trid regulations presentation by h & h settlement

INTEGRATED MORTGAGE DISCLOSURE RULE

H&H Settlement Services, LLC105 E. Glenside Ave, Glenside, PA 19038

215-989-4959

New Terms

• CFPB – Consumer Financial Protection Bureau• TRID – TILA RESPA Integrated Disclosure• LE – Loan Estimate• CD(F) – Closing Disclosure (Form)• Buyer – Consumer• Closing – Consummation

LiabilityDodd-Frank gave power to CFPB to enforce rules and

levy penalties

– CFPB enforcement of consumer financial laws (incl. TILA and RESPA)

– $5,000 per day per violation; $25,000 per day for reckless violations; $1M per day for knowing violations

Scope and DateMajority of closed-end mortgages except:

Reverse mortgages HELOC Mobile homes Commercial loans Creditors making five or fewer loans per year Certain no-interest Subordinate special purpose loans

Most provisions apply to applications received by lender or mortgage broker on and after 10/3/15

Reliance on the Real Estate Professionals Lenders only have 3 days to issue Loan Estimate

Creditor may rely on third parties to obtain information for Loan Estimate: “For example, the creditor might look to ….Realtors for taxes and escrow fees.”

Transfer taxes Seller creditsHome warranties Personal property purchasesHO Association feesHome Owner’s InsuranceFlood Insurance

Change of Circumstance1. Information provided by consumer inaccurate2. Extraordinary event

3. Discovery of new info specific to consumer or transaction

4. Revision requested by consumer5. On day of locking rate6. After 10-day expiration

3-Day Review Period of Closing Disclosure (CD)

Three business days* in advance of consummation** with limited re-

disclosure requirements.

*business day for CD purposes: all days except Sunday and 10 Federal holidays

**consummation is defined as “the time that a consumer becomes contractually obligated on a credit transaction”

Major Lenders’ Decisions

1. Why did they make the decision?2. How will this new process work?3. What about the day of closing changes?

They will face staffing issues for day-of-closing changes:• Volume• 24/7• Consumer Experience

Delivery of Closing Disclosure Defined

Hand delivery: immediate (deliver on Monday, close on Thursday)

US Mail: assumed receipt three days after placed in mail

Email: with receipt confirmed by consumer after approval to use email method of delivery (if not, assumed three days to open email)

Overnight Delivery: with consumer confirmed receipt

Delivery Examples

Or emailw/o receipt

Or emailwith receipt

Re-disclosure Requirements

Requiring additional three-day review period1. Inaccurate APR (1/8% or ¼% depending on loan product)

2. Change in loan product3. Prepayment penalty added

Owner’s Title Insurance Modifier

• Requires inclusion of the word “Optional” after Owner’s Title Insurance on Loan Estimate and Closing Disclosure

• Consumer has no protection under the lender’s policy.

• Understand the importance of Owner’s Title

Seller Closing Disclosure

Seller provided Closing Disclosure by settlement agent, escrow company, attorney agent at consummation.

Nothing prohibits settlement agent, escrow company, attorney agent from creating a separate form for seller purposes only

The CLOSING DISCLOSURE(CD)

Closing Disclosure

FormPage 1

©2015 ORNTIC

Closing Disclosure

FormPage 2

©2015 ORNTIC

Closing Disclosure

FormPage 3

Similar to HUD1Page 1 w/o line #s

©2015 ORNTIC

18

Closing Disclosure Page 4

© 2015 ORNTIC

19

Closing Disclosure Page 5

© 2015 ORNTIC

ALTA Settlement StatEment

SELLER-ONLY CLOSING DISCLOSURE

Bifurcation Benefits

• Allows agent to control preparation of the seller’s side

• Allows agent to make changes at the table for seller-only adjustments

• Protects NPPI of the consumer and seller

What can we do today• Create a system to communicate changes or

additional fees• Create a system to deliver invoices 8-10 days

prior to closing• Talk to your buyers about responding to

lender requests immediately• Talk to your staff about responding to lender

requests immediately

THANK YOU!