We want you to mark your calendars!

On January 31st we will start our journey on the Mortgage Life Cycle and we would love to have you join us.  This is one of our most popular training events and you don’t want to miss out.  This 5-part webinar series will walk you through the life cycle of a mortgage loan from before you receive an application to long after you close the loan.  That’s 10 hours of compliance training in our signature Plain English style AND you get a 750+ page reference manual!

 

If you’ve seen or attended the Mortgage Life Cycle in the past, you may notice it’s now five sessions instead of four.  Why?  There were a lot of regulatory changes in 2018 and you are going to want to make sure you are on top of all of them.

 

Listen below and let Jerod tell you more….

 

Register Today!

 

Published
2018/12/11
Jerod Moyer

TRID “Good Faith” Effect 2.0

Confused about the “Good Faith” Effect?

This tool puts it in Plain English.

 

Register to get your free tool now!

Download Tool Here

 

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.

 

Register to get your free tool now!

Download Tool Here

 

Published
2018/12/06
Jerod Moyer

Credit Reports & Legitimate Business Purpose

The Fair Credit Reporting Act says a financial institution can obtain a credit report in connection with any legitimate business purpose.  That could be related to a deposit account, a loan, etc.  Seems simple enough, right?  Well we’ve experienced some pretty creative twists when it comes to “legitimate business purpose” over the years.  Here are a few of our favorites:

 

  1. A bank president thought it would be okay to have his secretary order a credit report on his neighbor (not even a bank customer). When we asked the president about this, his response was that he was just curious what was going on with the neighbors.

 

  1. A loan officer thought it would be okay to order a credit report on someone they were dating.

 

  1. A bank officer thought it would be okay to order a credit report on his/her children who were away at college.

 

Hopefully, it’s clear to you that none of these examples represent a legitimate business purpose of any kind.  At least not in when it comes to banking.  Shockingly, we have seen #2 and #3, very often over the years.  Just because you can pull a credit report, doesn’t necessarily mean you have the right to do so.  A person’s credit report is a big deal.  You just have to look at the volume of consumer complaints regarding credit reports over the last couple of years to see it’s an important issue.

 

Proper training for is the first step.  Make sure your people know what is allowed and what is not when it comes to pulling credit reports.  But, don’t stop there.  You should develop procedures, implement controls to help mitigate risk and do periodic monitoring to ensure everyone is doing what they are supposed to be doing (or not doing, in this case).

 

See all our training at store.bankerscompliance.com.

 

Published
2018/12/06
Jerod Moyer

Thank You

Published
2018/10/15
Jerod Moyer

TRID 10% Tolerance Bucket

 

Let’s talk TRID 2.0 and the 10% tolerance bucket.  TRID 2.0 brings some changes to how we look at tolerances relative to shopping, and the 10% bucket. The 10% bucket is made up of third-party services, required by the lender, where we simply give the applicant the opportunity to shop. The other thing that falls into the 10% bucket is going to be government recording charges. They are not as big as a concern to us today. We’re going to concentrate on that opportunity to shop.

 

The way TRID has gone along since day one is if you didn’t disclose a fee, or you didn’t comply with the shopping requirements (the list and so forth), those fees will become a general 0% tolerance.  Not a good thing for bankers if you made a mistake.

 

However, TRID 2.0 is going to change the game, and somewhat in our favor, as bankers. Here’s how it works. Let’s talk about the shopping list. If you failed to provide a shopping list, or maybe you failed to list a service on the shopping list, or maybe it wasn’t specific, the original TRID rule would say 0% tolerance, generally speaking, for that service in connection with the transaction.  However, TRID 2.0 says, “Maybe you made a mistake with this shopping list,” failed to provide it, didn’t list a provider, wasn’t specific to the transaction, that’s not going to automatically indicate that you have a 0% tolerance. In fact, as long as you can demonstrate that you gave the applicant the opportunity to shop for the provider, you’re going to be able to put that fee into your 10% bucket.

 

It does come with a consequence. You’re still going to be in violation for either not providing the list, not making it specific to the transaction, or not putting a provider on there in compliance with the shopping list elements. But you do get some grace, in that it’s not an automatic 0% tolerance. It’s going to fall into the 10% bucket. Again, that’s a win for the banking industry, in my opinion.

 

The other part of this is going to be the Loan Estimate side of it.  Loan Estimate section C is going to be for the third-party services required by the lender where you give them the opportunity to shop. The idea is, you list it in this area here and you also provide them with a shopping list that gives somebody specific to the transaction. If you failed to list someone in section C, under the current rule, what would happen is it becomes a 0% tolerance.  That’s not the case under TRID 2.0. What TRID 2.0 says is If you leave something off in section C, as long as you can give and demonstrate that the borrower was provided the opportunity to shop, that’s going to land into the 10% bucket.  Now, it does also come with consequences.

 

First off, you’re going to be in violation for not completing the Loan Estimate section C correctly. Second, even though it falls into the 10% bucket, provided you can demonstrate that the borrower was given the opportunity to shop, (and you’ll have to document that somehow), you’re already going to be off by whatever the fee was that you failed to list. Let’s just say it’s $100 survey that you were going to put in section C and give them the opportunity to shop and you didn’t do that, but you were able to demonstrate that they were ultimately given the opportunity to shop through documentation, a loan file or whatnot.  You’re going to be off that $100 survey right out of the gates. Keep that in mind. There are still consequences. There are going to be violations for not completing certain elements correctly, although your grace is going to be a little better as far as the tolerance goes. We get this 10% Tolerance.

 

This is just one of the many things that TRID 2.0 brings to the table. There are also other elements in TRID. If you’re looking for more information on this, or maybe something else TRID related (not necessarily TRID 2.0), we’re excited to bring you our three-part TRID A to Z webinar series. Each segment is going to be two hours long. It kicks off on November 1st of this year and it’ll be three consecutive weeks of TRID, where we’ll take it from A to Z.

 

Get registered today – https://store.bankerscompliance.com/link/TRIDSeries11-18