TRID Q&A

Watch the video clip below to see a portion of the TRID webinar Q & A.

About a month ago, we finished up our three-part webinar series on TRID. “TRID from A to Z” is one of our most popular training series and it is available now OnDemand. We cover a wide variety of topics such as:

  • How to Complete the Loan Estimate & Closing Disclosure
  • Shopping Requirements & Restrictions
  • Changed Circumstances
  • Revising Loan Estimates & Closing Disclosures
  • TRID for Construction Loans
  • Fees & Charges – What, Where, When, Why & How

As with all of our webinars, our goal is to answer your questions and we provide a certain amount of time for you to ask your questions. You can also pre-submit questions to be answered during the webinar. Not only do our experts answer your questions live but we also put them writing for you refer to later on.

See all TRID Resources!

Video Transcript

Diane Dean:

Okay. On this first one, we’ll go back to page 253. If we have issued the closing disclosure and subsequently find out we need to extend a rate lock for whatever reason, are we required to re-issue the closing disclosure each time we extend a rate lock?

Jerrod Moyer:

So if the rate lock is being extended, just trying to think this through, what’s all affected by that? If there’s no fee for extending the rate lock and the closing date … See, this is where … If you’re extending the rate lock, I’m going to assume that you’re not closing on the same date, which means the closing date, the disbursement date, all that stuff’s going to have to be updated. So if you’re extending the rate lock, I’m assuming the closing date’s changing, which means yes, you need to re-disclose. If for some reason you issued a closing disclosure and the closing date’s going to remain the same, you’re just extending the rate lock for some reason, and it doesn’t affect anything else, then I suppose there’s a way you wouldn’t have to, but traditionally, we would see it affecting other things like the closing date and require a revised version.

Diane Dean:

Okay, this next one is the one we also addressed last week and decided to come back to it with the closing disclosure, again, this week.

Jerrod Moyer:

Yep.

Diane Dean:

We have a situation where the loan amount was increased on a closing disclosure after the appraisal came in higher than expected. The upfront mortgage fee increased slightly and was cured to the customer on the closing disclosure. Should the loan amount have been increased on a loan estimate instead of a closing disclosure, or did we handle this okay?

Jerrod Moyer:

Well, there’s a couple of different things I want to address in this. So let’s first address. If we have a change circumstance before the closing disclosure is set to go out, but we’re ready to issue the closing disclosure, do we have to issue a loan estimate first? And the answer, we believe, is no. There’s some bit of miss direction in the rule because it says one thing here and another thing there relative to the loan estimate, but we believe that when they updated TRID 2.0, they meant to indicate that change circumstances could be identified and taken care of with a closing disclosure without having to go back and re-issue a loan estimate and then a closing disclosure tomorrow.

Jerrod Moyer:

So I don’t think you have to go back and re-issue a loan estimate. It can be just done straight with a closing disclosure. Now they mentioned doing a tolerance cure because of the increase in the loan amount and the appraisal and what it came in at, and long story short, as long as you reissued a, or issued a closing disclosure within three days of learning of the change circumstance, which is the loan amount increasing, right? Or no, it was the appraisal coming in, right?

Diane Dean:

Yeah. The appraisal came in, which resulted in the loan amount increasing.

Jerrod Moyer:

Okay. So the appraisal came in, there’s your new information. So something happened with the loan amount. That’s a result of the change circumstance and mortgage insurance change because of that. Since mortgage insurance is directly related to the change circumstance, as long as you get a new disclosure out, either a revised loan estimate or a new closing disclosure within three days, and you put this new updated mortgage insurance number on there, you wouldn’t have a tolerance cure to do. So if anything, it sounds to me like you may not have had to do a tolerance cure, but maybe you didn’t get it done within three days, and then there would be a tolerance cure. So did I answer all the question?

Diane Dean:

I believe so.

Jerrod Moyer:

I took us in a lot of different directions there. I just want to make sure I got back to the core question.

Diane Dean:

Okay, this next one takes us back to the end of last week, and the beginning of this weeks. Do we need to document how a closing disclosure is provided or can it be assumed to be delivered by mail?

Jerrod Moyer:

That that’s the way our team rolls is that unless the loan file documentation says something different, okay? The loan closing disclosure’s set up such that there’s an issue date, and unless the loan file says it’s anything else, we’re going to assume that it was issued by mail. Okay? So day one, day two, day three. Now it’s in their hand. And three days after that is the soonest we can close. We would only ever question things if the timeframe between the issue date and the closing date was less than a week. Then what we would do is, “Okay, where’s the information in the loan file that says it was received earlier than that?” As long as that timeframe is a week, not counting holidays, there’s no reason for us to question or even concern ourselves with how it was issued, when it was issued, things like that, because there’s the date issued. And if it’s seven days later, assuming there’s no holidays, we’re good to go.

Published
2020/12/17

TRID Series OnDemand

About a month ago, we finished up our three-part webinar series on TRID.  “TRID from A to Z” is one of our most popular training series and it is available now OnDemand.  We cover a wide variety of topics such as:

  • How to Complete the Loan Estimate & Closing Disclosure
  • Shopping Requirements & Restrictions
  • Changed Circumstances
  • Revising Loan Estimates & Closing Disclosures
  • TRID for Construction Loans
  • Fees & Charges – What, Where, When, Why & How

As with all of our webinars, our goal is to answer your questions and we provide a certain amount of time for you to ask your questions.  You can also pre-submit questions to be answered during the webinar.  Not only do our experts answer your questions live but we also put them writing for you refer to later on.

Watch the video clip below to see a portion of the TRID webinar Q & A.

See the full TRID Training Library here – https://store.bankerscompliance.com/#?keyword=TRID&type=

Published
2020/12/14

Learn TRID from A to Z

Be sure to JOIN US for our three-part webinar series, “TRID A-Z”.  These sessions will occur on November 5th, November 12th and November 19th

The CFPB has updated their TRID FAQs a couple of times in 2020 and one area of clarification involved disclosing fees that are “absorbed” versus “offset”.  For example, if you’re not going to charge for something, such as a credit report, the fee doesn’t need to be disclosed on the Loan Estimate. It does, however, still need to be on the Closing Disclosure. The rules are a little different; however, when you “offset” costs.

Click on the video to listen to Jerod explain more.

Are you absorbing costs or are you offsetting costs? And the topic is TRID. And the answer to that question is going to be very important for how things get disclosed on your loan estimate and your closing disclosure.

Here is some feedback we’ve received on “TRID A-Z”:

This webinar was absolutely what I was hoping it would be.  I have a couple new employees to the department and this webinar gave some of the basic information they needed to hear.  Jerod covered a lot of information in great detail. It was delivered in a manner that our new employees could understand.  Thank you!  I feel like this is one of the best webinar’s we have attended. 

            It’s very helpful to have the information presented in terms we can understand.

Need More FREE Lending Tools? Check them out here – https://store.bankerscompliance.com/link/LendingFD

Published
2020/11/04

Have you found the time to keep up with the CFPB’s TRID FAQs?

We know you’ve had a LOT going on this year! 

Have you found the time to keep up with the CFPB’s TRID FAQs? The CFPB has updated them a couple of times in 2020, addressing things such as signatures lines, as well as, differences in disclosing costs that are “absorbed” versus “offset”. For example, if you’re not going to charge for something, such as a credit report, the fee doesn’t need to be disclosed on the Loan Estimate. It does, however, still need to be on the Closing Disclosure. The rules are also a little different when you “offset” costs. This is an important distinction that the updated FAQs clarified. 

Find our Full Library of TRID Training here – https://store.bankerscompliance.com/#?keyword=TRID&type=

Published
2020/10/30

Transcript

Are you absorbing costs or are you offsetting costs? And the topic is TRID. And the answer to that question is going to be very important for how things get disclosed on your loan estimate and your closing disclosure.

Hi, there. This is Jared Moyer with Bankers Compliance Consulting, and I think most training sessions that I do, especially the live ones, this is a topic that comes up. No cost and partial no-cost loans, as well as, eh, we’re just going to eat this charge or waive this charge. Well, the CFPB, through their frequently asked questions, address this. Now, the regulation addresses it, but not as black and white as the FAQs do. So what we’re going to do is we’re going to look at these costs in two different buckets. We’re going to talk about costs that are offset, and that would be your no-cost and partial no-cost loan products. And the other bucket that we’re going to look at is absorbed costs. In fact, we’re going to start there.

So if your bank is just absorbing the cost, in other words, maybe you don’t charge for credit reports or you negotiate, the borrower won’t have to pay for this fee or that fee, that’s an absorbed cost. And how that’s handled on the loan estimate is you can either disclose it and do a lender credit to offset it, or you can simply leave it off. That’s the interpretation as relates to absorbed costs on the loan estimate. The closing disclosure though, is a different story. When we’re talking about absorbed costs on the closing disclosure, those all have to be listed. You can’t just leave it off the closing disclosure. So you’ll have to list it, and then the fee will actually show up in the ‘paid by others’ column. So that’s how you handle absorbed costs, loan estimate to closing disclosure.

Now, offset costs. Those would be your no-cost and partial no-cost loan products. This is one where we get the biggest amount of pushback on this issue. And these Q and A’s, to me, put the issue to rest. What the Q and A’s state is that if you’re doing no-cost or partial no-cost loans, those fees for that product all have to be transparent and listed on your loan estimate, as well as the closing disclosure. The lender credit also has to be fully listed on your loan estimate, as well as the closing disclosure. Now, the concern from the banking industry is that if I list a credit on my loan estimate, let’s just say that the fees add up to be $3,000 and you’re doing a no-cost product. Well, then the lender credit should be equal to the loan cost for it to be no cost. So if there’s 3000 in fees, the credit should be $3,000.

The fear though is, because of the way the rules are written, when we get to the actual charges on the closing disclosure, let’s pretend they come in at $2,500. So they came in $500 less than what we estimated on the loan estimate. You might be thinking, well, that’s good for my borrower. It’s even better for your borrower because not only do the fees go down from 3,000 to 2,500, they also still get the full $3,000 credit that you originally disclosed on the loan estimate, assuming there was no changed circumstance. I guess it comes with that assumption. In which case, in addition to not having to pay the fees, which went down, they also get an extra $500 because you can’t lower that credit unless it’s related to a legitimate changed circumstance.

So the games that have been played have been where we manipulate the numbers a little bit. And you can’t do that. You got to be fully transparent with the fees, fully transparent with the lender credit, and if it’s no-cost, it should wash to zero on the loan estimate. When you get to the closing disclosure, if those fees go down, that lender credit remains the same. You cannot reduce that. That would be a tolerance violation because the lender credit is a 0% tolerance.

I know this is a heavy issue, but it’s one we cover in detail in a lot of our trainings. If you’re looking for more information, I encourage you to check out our training library; we have a lot of different solutions out there. Or simply pick up the phone and give us a call. We’d love to partner with you and help you out with your TRID compliance needs. Thanks.

TRID’s Five-Year Assessment

TRID Training made easy with BCC

If you caught the October issue of Banking on BCC, it pointed out that we’ve been trying to meet the challenges of the TRID Rule for over five years now!  This also meant, it was time for the CFPB to assess the rule’s effectiveness and report back on what it found.  Those findings were recently released and will, at least in part, help the CFPB determine if any changes are warranted. 

While some evidence is “mixed”, findings were generally consistent that the TRIDRule improved consumers’ abilities to…understand their mortgages.  While the CFPB was unable to do a cost-benefit analysis, Director Kraninger acknowledged “sizeable implementation costs”, while stating that ongoing costs are less clear. 

Different groups and commenters chimed in on confusion surrounding the different definitions of “business day” that are used within the rule, as well as confusion over the 10% tolerance, liability after foreclosure, the Calculating Cash to Close table, as well as, other concerns.

Be sure to check out our November issue of Banking on BCC for more, including a look at some of the TRID violations noted by the CFPB.  Also, if you need TRID training, we have a lot of different webinar options so check out our store.

Ready for a sample of our magazine? Chat or email us at consultants@bankerscompliance.com.

Published
2020/10/12