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Do the provisions of the Rule apply to second mortgages?

There is no exception for a mortgage merely because of its priority. Such a mortgage may, however, qualify for an exemption for other reasons. For example, a Home Equity Line of Credit (HELOC), which is often secured by a second mortgage, is not covered since it is an “open-end credit” transaction. It would not be covered even if it was a first mortgage since the TRID Rule only governs “closed-end credit” transactions. (“Closed-end credit means consumer credit other than ‘open-end credit’” 12 CFR 1026.2(a)(10))

Do the regulations in the Rule affect the three-day right of rescission on refinances or do the borrowers get three days prior to signing plus three days after?

The three-day right of rescission for covered refinance transactions does not change with the new Rule. Therefore the consumer will have three business days prior to consummation to review the fees, terms and charges and at least three business days after consummation to exercise their right to rescind.

Do we count Saturday when applying the mail box rule if the bank is closed on Saturday?

Yes, except for those occasions when your Saturday is one of the four federal holidays which falls on a day which floats from year to year (New Year’s Day, Independence Day, Veterans Day, and Christmas Day). In that case Saturday is not counted, but the day on which the holiday might be observed is counted even though government offices and banks are closed and regular mail service is suspended.

Other than the exception for federal holidays, it makes no difference if the bank is closed on Saturday as far as counting the days related to receipt of the Closing Disclosure including the mail box rule.

How do I handle the situation if the consumer states that they never received the Closing Disclosure (CD)?

Simply call the lender and tell them the consumer states that they did not receive the CD in advance and then inquire if the lender would like you to proceed. Remember, if the lender used the “mail-box method” of delivery (either mailing or emailing the CD seven days in advance), there is a presumption in the Rule that the consumer received the CD without requiring proof of receipt. Therefore, it is entirely possible that the lender met its obligation but the CD got lost in the mail/email. “Receipt” then is defined by the Rule and does not necessarily mean that the consumer actually received the CD!

How much of a change to the APR is allowable without triggering a new three-day review period?

Depending on the type of loan it is either 1/4 or 1/8 of a percent. Some lenders will err on the side of caution and use the 1/8 of a percent change on all loans no matter what loan product is used in the transaction.

In unofficial guidance, CFPB Director Richard Cordray has stated that the CFPB will only be concerned about changes that increase the APR by the stated limits. Despite this guidance, lenders may remain cautious and require a new three-day review period for decreases in APR as well.

How will a reverse mortgage be reflected as loan amounts, interest rates and life of borrower are uncertain?

Reverse mortgages are not subject to the new TILA-RESPA Integrated Disclosure rules. Those loans will continue to be governed by Good Faith Estimates, HUD-1 settlement statements, and Truth in Lending disclosures. Read More »

I thought that the whole process was that NOTHING changed after the delivery of the Closing Disclosure.

You are thinking of the original proposal by the CFPB in the draft of the Rule. Because of the American Land Title Association’s massive effort (along with the help of a number of our related industry professionals) to convince the CFPB that delaying closing for minor changes would cause chaos and harm both buyer and seller, the final Rule states that under only three circumstances will the three-day review period be re-triggered. The three instances where a new review period is required are:

If the annual percentage rate (APR) becomes inaccurate,
If the loan product is changed, or
If a pre-payment penalty is added.

Know also that other last minute changes may cause a lender to have to re-submit the file for additional underwriter review or for a new appraisal. This too would delay a closing though it would not be related to any TRID-Rule violation.

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