TRID says that when you issue a document like a Loan Estimate, or a revised Loan Estimate, or a closing Disclosure, or a revised Closing Disclosure, the information that’s contained within has to be based on the best information available. That’s the good faith standard.
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.
What happens when you forget a fee on the Loan Estimate and it’s added to the Closing Disclosure, but it is in an Unlimited Tolerance Category?
If you miss disclosing the fee on the Loan Estimate, you will be in violation of the good faith standard. The Commentary to §1026.19(e)(3)(iii) #3 states that this type of error would move the fee to zero tolerance.
Join us for the TRID From A-Z. We will answer all the questions submitted during the live webinar, in writing.
It may be hard to believe that you have been issuing Loan Estimates and Closing Disclosures for over two years now! It’s a little ironic that just as you were probably getting pretty comfortable with the requirement, we now have upcoming changes! If you review or audit TRID-covered loans, you will need to understand how and why some of these changes could wreak havoc on your systems. What should you be looking for on revised Loan Estimates to make sure the disclosure is made in good faith? How do you treat tolerances when no Shopping List is provided? Find out the answers to these questions and much more at our Audit TRID training webinar on April 19, 2018.
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.