Information Center

TRID rules apply to the loan given to the borrower; not the purchase by the buyer. If the LLC was obtaining the loan the transaction would qualify for the exemption provided for “extensions of credit to other than a natural person.” If the LLC was buying the residence for rental purposes it would likely qualify for the other § 1026.3(a) exemption for “an extension of credit primarily for a business, commercial or agricultural purpose.”

Remember also that there is no prohibition on using the Closing Disclosure for exempt transactions. Ultimately it is the lender who makes the decision as to forms usage.

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If the time share purchase includes a mortgage transaction which is considered to be a Covered Loan the new rules apply. However, the transaction is specifically exempted from having to comply with the three business day before closing rule related to delivery of the Closing Disclosure. Read More »

There is no TRID provision which specifically prohibits the early signing of loan documents. However, many lenders have reportedly refused to allow early signings. This resistance is likely related to the TRID requirement that the Closing Disclosure be delivered three business days before “consummation.” Since consummation is determined by state law, lenders have apparently concluded that an early signing is tantamount to consummation in some states. As such, an early signing would violate the three day rule if the Closing Disclosure was merely delivered three business days before the scheduled closing date.

When a mail away is anticipated, working with the lender in advance of setting the closing date will likely solve the problem. As long as the first Closing Disclosure is delivered early enough, signing ahead of time should not be a problem. It may take some effort though since many processors may not understand the reasoning behind a seemingly hard and fast internal rule not to allow early signings.

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Yes. The lender can require the borrower to use a lender-selected provider. (This is not new under TRID. It was also the case for the GFE/HUD, though it rarely occurred.)

The lender can choose the provider; the lender can give the borrower a list of at least two providers and restrict the borrower’s choice to that list; or the lender can give the provider a list of at least one provider and allow the borrower to choose from the list or find a provider on their own (“shop”). 

Even when the borrower chooses someone, the lender can still deny use of that provider when the provider is not on the lender’s internal approved list.  (E.g. settlement agent has no access to Closing Insight or other collaboration portal as required by the lender; has failed to meet the lender’s “Best Practices” requirements, etc.)

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Realtors generally request signed HUD-1 closing statements for their files. Associations sometimes request them as well. Sharing the borrower’s CD with third parties, however, should be limited to those situations where you have both lender and borrower permission.

Unlike the HUD-1, the CD is created by the lender and the lender has ownership rights to it. For that reason, their approval is needed. In addition, since the CD contains far more Non-public Personal Information (NPI), caution should be exercised and borrower approval obtained before sharing it with others.

A better solution is to provide the seller’s CD which you will prepare. In the rare event the borrower has paid for all or part of the real estate brokerage services, get permission and provide the borrower CD; or provide your own combined settlement statement which only reflects settlement charges.

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TRID requires settlement agents to provide “the disclosures in 12 CFR § 1026.38 that relate to the seller’s transaction reflecting the actual terms of the seller’s transaction” (12 CFR § 1026.19(f)(4)(i)). “The settlement agent complies…by providing a copy of the Closing Disclosure provided to the consumer, if it also contains the information under § 1026.38 relating to the seller's transaction, or alternatively providing the disclosures under § 1026.38(t)(5)(v) or (vi), as applicable.” (Comment 19(f)(4)(i)-1.)

Providing a HUD-1, ALTA Settlement Statement, or some other “easy” form does not satisfy these TRID requirements. The easiest way to comply is to complete and provide promulgated Form H-25(I) Mortgage Loan Transaction Closing Disclosure - Modification to Closing Disclosure for Disclosure Provided to Seller - Model Form. In the alternative, you have two other options pursuant to the rules outlined above. With the lender’s permission, you can provide the seller with the same form provided to the borrower as long as it includes all the seller information including the specific charges for services and products for which the seller is responsible. Or you can provide a modified or redacted version of the same form after removing all information related to the borrower and lender by following the guidance provided by § 1026.38(t)(v).

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Generally speaking, yes. TRID rules apply to an assumption provided the following three elements are present: 1) it is a residential mortgage; 2) the creditor expresses their acceptance of the new consumer; and 3) there is a written agreement (See 12 CFR 1026.20(b) and associated commentary).

Noteworthy is that the approval of creditworthiness, notification of change of records, mailing of a new coupon book, and acceptance of payments from the new consumer do not in and of themselves constitute the express agreement to accept the new consumer as required.

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