liability, cures corrections - chase correspondent lending · or (g) of section 1641 of this title,...

This document is for general informational purposes and does not contain or convey legal advice. The information presented should not be used or relied upon in regard to

any particular facts or circumstances without first consulting legal counsel. Any questions pertaining to this information should be directed to your legal counsel. Chase reserves the right to decline any loan that does not meet requirements.

TRID: Liability, Cures and CorrectionsSuzanne GarwoodMortgage Banking Assistant General Counsel



Agenda• Liability• Corrections and Cures• Frequently Asked Questions• Annotated Forms• Available Resources• Q&A• Appendix

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any particular facts or circumstances without first consulting legal counsel. Any questions pertaining to this information should be directed to your legal counsel. Chase reserves the right to decline any loan that does not meet requirements. 3



Liability• TILA violations give rise to civil, administrative and criminal claims

• Civil liability arises under Section 130 (15 USC 1640)» (a) Individual or class action for damages; amount of award; factors determining amount of award except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this part, [Part B] including any requirement under section 1635 of this title, subsection (f) or (g) of section 1641 of this title, or part D or E of this subchapter with respect to any person is liable to such person in an amount equal to the sum of—

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Liability, cont.• Civil liability arises under Section 130 (15 USC 1640)(1) any actual damage sustained by such person as a result of the failure; (2) (A) (i) in the case of an individual action twice the amount of any finance charge in connection with the transaction… (iv) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $400 or greater than $4,000; or (B) in the case of a class action, …not be more than the lesser of $1,000,000 or 1 per centum of the net worth of the creditor; (3) in the case of any successful action to enforce the foregoing liability or in any action in which a person is determined to have a right of rescission under section 1635 or 1638(e)(7) of this title, the costs of the action, together with a reasonable attorney’s fee as determined by the court; and

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Liability, cont.• Limitations on damages for Section 128 disclosures

» In connection with the disclosures referred to in section 1638 of this title, a creditor shall have a liability determined under paragraph (2) only for failing to comply with the requirements of section 1635 of this title, of paragraph (2) (insofar as it requires a disclosure of the “amount financed”), (3), (4), (5), (6), or (9) of section 1638(a) of this title, or section 1638(b)(2)(C)(ii) of this title, of subparagraphs (A), (B), (D), (F), or (J) of section 1638(e)(2) of this title (for purposes of paragraph (2) or (4) of section 1638(e) of this title), or paragraph (4)(C), (6), (7), or (8) of section 1638(e) of this title, or for failing to comply with disclosure requirements under State law for any term which the Bureau has determined to be substantially the same in meaning under section 1610(a)(2) of this title as any of the terms referred to in any of those paragraphs of section 1638(a) of this title or section 1638(b)(2)(C)(ii) of this title

• Statutory damages:» Available for Part B – Section 129 and certain Section 128» Not available for Part A

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Liability, cont.Authority Utilized Disclosure Actual Damages? Statutory Damages? Rescission?

Section 128(a)(1) Identity of creditor

Section 128(a)(2) Amount Financed

Section 128(a)(3) Finance Charge

Section 128(a)(4) APR

Section 128(a)(5) Total of Payments

Section 128(a)(6) Number, Amount and Due Date of Payments

Section 128(a)(8)Descriptive Terms (Amount Financed, Finance

Charge, etc.)

Section 128(a)(9) Security Interest

Section 128(a)(10) Late Payment

Section 128(a)(11) Prepayment

Section 128(a)(12) Refer to Contract

Section 128(a)(13) Assumption

Section 128(a)(15) Tax Implications

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Liability, cont.Authority Utilized Disclosure Actual Damages? Statutory Damages? Rescission?

Section 128(a)(16) Variable Rate Disclosures

Section 128(a)(17) Aggregate Costs

Section 128(a)(18) LO Compensation

Section 128(a)(19) Total Interest Paid

Section 128(b)(2) Timing

Section 128(b)(2)(C)(ii) Interest Rate Adjustments

Section 128(b)(4) Escrow

Section 129Various (includes Lender

NMLS, Escrow, Assumption, Liability Upon Foreclosure)

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Corrections and Cures

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Corrections and Cures• What’s the difference between a correction and a cure?

Correction

• Protects a creditor or assignee from litigation, but the loan still contains an underlying error of law

Cure

• Eliminates the underlying violation of law

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Corrections and Cures• How do I know whether I’m curing or correcting? TRID contains:

•Restitution for tolerance violations•Non‐numeric clerical errors2 Cures

•Section 130(b) permits creditors and assignees to correct numeric errorsNote: Bona fide error defenses are NOT corrections (or cures)

1 Correction

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CuresIf amounts paid by the consumer exceed the amounts specified under paragraph (e)(3)(i) or (ii) of this section, the creditor complies with paragraph (e)(1)(i) of this

section if the creditor refunds the excess to the consumer no later than 60 days after consummation, and the

creditor complies with paragraph (f)(1)(i) of this section if the creditor delivers or places in the mail corrected

disclosures that reflect such refund no later than 60 days after consummation

Clerical Error

Restitution

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A creditor does not violate paragraph (f)(1)(i) of this section if the disclosures provided under paragraph (f)(1)(i) contain non‐numeric clerical errors, provided the creditor delivers or places in the mail corrected disclosures no later than 60 days after consummation.



Correction

Section 130(b)

A creditor or assignee has no liability under this section or section 1607 of this title or section 1611 of this title for any

failure to comply with any requirement imposed under this part or part E, if within sixty days after discovering an error, whether pursuant to a final written examination report or notice issued under section 1607(e)(1) of this title or through the creditor’s or assignee’s own procedures, and prior to the institution of an action under this section or the receipt of written notice of the error from the obligor, the creditor or assignee notifies the

person concerned of the error and makes whatever adjustments in the appropriate account are necessary to assure that the person will not be required to pay an amount in excess of the charge actually disclosed, or the dollar equivalent of the annual

percentage rate actually disclosed, whichever is lower.

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Frequently Asked Questions

• Do you owe the consumer restitution for a tolerance violation?• Do you have a non‐numerical clerical error?

How do I know when to cure an error via a post consummation CD?

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• Do you have a numeric error?• Does the numeric error carry statutory or actual damages?• Can you provide restitution such that the consumer does not pay an “amount” greater than what was disclosed on the final CD signed at closing?

How do I know when to correct an error?

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• If during the 30‐day period following consummation, an event in connection with the settlement of the transaction occurs that causes the disclosures required under paragraph (f)(1)(i) of this section to become inaccurate, and such inaccuracy results in a change to an amount actually paid by the consumer from that amount disclosed under paragraph (f)(1)(i) of this section, the creditor shall deliver or place in the mail corrected disclosures not later than 30 days after receiving information sufficient to establish that such event has occurred.

Is this a correction or a cure?

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Annotated Forms• Loan Estimate:

» http://files.consumerfinance.gov/f/documents/201605_cfpb_loan‐estimate‐with‐truth‐in‐lending‐act‐disclosure‐citations.pdf

• Closing Disclosure:» http://files.consumerfinance.gov/f/documents/201605_cfpb_closing‐disclosure‐with‐truth‐in‐lending‐act‐disclosure‐citations.pdf

• Review forms along with the preamble• Print out sample forms to identify all areas with potential risk and how to cure

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Available Resources

Resource Location

Online Guide ChaseLoanManager > View Guides > Compliance‐Related Topics Section

TRID FAQs Chaseb2b.com > News Section

TRID Webinars ChaseLoanManager > Resource Center > Doing Business with Chase Topic

Chase Customer Support (877) 275‐2427 (ASK‐CHASE), Option 7, then Option [email protected]

Operations Relationship Team (877) 275‐2427 (ASK‐CHASE), Option 7, then Option 2

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any particular facts or circumstances without first consulting legal counsel. Any questions pertaining to this information should be directed to your legal counsel. Chase reserves the right to decline any loan that does not meet requirements. 19



Appendix

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Closing Disclosure Fixed Rate Sample

http://files.consumerfinance.gov/f/201403_cfpb_closing‐disclosure_cover‐H25B.pdf

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Closing Disclosure Refinance Sample

http://files.consumerfinance.gov/f/201403_cfpb_closing‐disclosure_cover‐H25E.pdf

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For real estate and lending professionals only and not for distribution to consumers. This document is not an advertisement for consumer credit as defined in 12 CFR 1026.2(a)(2). All home lending products are subject to credit and property approval.Rates, program terms and conditions are subject to change without notice. Not all products are available in all states or for all dollar amounts. Other restrictions and limitations apply. Correspondents should provide customers with clear and balanced product descriptions. 071816 Final ©2016 JPMorgan Chase & Co.

liability, cures corrections - chase correspondent lending · or (g) of section 1641 of this title,...

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