Fund News and Alerts

The lender may not charge anything at the time of loan application except a reasonable fee to pay for a credit report. After delivery of the Loan Estimate and after the consumer gives an indication that he/she wants to proceed with the loan, the lender may charge additional fees and require the additional information needed to underwrite the loan.

12/18/2015

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))

12/18/2015

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.

12/18/2015

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:

1. If the annual percentage rate (APR) becomes inaccurate,
2. If the loan product is changed, or
3. 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.

12/18/2015

The rule is quite clear on this so here it is:

Consumer's waiver of waiting period before consummation. If the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency, the consumer may modify or waive the three-business-day waiting period… after receiving the (Closing Disclosure). To modify or waive the waiting period, the consumer shall give the creditor a dated written statement that describes the emergency, specifically modifies or waives the waiting period, and bears the signature of all consumers who are primarily liable on the legal obligation. Printed forms for this purpose are prohibited. See 12 CFR 1026.19(f)(10)(iv).

 

It is important to remember that the definition of “consumer” under the Rule is limited to the borrower, as a consumer of credit. The seller is not considered a consumer under the Rule.

As a practical matter, lenders are unlikely to accept a waiver for a variety of reasons including instructions from the investor lined up to purchase the loan from the lender.

12/18/2015

As long as the “primary” purpose of the mortgage on the residential property is NOT for “personal, family or household purposes,” it does not fall under the provisions of TRID.

12/18/2015

The CD is the disclosure document required to be delivered prior to closing, not the entire closing package. Therefore you are going to have to do what you have always done: stay in close communication with the lender in order to get everything you need when you need it.

12/18/2015

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!

12/18/2015

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.

12/18/2015

Most consumer mortgage loan closings are covered. Exceptions include reverse mortgages, open-ended loans such as HELOCS, loans for business, commercial, or agricultural purposes, and loans made to other than natural persons. Let me state the obvious: cash deals are not covered by TRID. The Closing Disclosure is only required and designed to be used for transactions which include a mortgage. Commercial transactions are exempt from its required use if the mortgage loan is "primarily" for business, commercial or agricultural purposes. Although there is no prohibition from using the Closing Disclosure for cash and commercial transactions, you may use any form you wish for those transactions including the custom settlement statements found in DoubleTime^®, the new ALTA designed forms, or the original two-page HUD-1(1974 version).

12/15/2015