918

PHONE: 903-331-0892EMAIL: [email protected]


trid t ila r espa i ntegrated d isclosure | equal housing lender | nmls 130562 | 4121 gilmer rd,...

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