Effective August 1st, 2015
TRID
TILA RESPA INTEGRATED DISCLOSURE
Kenneth Travis
NMLS #233918
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
Loan Estimate (LE)
This form will combine and replace three disclosures:
•GFE-Good Faith Estimate
•TIL-Truth in Lending
•Right to Receive Copy of Appraisal
The LE must be disclosed in good faith, containing terms and costs
that are as close to the actual terms and costs as reasonable
available to the loan officer.
The LE must be disclosed to the consumer within three business
days of receipt of a completed loan application
e.g. Three business days from receipt of the 6 items that make an application. Aka
“SPINAL”
1. Consumer’s Name
4. Social Security Number to obtain Credit
2. Consumer’s Income
5. Estimated Value of Property
3. Mortgage Loan Amount
6. Property Address
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
Closing Disclosure(CD)
This form will combine and replace the
HUD-1 and Final TIL:
The CD must contain actual terms and
costs for the transaction. The CD must
be received by the borrower three days
prior to consummation.
Why replace the old disclosures with the
new ones? These disclosures have been
created by the Consumer Financial
Protection Bureau (CFPB) as a way to
improve the borrower’s understanding
of their closing costs, making it easier for
borrowers to comparison shop and,
ultimately, to protect the consumer
experience.
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
TRID New vs. Old Initial Disclosures
Current Process
•Lender must provide the
borrower an initial Good Faith
Estimate (GFE) and Truth in
Lending Disclosures (TIL) when the
borrower has provided the lender
with the required information in
connection with the lender’s
prequalification or full application
review
•“Cash to close” estimate is not
included on the GFE and TIL
disclosures.
•Borrowers see settlement services
fees listed in random order on the
GFE.
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
What’s Changing
•Lender must provide the
borrower a Loan Estimate (LE)
when a borrower identifies a
specific property and all other
loan application requirements
have been met
•The LE includes a “Cash to Close”
estimate.
•Borrowers must see settlement
service fees listed alphabetically
under different sub-categories on
the LE and the Closing Disclosure
(CD).
TRID New vs. Old Initial Disclosures
Current Process
• The GFE and TIL disclose taxes,
insurance and other costs only if
those items will be escrowed
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
What’s Changing
•The new Loan Estimate (LE) and
Closing Disclosures (CD) require
disclosure of estimated taxes,
insurance and other items to
borrowers, even if those items will
not be escrowed.
•CD will disclose all seller related
fees as well. Any payoffs the seller
is making and Realtor commissions
are listed as well.
TRID New vs. Old Changed Circumstances
Current Process
• Certain changed
circumstances and borrower
requested changes can trigger
either a revised GFE that must
be provided to the borrower
within three general business
days after receiving notice of
the changed circumstances
• For fees subject to the 10%
tolerance, re-disclosure of the
GFE is required with three
business days of a changed
circumstance regardless of
whether the 10% threshold is
reached.
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
What’s Changing
•Certain changed circumstances and
borrower requested changes can trigger
either a revised Loan Estimate (LE) or
Closing Disclosure (CD), depending on
where the borrower is in the
application/loan closing process.
Redisclosure must be within three business
days
•For fees subject to the 10% tolerance, redisclosure of the LE or CD will not be
required until the aggregate total of
changes reaches 10% (unless the change
is prompted by a borrower request)
Caveat: a revised CD cannot be used for
tolerance purposes. i.e. One cannot use
a CD for a CIC.
TRID New vs. Old Closing Disclosures
Current Process
• The settlement agent is
responsible for preparing the
final HUD-1.
• The final HUD-1 contains all
borrower and seller details on a
single document
• The borrower may request to
review the final HUD-1 one
business day before closing
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
What’s Changing
•Lender (subjective) will be responsible for
properly completing the Closing Disclosure
(CD), including any revisions.
•On financed home purchase transactions, a
borrower and/or seller can request separate
versions of the CD. The details of the Seller’s
portion of the transaction can be disclosed on
a separate CD and will not be included in the
borrower’s CD. *At this time we are not allowing
modified CD’s unless state law requires the
separate forms
•Borrower must receive the CD at least three
business days prior to consummation (signing),
giving them more time to compare their CD
with their LE.
TRID New vs. Old Closing Disclosures cont.
Current Process
•The TIL may be re-disclosed, and
loans cannot close until at least
three precise business days have
elapsed from the borrower’s
receipt of any subsequent TIL
disclosures
•A new TIL must be sent to the
borrower if the APR increases or
decreases more than 0.125% for
fixed rate products (0.25% for ARM
products). Also, a new TIL
disclosure may also be required in
a number of other instances, even
if the APR has not changed
beyond the maximum threshold.
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
What’s Changing
•Once a Closing Disclosure (CD) is issued, no
additional Loan Estimates (LE) can be provided
to a borrower. If changes occur, those
changes must be disclosed on a revised CD,
where permitted under the Rule. Tolerance
Caveat
•Among the re-disclosure requirements are the
following which invoke an additional three
business day waiting period:
–
–
If the APR INCREASES by more than
0.125% for fixed rate products (0.25% for
ARM products).
The loan product has changed (e.g.
fixed rate has changed to an adjustable
rate, 15 year to 30 year, or loan program
changes)
TRID New vs. Old Closing Disclosures cont.
Current Process
• Certain fees that a borrower
cannot shop for, such as an
appraisal fee, have a 10%
tolerance.
What’s Changing
•Certain fees that a borrower
cannot shop for, such as appraisal
fees, now have a zero percent
tolerance.
Note: Refer to the CFPB website for a
list of fees that cannot increase from
what was originally disclosed on the
Loan Estimate (unless there is a valid
changed circumstance or borrower
requested change).
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
What Realtors Need to Know about TRID
1.
You will need to be able to explain the new disclosures
2.
The party providing the closing disclosure will be different. Most lenders will
provide the final Closing Disclosure (CD). Escrow will no longer be responsible
for providing this to the borrower.
3.
Timing of closing will be based on the CD delivery: Borrowers will be given
three business days to review the CD prior to consummation (signing). The
three days starts when the borrower RECEIVES the form, not when the lender
sends it. As a result, unless confirmation of receipt is received by the lender,
the wait period will be seven business days.
4.
Disclosures will be more frequent and in greater numbers
Note: If there are changes after the closing disclosure is delivered that do not
affect APR or loan product there is no additional wait period. The revised CD
can be given at consummation.
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
What should you ask a mortgage advisor like me?
Loan Estimate (LE)
• Listing Agent: Has the borrower
given their intent to proceed? If
not, they have not selected
their lender. They have ten days
to express their intent.
• Selling Agent: Confirm that the
borrower has expressed their
intent to proceed and provided
their credit card information to
order the appraisal. Credit card
information can only be
accepted by the lender AFTER
intent to proceed has been
given.
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
Closing Disclosure (CD)
• Listing Agent: Make sure
Escrow/Lender has all of your fees
including commissions. Make
sure the borrower received the
Closing Disclosure at least three
business days before signing.
• Selling Agent: Make sure
Escrow/Lender has all of your fees
including commissions. Make
sure the borrower received the
CD at least three business days
before signing and has
acknowledged receipt of the CD.
TRID: Exempt Transactions
These exempt transactions will use the old Good Faith Estimate
(GFE), Truth in Lending (TILA) and HUD-1:
•Home Equity Lines of Credit
•Reverse Mortgages
•Mobile Homes
•Business, Organization, Agricultural and Commercial Loans
•Property such as house boats…
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
What Realtors Need to Know about TRID
After the Closing Disclosure is issued, try not to
change anything. IF you do change something
notify Escrow/Lender IMMEDIATELY. If client wants
to change something make sure it doesn’t affect
the loan program or APR
Definition of Business Day: means all calendar
days except Sundays and legal public holidays:
New Year’s Day, MLK Jr Day, President’s Day,
Memorial Day, Independence Day, Labor Day,
Columbus Day, Veterans Day, Thanksgiving and
Christmas
For More Information:
http://www.consumerfinance.gov/regulatoryimplementation/
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604
What Realtors Need to Know about TRID
TRID Loan Estimate
What Realtors Need to Know about TRID
TRID CLOSING DISCLOSURE
THANK YOU!
Kenneth Travis
NMLS# 233918
PHONE: 903-331-0892
EMAIL: [email protected]
| Equal Housing Lender | NMLS 130562 | 4121 Gilmer Rd, Suite 200 Longview, TX 75604