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May 13, 2023 •283 likes •498 views

TILA-RESPA Integrated Disclosure (TRID) Rule a.k.a. Know Before You Owe with New Haven Middlesex Association of REALTORS July 16, 2015 Jeremy Potter, General Counsel and Chief Compliance Officer, Norcom Mortgage 1 What Well Cover:

  1. TILA-RESPA Integrated Disclosure (TRID) Rule a.k.a. Know Before You Owe with New Haven Middlesex Association of REALTORS July 16, 2015 Jeremy Potter, General Counsel and Chief Compliance Officer, Norcom Mortgage 1

  2. What We’ll Cover: • Basics: Why We’re Here • Final Rule • The New Forms • Evaluating the Rule • Challenges for banks and its attorneys • Questions 2

  4. CFPB Authority in our Industry Alternative Mortgage • Home Ownership and Equity • Transaction Parity Act Protection Act of 1994 Consumer Leasing Act of • Real Estate Settlement • 1976 Procedures Act of 1974 Electronic Fund Transfer Act* • S.A.F.E. Mortgage Licensing • Equal Credit Opportunity Act • Act of 2008 Fair Credit Billing Act • Truth in Lending Act • Fair Credit Reporting Act* • Truth in Savings Act Home Owners Protection Act • • of 1998 Omnibus Appropriations Act • Fair Debt Collection Practices • of 2009* Act Interstate Land Sales Full • Federal Deposit Insurance • Disclosure Act Act* Mortgage Reform and Anti- Gramm-Leach-Bliley Act* • • Predatory Lending Act* Home Mortgage Disclosure • Act of 1975 *Indicates that portions of this Act transferred to the CFPB 4 while other portions did not.

  5. Basics: • Applicable Loans o Final rule applies to most consumer mortgages, EXCEPT: • Home-equity lines of credit • Reverse mortgages • Mortgages secured by a mobile home or dwelling not attached to land • No-interest second mortgage made for down payment assistance, energy efficiency or foreclosure avoidance • Lenders who make 5 or fewer loans in a year • Consumer instead of Borrower • Creditor instead of Lender • Variances reference changes to fees • Tolerances reference the thresholds on fees 5

  6. The New Forms: • Loan Estimate • Closing Disclosure o o 3 pages long 5 pages long • Combines early two-page TIL • Combines three-page HUD-1 and three-page GFE and final two-page TIL o o Who provides? Who provides? • Two options: lender or • Two options: lender or mortgage broker combination of lender and settlement agent o When? o When? • Within three days of • Three days before closing application • Exceptions o Still subject to tolerances 6

  7. LOAN ESTIMATE • The New Forms Must Be Used with Respect to Any Applications Received for a Covered Transaction on or after October 3, 2015 • No change for the following: o Cannot Impose Lender Fees ( except for credit report) before consumer Receives LE and indicates Intent to Proceed o Cannot Require Submission of Verification Documents prior to issuing the LE • You Cannot Use New Forms Before Effective Date 7

  8. LOAN ESTIMATE – Timing • Must Be Provided Within Three (3) Business Days (open for substantially all business) of Receiving an Application o Delivered o Or Placed in Mail • That Delivery Date (or Date Placed in Mail) Must Also Be no Later Than Seventh (7 th ) Business Date Before Consummation • Trigger Date is Date When “Application” Received o By Creditor o Or by Mortgage Broker 8

  9. LOAN ESTIMATE - • Loan Estimate Must be Completed in “Good Faith” o Based on Actual Information if Known • Must Use “Good Faith” and Exercise “Due Diligence” to Try to Obtain Information o Estimate Must be Based on “Best Information Reasonably Available” • Using Good Faith • Due Diligence • CFPB has not addressed the scope of due diligence o You Can Rely on Third Parties for Information • Including Consumer 9

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  13. Consumer Shopping • A creditor permits a borrower to shop for third party settlement services when they: o Inform borrowers on Loan Estimate o Provide them with a written list of settlement service providers • The creditor may still impose reasonable qualifications for providers. o Example: • Provider must be licensed – Impact on closed list • Creditor is not indemnifying “the list” 13

  14. Summary of when new LE is possible The exceptions include situations when: 1) The consumer asks for a change; 2) The consumer chooses a service provider that was not identified by the creditor; 3) Information provided at application was inaccurate or becomes inaccurate; or 4) The LE expires. When an exception applies, the creditor generally must provide an updated LE form within 3 business days. 14

  15. Closing Disclosure (CD) • Required form used by lenders • Three business days before closing • Provided by: o Lender o Lender may rely on Settlement Agent, but Lender remains responsible for accuracy • Contents covered by § 1026.38 15

  16. Closing Disclosure Page 1 § 1026.38(a)-(d) (a) General Information (b) Loan Terms (c) Projected Payments (d) Costs at Closing 16

  17. Closing Disclosure Page 5 § 1026.38(o)-(q) (o) Loan Calculations (p) Other Disclosures (q) Questions Notice 17

  18. Closing Disclosure Page Five (cont.) § 1026.38(r)-(s) (r) Contact Information (Sale ) (r) Contact information (Refinance) Contact information for: Contact information for: 1. Lender 1. Lender 2. Mortgage Broker 2. Mortgage Broker 3. Real Estate Broker (B) 3. Settlement Agent 4. Real Estate Broker (S) 5. Settlement Agent (s) Signature Statement 18

  19. Sale – Closing Date Delivery By Hand: SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 1 2 3 4 5 6 7 Hand Disclosure Day 1 Delivery = Receipt 8 9 10 11 12 13 14 Sunday Disclosure Disclosure doesn't count Day 2 Day 3 - OK to close Delivery By Mail: SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 1 2 3 4 5 6 7 Mail Day 1 Mail Day 2 Closing Mail Day 3 = Disclosure Receipt Day 1 Disclosure MAILED 8 9 10 11 12 13 14 Sunday Disclosure Disclosure doesn't count Day 2 Day 3 - OK to close 19

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