TRID “Good Faith” Effect 2.0
Confused about the “Good Faith” Effect?
This tool puts it in Plain English.
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As you are probably well aware, TRID 2.0 blew up the changed circumstance world when it comes to revised Loan Estimates and Closing Disclosures. Are you struggling with the “Good Faith” Effect it created that took effect on October 1st? If so, we want to help!
TRID 2.0 requires that any revised disclosure (used to reset tolerances and/or for informational purposes) you provide…must be based on the best information reasonably available to you at the time it is provided. For example, say you issue a revised disclosure to reflect a higher loan amount. If there are other charges, unrelated to the loan amount increase, that have also changed, they must be reflected on the revised disclosure. However, the changes in the other charges, unrelated to the loan amount change, may not be used to determine either the 0% or 10% tolerance.
We’ve created a tool that will help guide you through and understand this difficult concept. Check out the video as Jerod Moyer explains this in more detail and walks you through the tool step by step.
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Completing the Loan Estimate
The CFPB issued a Final Rule in July 2017 that updated TRID with some substantive changes in areas where specific implementation challenges were identified. The Final Rule formally implements CFPB guidance on topics such as shopping, good faith, calculating cash to close, construction loans, seller credits, disclosing property taxes and property value, revised loan estimates and much more.
Although mandatory compliance date is October 1, 2018, you can and may want to begin implementing some of the changes now. Other changes will need to wait until your software is updated.
Be sure to join us for our “TRID: Completing the Loan Estimate” webinar on January 18, 2018. We will walk you through the Loan Estimate line-by-line and will give you the information you need to know about the Final Rule changes in plain English!
While you’re at it you can also register for our “TRID: Completing the Closing Disclosure” webinar on January 25, 2018. Again, we will walk you through the Closing Disclosure line-by-line and will include applicable information from the Final Rule.
The OCC, FDIC and CFPB have announced that they don’t intend to require HMDA Data resubmission or assess civil money penalties for 2018 HMDA data (reported in 2019), unless errors are material. We have not seen a similar announcement from the FRB. The CFPB has also stated they will reconsider institutional and transactional coverage tests and certain data requirements.
So, while not a total “get out of jail free card”, HMDA banks are apparently being offered some relief as we navigate through the new requirements. As long as you’ve prepared appropriately, you should have a comfort level that any fine-tuning to your procedures and processes can be done without the risk of resubmission or civil money penalties. Exams of the 2018 data “will be diagnostic to help institutions identify compliance weaknesses and will credit good faith compliance efforts.” That should be a relief!
There may be other changes coming to the Rule, as the Bureau intends to look at the lending activity that makes institutions subject to HMDA, as well as the types of transactions and data required to be reported. Of course, we’ll keep you updated with where that goes, but for now, it’s almost time to flip the switch on the 2018 Rule changes!
What’s the Newest TRID Final Rule All About?
A July 2017 Final Rule updated the TRID rules with some substantive changes in many areas where implementation challenges were identified. The 560-page rule formally implements CFPB guidance on topics such as shopping, good faith, calculating cash to close, construction loans, seller credits, disclosing property taxes and property value, revised disclosures, and much more. In addition to these clarifications, another proposal was introduced for further amendments. This Final Rule is not something you want to overlook!
The Final Rule has a mandatory compliance date of October 1, 2018; however, many of the changes you can begin implementing right away. Do you have it all figured out? Rest assured we have all the information for you, in plain English! Join us for our TRID Update-The 2017 Final Rule Webinar on November 2, 2017.
You can also learn more about tila-respa integrated disclosures rule, including additional TRID training information.