TRID UpdateSeptember 2017

Legal Disclaimer

The opinions expressed in this presentation are intended for informational purposes, and are not formal opinions of, nor binding on, the Federal Reserve Bank of St. Louis or the Board of Governors of the Federal Reserve System.

A Quick Look BackTRID effective date: 10/3/2015# of days since TRID implementation:

718What else has happened in the last 718 days?• Donald Trump becomes US President• Dow Jones: 16,472.37 to 21,813. 67• Brexit• Michael Phelps becomes most decorated Olympian of

all time• Chicago Cubs win World Series

What have we learned about TRID?

• It’s not impossible?

• It’s “hyper” technical?

• Consumers like it? Hate it?

• Software systems aren’t perfect?

• Loans are still closing?

• The sky has not fallen!

Frequent Errors

• Missing file #

Frequent Errors (continued)

• Unchecked boxes and “blank” spaces

Frequent Errors (continued)

• Full contact information

Loan Estimate:

Frequent Errors (continued)

• Full contact information

Closing Disclosure:

Frequent Errors (continued)

• Using the short form for Purchase transactions

– Short form is designed for refinance transactions

– Can also be used for simultaneous second mortgages on purchase transactions

– All other purchase transactions must be disclosed on the long form (LE and CD)

– Must be consistent. If used long form for LE, must use long form for CD.

Frequent Errors (continued)

• APR errors (finance charges)

– The definition of a prepaid finance charge has not changed.

– New software? Check to make sure defaults are correct for finance charges.

– Best practice? Set up templates or defaults for all fees to properly capture whether to include in finance charge.

Frequent Errors (continued)

• Cash to close table errors

Loan Estimate:

Frequent Errors (continued)

• Cash to close errors

Closing Disclosure:Must match last disclosed LE

Frequent Errors (continued)• ARM loan payment tables

Frequent Errors (continued)

• Documenting receipt of Closing Disclosure 3 business days prior to closing. – Date of issue is not sufficient to prove receipt by

borrower.

– Signature page is to indicate RECEIPT. If signed and dated date of closing, indicates that borrower received it day of closing.

– Best practice: Signed CD dated 3 business days prior to closing or separate acknowledgement form.

What’s new with TRID?

• Updated Rule issued on 7/7/2017

• Mandatory Implementation on 10/1/2018

• What is NOT addressed in the revision?

– Any major policy decisions

– Simultaneous issuance title insurance premiums

– Additional cure provisions

What’s new with TRID? (continued)

• Notable Changes: – Tolerance for total of payments is clarified to parallel

existing tolerances for finance charge.– Cooperative units are subject to TRID regardless of

whether treated as real property by state law.– Disclosure sharing with various parties to transaction.– Adjustments to partial exemption for housing finance

agencies and nonprofits.• Transfer taxes are an allowable fee• Transfer taxes and recording fees are excluded from the 1% fee

threshold for exemption from TRID• If qualify for partial exemption under Reg X, then can issue either a

TILA disclosure or a LE and CD.

What’s new with TRID? (continued)

• Other Clarifications and Technical Changes:– Affiliate charges

– Calculating cash to close

– Construction loans

– Decimal places and rounding

– Escrow account disclosures

– Expiration dates for closing costs disclosed on LE

– Gift funds

– In 5 years calculation

– Lender and Seller credits

What’s new with TRID? (continued)

• Other Clarifications and Technical Changes:– Lenders’ and settlement agents’ responsibilities

– List of service providers

– Non-obligor consumers

– Partial payment policy disclosures

– Payment ranges on the projected payments table

– Payoffs and payments table

– Payoffs with a purchase loan

– Post-consummation fees

What’s new with TRID? (continued)

• Other Clarifications and Technical Changes– Principal reduction (curtailment)– Disclosure and good faith determination of property

taxes and property value– Rate locks– Recording fees– Simultaneous second lien loans– Summaries of transactions table– TIP calculation– Trusts– Information updates to LE

Resources

• CFPB: Compliance Guides https://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/tila-respa-disclosure-rule/

• CFPB: Update to TRID Rulehttps://www.consumerfinance.gov/policy-compliance/rulemaking/final-rules/amendments-federal-mortgage-disclosure-requirements-under-truth-lending-act-regulation-z/

Questions?