TRID: Payoffs and Payments Table Reminder

As you are probably well aware, the TRID rule give two separate versions for both the Loan Estimate and Closing Disclosure.  One format, sometimes referred to as the “primary” version, is required to be used whenever a seller is involved in the transaction.  It’s important to note, however, the regulation does allow this version to be used for any TRID transaction, regardless of whether a seller is involved.  The other format, sometimes referred to as the “alternate” version, can be used in a transaction where a seller is not involved. 

Remember, you can’t switch formats mid-transaction.  In other words, if you issue a Loan Estimate on the “primary” (i.e., with a seller) form, you must use that same format for the Closing Disclosure.  You cannot change and issue a Closing Disclosure on the “alternate” (i.e., no seller) form. 

Keep in mind, your investor(s) may have additional rules on when you can or need to use the “primary” vs. “alternate” versions.  You will, of course, need to play by those rules as well.   

It seems that most institutions prefer using the alternate forms whenever possible.  In doing so, when you get to the Closing Disclosure, the Payoffs and Payments table takes the place of the transaction summaries found on the primary version.  This table is generally used to itemize payments made to third parties, either from the loan amount or other funds provided by the consumer (or on behalf of the consumer).  Each entry in the table should include:

  • The payee;
  • A description for the purpose of the payment; and,
  • The amount (in the separate column).

We commonly see instances where the payee or a description of the purpose is missing.  For example, if you’re paying off a different loan, the institution may be listed, but there is no further description of the purpose, such as to pay off a loan.  Similarly, information may be given for a loan being paid off, such as “Loan #12345” but no indication of where the funds are actually going (i.e., the payee). 

Granted, this is a technical requirement and nothing to lose sleep over.  However, it’s also something that is commonly overlooked but fairly easy to fix.

Ready to learn more about TRID?  Be sure to JOIN US for our three-part webinar series, “TRID From A – Z”. 


Documenting Changes on TRID Applications

During our September Monthly Connection, we revisited the documentation requirements that come into play when changes occur on a TRID-covered application.  While documentation is a key component of compliance in general, it is actually something that’s written into the TRID rule.

Diane explains more in the video.


TRID Guidelines: What is MDIA?

TRID guidelines: We get a LOT of searches on our website for information regarding MDIA. It always catches us off guard because MDIA really isn’t a “thing” anymore. MDIA stands for the Mortgage Disclosure Improvement Act and it went into effect on July 30, 2009.  In short, it brought us the seven-business day wait to close and the requirement to re-disclose an inaccurate APR at least three business days prior to closing for consumer, closed-end, dwelling-secured loans. These changes caused quite a stir at that time.

Fast forward to 2013 and the issuance of a Final Rule for the Integrated Mortgage Disclosures (TRID) under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z), which took effect on October 3, 2015.  These rules completely changed the disclosure requirements for consumer-purpose, closed-end loan applications secured by real property (aka dirt).

What some may not realize is that both of the requirements created by MDIA were written into the existing TRID guidelines. Thus, MDIA is really a moot issue at this point.  Here is a blog we put out a few years back, that explains this in more detail.

Want to learn more about the TRID requirements?  If so, we have a wide variety of webinars available now OnDemand.  From TRID Construction Loans, TRID for Beginners, Auditing TRID and TRID Changed Circumstances, we’ve got you covered. Also, be sure to check out our three-part webinar series, “TRID From A – Z”, beginning on November 2nd!


TRID Loan Purpose & Construction Loans

TRID 2.0 construction loans: So, you’re doing a construction loan.  That means the loan purpose you disclose on the TRID disclosure is “construction”, right?  While that seems quite logical, it’s not always the case.  Even for what you consider to be a construction loan, you still have to work through the TRID loan purpose hierarchy.  You must first determine that it’s not a purchase and not a refinance before you get to construction.

Jerod says more about TRID Construction in the video.

Find TRID resources below!


Construction Loans & TRID

You may recall that the TRID rules and construction loans didn’t necessarily get off on the right foot with each other.  And, we still see that construction loans seem to be extra challenging for financial institutions. One such challenge is when you have a construction or permanent loan (one closing) where you will not have an escrow account in connection with that initial construction phase, but will set up an escrow account in connection with the permanent financing. 

How do you complete the disclosures on page four of the Closing Disclosure?

Diane explains more about TRID & construction loans in the video.