TRID Q & AThis Document will be updated and some Q & A’s are Subject to Change, as new information on TRID comes in. The most recent Q&As are at the bottom. Please keep checking back for details

What is the fuss all about? Some of you may think this is merely a new disclosure rule and our doc vendor will ensure our docs are correct. Other than making sure the borrower has RECEIVED the closing disclosure 3 days in advance of closing, what’s the big deal? This new regulation is a big deal folks. For example:1. Fees are being reclassified based on whether the borrower was allowed to shop for the service or not.

For fees the borrower cannot shop for, these fees are now 0% tolerance items on the Loan Estimate (LE). These are what we currently refer to as Box 3 fees and will now include:

a. Appraisal feeb. Final inspection feec. Credit report feed. Mortgage insurance (we MUST get this correct from day #1)-no more “adjustments”

without a valid COCe. Flood determinationf. Tax service fee

Loan Scenarios challenges using this new requirement: Scenario 1: We quote monthly MI at a .95 factor at time of loan application and fail to specify the borrower is self-employed when obtaining the quote. At time of underwriting, the quote is revised to 1.10. The initial 1003 reflects self-employed. The MI CANNOT be increased with a revised LE. No “new” information was obtained. Whether the loan can proceed or not will be based on the specifics of the loan and/or how a cure would be calculated/provided at closing.

Bottom line message: We MUST get the MI quote correct on the initial LE. Scenario 2: We quote $360.00 for the appraisal fee due to the fact the borrower tells us their house is 3,000 square feet. The appraiser tells us it is actually 5,000 square feet and an additional $100 fee will apply for a total of $460.00. We must provide the borrower with a revised LE within 3 days of being informed of the increase from the appraiser (and the file is documented) or Fidelity will have to absorb the entire $100 fee. No 10% cushion will exist to mitigate losses for an appraisal fee.

2. Fees that the borrower can shop for (i.e. attorney/settlement provider) will have 2 basic categories:

a. Use our vendor: the fee is subject to 10% variance*

*Added complication to 10% fee variances: the loan estimate cannot be revised unless the cumulative charge exceeds 10%. What exactly does this mean? b. Use their own vendor: the fee is not subject to variances.

Loan Scenario challenges using this new requirement: The borrower chooses one of our approved attorneys at time of loan application and the transaction is a Fidelity-to-Fidelity refinance:

Scenario 1: Borrower requests an increase in the loan amount and transfer taxes increase by 5%. This would NOT trigger re-disclosure of the LE. Assuming this is the only change and the LO tries to be efficient and provides a revised LE to the borrower within 3 days based on the new transfer tax figure,

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TRID Q & Athat new fee cannot be used for the final Closing Disclosure (CD) calculation as we have done in the past. The initial fee has to be used since the 10% variance was not exceeded. Bottom line: We can no longer rely upon the last issued LE to compare against the CD! Scenario 2: We receive the title work back and discover the co-borrower had been added to title recently and the loan no longer qualifies for the intangible tax exemption. The intangible tax represents a 15% increase in title fees. Re-disclosure of the LE is required within 3 days of receipt of that title (and must be documented). The new increased fee is then used in preparing the CD. If we fail to re-disclose within the 3-day window, the differential that exceeds 10% will have to be absorbed by Fidelity.

LE/CD timing: Further, if we determine we need to issue a revised LE for any of the reasons noted above, the borrower must acknowledge receipt of that revised LE before a CD can be issued. That could add an additional 24 hours before a CD can even be issued, FYI. Once the CD is issued, a LE cannot be revised. The new regulation does allow for minor revisions to the CD without triggering a new 3 day waiting period, but this should be a rare occurrence.

As we all know by now, one of the most significant changes associated with TRID is the fact that all borrowers must RECEIVE the closing disclosure 3 days in advance of closing. Why do we keep stating “RECEIVED” in bold type when talking about the CD? Because 3 days can easily turn into 6 days due to lack of communication with the borrower! If we do not have proof of receipt by way of a signature on the CD, the law requires us to apply the “mail box” rule which means 3 days is now 6 days prior to closing.Below are three key sentences from page 64 of the CFPBs Small Entity Guide with clarifying notations added in red:

1. “If the Closing Disclosure is provided in person, it is considered received by the consumer on the day it is provided.” Note: this is self-explanatory-provide it in person and get a signature 3 days in advance of closing. 2. “If it is mailed or delivered electronically, the consumer is considered to have received the Closing Disclosure three business days after it is delivered or placed in the mail.” (§ 1026.19(f)(1)(iii); Comment 19(f)(1)(ii)-2) Note: The borrower must receive the CD 3 days in advance of closing. If we mail the disclosure OR merely email the disclosure the rule requires us to account for 3 days for it to arrive AND THEN the borrower must have it in their possession for 3 days. In essence, 3 days just became 6 days!3. “However, if the creditor has evidence that the consumer received the Closing Disclosure earlier than three business days after it is mailed or delivered, it may rely on that evidence and consider it to be received on that date.” (Comments 19(f)(1)(iii)-1 and -2) Note: The good news-this means we can accept a CD that has been electronically signed.

Timing Examples:

Scenario A: The CD is provided in person and signed, or delivered by courier with a signed receipt, or has been signed electronically by Tuesday April 14th, the earliest the loan can close is Friday April 17th.

Scenario B: The CD is placed in the mail or emailed to the borrower (i.e. e-disclosed) on Tuesday April 14 th but the borrower does not electronically sign the CD until Wednesday April 15th, the earliest the loan can close is Monday April 20th

Scenario C: The CD is placed in the mail or emailed to the borrower (i.e. e-disclosed) on Tuesday April 14 th but the borrower fails to sign it electronically, the earliest the loan can close is Friday April 24th.

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TRID Q & AThe attached chart is an excellent example of how the timing will be applied. Communication and Technology will become even more critical with the implementation of TRID. If you have not yet embraced the E-sign technology provided by LQB/IDS now is the time to familiarize yourselves with the process and to encourage your borrowers to sign documents electronically in a timely fashion to avoid any unanticipated closing delays.

How does “GOOD FAITH” affect a transaction subject to TRID:The CFPB has added an additional layer of responsibility for the lender in regards to the issuance of the Loan Estimate (LE). The rule requires the LE to contain a GOOD FAITH estimate of closing costs and transaction terms. If any information is unknown at time of origination, the lender must disclose fees based on the BEST information reasonably available using due diligence prior to disclosing. How will this be measured by an examiner? An LE will be considered made in GOOD FAITH if there is no increase beyond allowable tolerances between the estimated charges on the LE and the actual charges paid by the consumer on the Closing Disclosure (CD). Technical errors, miscalculations or an underestimated charge is not an acceptable defense. If a fee increases but does NOT exceed an applicable tolerance, the original LE is deemed to be in GOOD FAITH and re-disclosure is NOT permitted. How do we produce a LE in GOOD FAITH having applied due diligence?1. Contracts with our vendors will be critical. Some of the initiatives we are working on include:

A. A flat fee for all credit reports regardless of the number of supplements required on a loan-level basisB. Re-validating our agreements with all appraisers regarding maximum fees allowedC. Work with our MI partners to develop a rate quote at time of application that will NOT be subject to

changeD. A vendor for HOI quotes and accurate property tax information

2. Obtain a rate quote directly from the attorney/title agent that will be closing the loan. Under TRID, we can no longer use a standard estimate of fees and the calculations for lenders and owners title insurance are complex.For example:

A. Lenders Title Policy-this fee will be disclosed in Section C: Services you can shop for (except on our CP product) and must be the full premium without any adjustment that might be made for the simultaneous purchase of an owner’s title insurance policy. This calculation applies to both the LE and the CD even if the borrower chooses to purchase an owner’s policy in addition. In other words, we are required to disclose a fee that may not be the actual fee the borrower will pay! B. Owners Title Policy-this fee will be disclosed in Section H: other and it must be listed as optional. To calculate the premium to be disclosed we must add the simultaneous issuance premium for the lender’s coverage to the owner’s title quote and then deduct the full lender’s coverage. Again, this calculation applies to both the LE and the CD even if the borrower chooses to purchase an owner’s policy in addition. In other words, we are required to disclose a fee that may not be the actual fee the borrower will pay!

An excellent source for settlement cost calculation in any state- One of the attorneys/title agents we currently use is a national vendor. On their website they have the ability to provide a quote anywhere in the country. For current loans, it gives a GFE line item and HUD line breakdown with their quote, which can assist with more accurate disclosures. This is also a great resource to use in states where we do not have an office and/or contacts (i.e.-Louisiana, Kentucky etc.)Here is the login info: http://strategicnationaltitle.com/resources/get-quote/ User Name: SNTFidelity Password: 4strategic!

TRID Follow Up: As a follow up to last week’s Regulation Publication, attached is a color-coded chart of the timing requirements under TRID. It is a little easier to follow.The “TIP” ---“Total Interest Payment”---on the LE (Loan Estimate) and/or CD (Closing Disclosure).

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TRID Q & A

TIP: Can you define it? Can you explain it? Why should a consumer care? TIP stands for Total Interest Payment and its disclosure becomes mandatory with all new loan applications received on or after August 1st, 2015. It is found on page 3 of the LE or on page 5 of the CD along with the APR. The CFB has done extensive consumer testing and they found that a consumer wants to know this information. You can get an idea of the CFPBs intent from the new section of the LE or CD where this can be found:

Make no mistake: a consumer will use these figures when shopping for a loan. Be sure you understand it and can explain it to a borrower! Training: Did you miss the sessions directed to loan originators regarding TRID and preparing our realtor/builder partners? At this time, we do not have another session planned, however, the PowerPoint can be found on the intranet:Mortgage-Compliance-CFPB Implementation-TRID Implementation Resources-TRID PowerPoint for Realtors.Builders

Disclosures: Did you know that the Loan Estimate (LE) and the closing disclosure (CD) are not the only new disclosures required for all new loan application taken on or after 8/1/15? As you know, TRID mandates changes with how fees are disclosed (in GOOD FAITH-refer to previous Reg Pubs for a definition). In conjunction with these changes, we must update our service providers disclosure and our attorney selection disclosures. They will be replaced with one new disclosure called, “Written List of Providers.” This disclosure will be broken down into 2 basic sections:

1. Services you cannot shop for (examples: PMI, MIP, credit report, appraisal fee, flood cert, tax service fee)2. Services you can shop for (examples: title fees, survey, termite inspection, flood insurance, hazard insurance)

Both sections of the disclosure will list the name of the service, and estimated fee, the provider we identify AND contact information. We must provide a minimum of one provider in each fee category.

Q: In a scenario where the lender’s estimate of closing costs changes, but the prior estimate remains in “good faith,” is the creditor prohibited from providing the borrower with a revised disclosure?A: No. However, the original disclosed fee that is still in “good faith” must be tracked and used for calculating tolerances on future revised Loan Estimates (if applicable) and the Closing Disclosure. For example, the borrower chooses an attorney identified by the lender and all title fees are subject to 10 percent tolerance as a result. The initial LE discloses Title fees of $400. It is determined there is a lien on the property and the additional cost to handle its release is $100 or a total of $500. This is a valid changed circumstance so long as there is proper documentation proving the increase was made within 3 days of the new information being provided (document, document, document). However, the new fee of $500 is only a 5% increase over the initial $400 disclosed and does not exceed the 10 percent tolerance maximum. The lender may provide an updated Loan Estimate HOWEVER, the revised title fee of $500 must be compared to the initial fee of $400 because the changed circumstance did not cause the sum to increase by more than 10 percent.

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TRID Q & A

Q: the current HUD has a comparison chart to show applicable tolerance levels as described above and how the charges compare. Where is the equivalent chart on the Closing Disclosure?A: It is not part of the Closing Disclosure. These fees must be tracked off sheet. Q: The new special information booklet required with new loan applications taken on or after 8/1/15 is called, “Your Home Loan Toolkit.” Is there a Spanish version and can a lender place their logo on the Toolkit cover?A: The CFPB is developing a Spanish-language version of the toolkit and hopes to have the available prior to 8/1/15. A lender can add their logo to the toolkit, so long as the title on the cover is not changed.

Q: Can a lender review detailed written documentation of income and assets prior to delivering a Loan Estimate?A: Yes. But, only if the information was voluntarily provided by the consumer. A lender cannot require this information before providing the required Loan Estimate.

Q: Can a lender still issue a pre-qualification letter?A: Yes. For example, if a borrower provides 5 of the 6 elements that define a loan application (i.e. no property address), and voluntarily provides income, assets, etc. a lender may provide a pre-qualification letter. However, if the consumer provides all 6 elements, than a Loan Estimate must be provided within 3 days of receipt.

Q: If there is a valid changed circumstance or a borrower requested change that triggers another third-party service that the lender permits the borrower to shop for, should the list of service providers be updated and re-disclosed?A: Yes. There are 3 options in this case:

1. Add the new service to the existing disclosure and provide an updated disclosure showing all services/fees the borrower can shop for

2. Provide a supplemental disclosure showing only the additional service/fee the borrower can shop for3. If don’t provide an updated list, the borrower was not given the opportunity to shop and

therefore the fee is subject to 0% tolerance

Q: Do we have the technology to help us comply with delivery of the CD under TRID?A: Yes. IDS already has full E-sign technology embedded into their systems. IDS is in the process of making changes to their system that will track the following information:

1. The date the CD was sent to the customer with E-sign. 2. If the borrower never picks up the email, IDS will queue the CD for delivery by US mail automatically 3. IDS will indicate the earliest date the transaction can close based on “worse case”-the CD being mailed to the borrower (6 business days)4. If and when the borrower completes their E-consent and downloads the CD for review, IDS will move up the earliest date of consummation based upon the date the CD was confirmed received by the consumer

Q: What if my customer does not have an email account and/or is not tech-savvy:

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TRID Q & AA: Once sent via e-disclosures, IDS will mail the CD for delivery by US mail. If the borrower wants to close sooner, they would need to make an appointment to come sign/date the CD in person or the CD could be federal expressed to prove receipt. Q: How will Fidelity estimate the closing date?A: Fidelity will follow the same IDS philosophy and will assume the CD will be sent via US Mail. The earliest closing date will be calculated 6 business days from issuance of the CD unless other evidence is provided.

Q: Why is the word “proposed” added to the postponed implementation date?A: The CFPB cannot finalize a rule without allowing a public commentary period. When the proposed postponement to October 1st was announced last week, the CFPB did not indicate what the commentary period would be. They announced just hours ago that the proposal was open for public comment until July 7 th. They also announced a revised postponement date of October 3rd, 2015, which is a Saturday.

Q: Why would the CFPB push back implementation to begin on a Saturday?A: From the announcement: “The CFPB is proposing a new effective date of Saturday, October 3. The Bureau believes that moving the effective date may benefit both industry and consumers with a smoother transition to the new rules. The Bureau further believes that scheduling the effective date on a Saturday may facilitate implementation by giving industry time over the weekend to launch new systems configurations and to test systems. A Saturday launch is also consistent with existing industry plans tied to the original effective date of Saturday, August 1”.

Q: Do we have the technology to help us comply with delivery of the CD under TRID?A: Yes. IDS already has full E-sign technology embedded into their systems. IDS is in the process of making changes to their system that will track the following information:

1. The date the CD was sent to the customer with E-sign. 2. If the borrower never picks up the email, IDS will queue the CD for delivery by US mail automatically 3. IDS will indicate the earliest date the transaction can close based on “worse case”-the CD being mailed to the borrower (6 business days)4. If and when the borrower completes their E-consent and downloads the CD for review, IDS will move up the earliest date of consummation based upon the date the CD was confirmed received by the consumer

Q: What if my customer does not have an email account and/or is not tech-savvy? : A: Once sent via e-disclosures, IDS will mail the CD for delivery by US mail. If the borrower wants to close sooner, they would need to make an appointment to come sign/date the CD in person or the CD could be federal expressed to prove receipt.

Q: How will Fidelity estimate the closing date? A: Fidelity will follow the same IDS philosophy and will assume the CD will be sent via US Mail. The earliest closing date will be calculated 6 business days from issuance of the CD unless other evidence is provided.

Q: If there are NO changes to the CD once it has been issued, is this the only CD the borrower will receive?

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TRID Q & AA: No. All loan files will have another CD provided at time of closing, whether changes were made or not, and ALL borrowers must sign and date the CD at that time. The sellers must sign and date their final CD at closing as well.

Q: Why are some lenders and investors indicating that the TRID implementation date is still 8/1/2015?A: The CFPB does not have the authority to change the implementation date without opening the proposal for consumer feedback. At this point in time, there is a proposal to delay the implementation date to 10/3/2015 (yes, it is a Saturday). The public comment period ends on July 7 th and we hope to see the postponement become final after that time.

Q: Will the consumer still receive the booklet called, “Shopping for Your Home Loan” on purchase transactions?A: No. Instead, they will receive a booklet called, “Your Home Loan Toolkit-A step-by-step guide,” which will contain most of the same information. A sample is attached

Q: If an applicant applies for an ARM loan, will they still receive a “Consumer Handbook of Adjustable Rate Mortgages” AKA the CHARM booklet at time of application? Will it still apply to both purchase and refinance transactions?A. Yes. And remember, if a loan should change from a fixed to an ARM, the CHARM booklet MUST be provided along with the COC and the ARM disclosure. Failure to supply both the CHARM booklet and the ARM disclosure will render your loan non-compliant.

Q: If there is a valid COC and a revised LE is issued to add a fee the consumer can shop for, is a revised Service Provider’s Disclosure required as well?A: It may. This is one of the issues we are still investigating. Stay tuned for more information in the coming weeks.

Q: How do variances differ under TRID in regards to the LE?A: Each fee on the LE will have its own baseline figure and the calculation will vary depending upon the allowed tolerance. Calculating these tolerances by fee could be rather complicated depending upon the type of fee and the number of COC/LEs issued on a loan. We are working with Mavent in developing a fee variance worksheet to assist us with tracking these changes.

Disclosing of fees: the LE compared to the CD and calculating cures under TRID: Q: What are the allowable tolerances under TRID?A: There are 3 basic categories of fees under TRID, similar to the current GFE rules with some very important differences:

Fees subject to 0 tolerance: these include all lender fees (origination, admin fee, etc.) as well as fees the consumer was not allowed to shop for (credit report, appraisal, upfront PMI, etc.).Fees subject to 10% tolerance in aggregate: these are required fees by the lender where the borrower was permitted to shop AND the consumer chose a Fidelity vendor (i.e. settlement agent)

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TRID Q & AFees not subject to any tolerance: these fees can vary at closing without a tolerance cure due. They include prepaids, HOI and required fees by the lender where the borrower was permitted to shop and the consumer DID NOT chose a Fidelity vendor (i.e. settlement agent)

Q: Are changed circumstances still allowed under TRID?A: Yes. The rules are unchanged for the most part. To issue a COC, there must be “new” information that just came to our attention or a rate lock request or a consumer requested change in order to issue a COC/revised LE. Just like RESPA (and the GFE), TRID mandates that any change must be done within 3 days of the information becoming available to the lender and we must maintain evidence in the loan file.

Q: Are the rules the same regarding how fees are compared from the initial disclosures (LE) to the final closing disclosure (CD)?A: No. The rules are very different. The best way to illustrate this is by 2 examples provided by the CFPB:

The lender discloses a $200 appraisal fee on the initial LE based on the consumer telling us the property is a SFH (and our appraisal order form states that). Appraiser goes to the property and discovers it is actually on a farm and the fee is now $400. So long as the COC/revised LE are issued to the borrower within 3 days of the appraiser informing us of the change, that fee increase can be passed on to the borrower. We would need an email from the appraiser to be retained in the loan file to prove the 3-day re-disclosure timing requirement. At closing, the revised fee of $400 is compared to the final fee of $400 and no tolerance cure is due. However, if the lender either failed to issue revised disclosures or failed to do so within 3 days, the final fee of $400 is compared to $200 on the initial LE and a $200 tolerance cure would be due to the borrower at closing. The lender discloses $400 for title fees on the initial LE. The borrower selected one of Fidelity’s attorneys and this fee is therefore subject to the 10% tolerance requirement. An unreleased lien is discovered and the attorney charges an additional $25 to release. A valid COC has occurred (new information) but the revised fee does not cause the aggregate of all fees subject to the 10% tolerance to exceed the threshold (the increase was only 6%). The lender is not prohibited from issuing a revised LE, however, the revised fee of $425.00 cannot be used for the final tolerance calculation because the initial fees are still in “good faith”-they did not exceed 10%. The final cost of $425 must be compared to the initial LE figure of $400 even if the last LE shows $425!

Q: Does this calculation apply to each individual fee on the LE?A: Yes. Each fee must be analyzed individually to determine the “baseline” figure to be used for the final CD. In other words, using the examples above, the “baseline” appraisal fee would be $400 from the revised LE in example #1 yet the “baseline” title fee would be $400 based on the initial LE in Example #2… NOT the revised LE figure of $425. Q: How is this going to be calculated? Will it take longer for my loan to close?A: The closing process will become more complicated, but we hope to automate these calculations to prevent any delay in issuing the CD 3 days in advance of closing. With the help of our vendors, we are developing a Fee Variance Worksheet to automate this TRID requirement.

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TRID Q & A

Disclosing of fees: the LE compared to the CD and calculating cures under TRID: Q: What are the allowable tolerances under TRID?A: There are 3 basic categories of fees under TRID, similar to the current GFE rules with some very important differences:

Fees subject to 0 tolerance: these include all lender fees (origination, admin fee, etc.) as well as fees the consumer was not allowed to shop for (credit report, appraisal, upfront PMI, etc.).Fees subject to 10% tolerance in aggregate: these are required fees by the lender where the borrower was permitted to shop AND the consumer chose a Fidelity vendor (i.e. settlement agent)Fees not subject to any tolerance: these fees can vary at closing without a tolerance cure due. They include prepaids, HOI and required fees by the lender where the borrower was permitted to shop and the consumer DID NOT chose a Fidelity vendor (i.e. settlement agent)

Q: What happens if the appraiser requires a roof inspection that costs $400 and I forget to put it on a revised LE? What if the borrower has already paid for this outside of closing?A: The fee would have to be listed on the CD and cured at closing. Q: But I thought a roof inspection was subject to 10% tolerance?A: The reason the full fee has to be cured at closing is that we did not provide an updated SSPL (Settlement Service Provider List) to the borrower and allowed them to “shop” around for the service. Failing to provide the SSPL means the borrower was not given the choice to shop at all, which then subjects that fee to 0% tolerance. Q: What happens if I have a very tricky loan scenario and the loan is delayed in underwriting. The borrower is moving from Buffalo and all of their belongings are in a moving van on its way south, they MUST close on Friday.. A consumer cannot control how long it takes to get a loan underwritten, why should they be penalized?A: The law does not account for “why” a loan is delayed. No matter the reason involved, no matter how inconvenient to a borrower, there is NO waiver opportunity under TRID. In order to close on Friday, the borrower must prove receipt of the CD no later than the Tuesday prior. Q: Follow up question: my borrowers are in the car and cannot access the internet to acknowledge receipt of the CD. What can I do?A: Again, the law does not account for this dilemma. If the borrower is unable to “receive” the CD by signing the document or providing their E-consent, the loan will have a 6-day hold (not 3!). Again, there is no waiver opportunity. In order to close on Friday, the borrower must prove receipt of the CD no later than the preceding Friday (6 days, not counting Sunday) Q: How does proof of receipt work in a purchase transaction versus a refinance transaction?A: For a joint purchase loan application, only one of the borrowers needs to acknowledge receipt under TRID by providing their signature or doing their E-Consent. HOWEVER, in a rescindable refinance transaction, ALL borrowers must acknowledge receipt. Q: What if I have a refinance of a primary residence and the spouse is abroad on business and not due home until the day before closing. If they do not close, they will lose their locked rate. Surely, the law was not intended to penalize a borrower for having to travel for business.

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TRID Q & AA: The circumstances do not come into play with the timing requirements of TRID. If the travelling spouse is unable to provide their acknowledgement of the CD while travelling, the 6-day rule will apply (see above)

Q: Who is going to issue the Closing Disclosure? A: Fidelity Bank will issue the Closing Disclosure

Q: How are we going to make sure estimated closing dates are met?A: We are still working on the process flow, but we recognize many of you want to understand the basic idea. Please bear in mind: this is subject to change.

The processor will enter the estimated closing date into LQB.

A report will be run every day capturing the loans with estimated closing dates within the next 10 business days and a closing disclosure specialist (CDS) will be assigned.

The closing disclosure specialist will contact the pre-closer at the company the borrower has chosen to handle their loan closing to begin a dialogue. The estimated closing date will be confirmed and the pre-closer will share fees with the CDS via a collaborative spreadsheet accessible via the cloud. The CDS will enter those fees into LQB.

Using the daily report, on the 6th business day prior to the estimated closing date, the CDS will issue the CD so long as the loan meets the criteria for disclosure (for example, it’s in an approved status). If the CD cannot be issued at that time, the CDS will contact both the LO and the processor to inform them that the estimated closing date needs to be addressed and amended. The CDS will continue to monitor that loan daily.

Once the daily report shows the loan as eligible for issuing the CD, the CDS will perform the final validation of fees within LQB and will send the CD to the borrower through LQB/IDS. IDS will mail the CD to the borrowers the same day it was delivered electronically and provide an “earliest close by” date, which will be 6 business days after the CD was mailed.

As soon as the CD is issued, a closer will be assigned to the loan.

If the borrower(s) confirm receipt of the CD, the “earliest close by” date will be moved up based upon the date of receipt.

Any revised CD will also be handled by the CDS, as circumstances warrant. The closer will handle issuing the full closing package to the attorney.

Q: Will Fidelity be providing formal training on TRID?A: Yes. The plan is to begin testing within the next few weeks. Training by role should begin by September 1 st. Each training session will be recorded for future reference.

Q: What if we send out the CD when loan is approved with conditions but the borrower cannot meet the conditions? What is our obligation then if the loan gets denied for conditions not met?

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TRID Q & AA: The CD is not a commitment letter. If the loan winds up being denied after the CD is issued, that does not violate the law. If we wait for the CTC to be issued before providing the CD and to “start the clock” for closing, we may find ourselves in an uncompetitive situation and it could result in delayed closings. The plan (for now) is to provide the CD once the loan is approved with conditions. We may limit the type of allowable conditions, more to follow on that.

Q: Since a loan needs to be approved before the CD is sent out, do you think underwriters will increase the number of loans pended/suspended vs. approved with conditions to avoid potential issues as mentioned above?A: We do not believe the underwriting process will change. However, we will not issue a CD on a loan in a suspense status; it must be approved with conditions. This could cause a delay in the closing date. Communication between the LO, processor, underwriter and the closing disclosure specialist will be critical.

Q: Why not issue the CD earlier in the process to make sure the estimated closing date is not an issue?A: Once a CD is issued, a revised LE can no longer be provided. It is possible to issue a revised CD, but the rules regarding tolerance timing/reset of fees is more stringent than the LE. A lender could wind up with additional tolerance cures by providing the CD too far in advance of closing.

Q: We keep hearing that the borrower will receive a CD from the lender and the seller will receive a separate CD from the attorney. We have also been told that the CDs cannot be shared between the two parties and the realtor will not be entitled to review the CD. Is this the case?A: True. The CDs need to be separate; the seller cannot view the buyer’s CD and vice-versa. One solution we’ve been talking about is to use a “settlement worksheet” that looks a lot like the present day HUD-1 settlement statement and have that document shared between the parties, so long as all parties agree(yup! via another disclosure!). Sort of like the fee worksheet we use now/when RESPA 2010 came out.

Q: We thought TRID was designed to reduce the number of documents a borrower receives at closing, this sounds like it will be just the opposite?A: That is possible. While the CD combines the HUD and the final TIL statement, it is apparent that the closing attorneys/title agents will continue to use a document similar to the present-day HUD for full disclosure between the parties.

Q: What will happen when we require a copy of the CD/proof of sale of a borrower’s current home to show net proceeds/pay-off of mortgage and they, the seller in that transaction, then send us a CD and it has their buyer’s confidential info on it? A: Only the person that the CD pertains to would be the party to provide that to us. It would then not be shared with anyone else, like paystubs, W-2s, etc. So, in this scenario we would obtain the signed buyer CD only to proof funds to close.

Q: Will the borrower still be able to choose their own settlement provider?A: Yes. The borrower will receive a disclosure at time of loan application listing Fidelity approved vendors. The borrower can choose one of our vendors, or choose their own.

Q: Will this choice affect allowed variances/tolerances at closing:A: Yes. If the borrower chooses a settlement provider identified by Fidelity, the fee variance will be limited to 10% at closing. If the borrower chooses their own vendor, the fees will not be subject to tolerances at closing.

Q: How will Fidelity determine the vendors listed on the initial disclosure?

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TRID Q & AA: This is still a topic of conversation, but the plan is to require an ALTA certification from our current list of approved settlement providers in order to remain on our approved list.

Q: What will we require if the borrower chooses their own vendor?A: The minimum criteria will be: 1. E&O of at least $1M 2. Insured closing letter from the title company issuing title 3. Letter of Good Standing 4. Firm resume 5. Wire instructions and list of fees. We will also check exclusionary lists to confirm the borrower’s choice of settlement agent does not appear on any of those lists.

Q: What happens if the borrower chooses a firm that cannot meet the above requirements?A: We will ask them to select another vendor of their choosing.

Q: I feel a little lost. Where can I obtain information on TRID?A: We have posted TRID resources to the intranet under mortgage-compliance-TRID implementation. You will find Fidelity TRID resources, sample TRID Disclosures, the CFPB Small Entity Guide and additional TRID resources here.

Q: Will there be a fees worksheet for prequals with TRID?A: Yes. IDS will still allow us to print a fee worksheet from LEAD status. A sample is attached.

Q: TRID talks about “good faith” and getting fees correct. What does an LO quote if the current buyers currently have exemptions the new buyers may not be entitled to (i.e. senior discount):A: The taxes quoted to a new buyer should always be without any exemptions. Otherwise, we would be misrepresenting what they would be responsible for, our qualifying may be inaccurate (Ability to repay concerns there!), and there could be payment shock after the fact (Taxes should always be quoted as realistically as possible, including quoting “as improved” for new construction. That figure could be different from the amount placed into escrow, but we need to consider the intent of the law and “good faith.” Basically, we need to avoid any unpleasant surprises for the borrower).

Q: How do I quote accurate taxes for escrow purposes?A: At time of application we know the property address. Therefore, we are required to get the taxes right upfront on the LE. Servicing is working on a breakdown of tax due dates for us by state and by county in the states where we service loans. That will cover all states where we currently allow mortgage lending. It is incumbent upon us to research the taxes with the county to get the accurate figure due (without exemptions) and then to estimate the correct # of months for escrow based on the due date and the estimated closing date. This is nothing new!

Q: how can I start testing loans in LQB BETA?A: Unfortunately, the test environment does not have the same capacity as our “live” LQB site. As a result, we have to limit the number of folks that are using BETA directly.

Q: How will I know how to enter the fees prior to October 3rd if I cannot practice now?A: Jeff Lev is the head of training. He will be posting screen shots to the intranet for easy access. He will also be conducting weekly calls on TRID and LQB beginning on Friday 9/11 at 11:00 am and continuing every week until after implementation. Plan to dial in and ask your questions now!

Q: In the event of a condo or new PUD, we may not know the cost of the questionnaire, etc. Can they be charged to the borrower without being on the LE?

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TRID Q & AA: No. If we know the subject is a condo or a PUD and we need a questionnaire, we must include that on the initial LE. If we do not know the exact figure, we need to try to find out how much they will charge. If we cannot get a hold of anyone and we are up against the disclosure deadline, take an “educated guess” based on past experience and quote that figure.

Q: If we email the agents for those fees, does that satisfy our documentation that we tried to get the info if it is not on the contract.A: Yes. Upload that email as evidence of compliance. The index will be announced at a later time.

Q: Most borrowers get a home inspection during due diligence. Does that home inspection cost need to be disclosed?A: Depends. If the contract states the borrower can get a home inspection and that they would be responsible for that payment, then yes it should be on the LE.

Q: Generally in our market the home inspection is paid outside of closing “POC” and is not reflected on the HUD – But on the LE, where would it go?A: Even fees paid outside of closing must be disclosed on the LE. If the borrower is responsible for paying this and it is listed in the contract, it needs to appear inBlock H of the LE.

Q: The RE Brokers changed the language and all the companies (at least in the Mid-Atlantic region) call the realtor admin fee an "additional commission fee" and the charge usually goes into the top lines on the HUD where the commission is. Where should that fee go under TRID?A: We have added a fee to Block H called, “Additional Commission” to address this concern.

Q: What do we do if we get an appraisal back and find out it has required repairs? That will trigger a final inspection fee. How does that play out now?A: Same as it does now. As soon as the appraisal is received and we have “new” information (we need a final) that fee can be added to the LE (or CD) with a COC, SO LONG AS we do so within 3 days of receipt of the appraisal. Document LQB to validate timing of the COC/LE/CD!

Q: Existing home, we disclosed $400.00 appraisal without knowing there were repairs happening that requires a final appraisal prior to closing. Can we COC for the additional final inspection charge? Or do we have to eat it?A: Same as above. If we do not re-disclose within 3 business days of receiving that appraisal, we then absorb the cost 100%. The appraisal fee is now a 0% tolerance item.

Q: Why the emphasis on disclosing taxes accurately if it is in a box (G)? – which is “not subject to any tolerance limitation”A: This is due to the very clear language in the law that discusses “good faith.” If the fees on the final CD vary outside of allowable tolerances from the LE, we will have violated “good faith.” What are those penalties? We do not know, but TRID is a subset of TILA and TILA violations are NASTY. We need to be as accurate as possible upfront on the LE. Again, no surprises at closing for the consumer!

Q: Who is setting up the SSPL and how are various vendors assigned to that SSPL based on geographic location and loan type?A: IDS is developing the SSPL and as fees appear on an LE, they will include that vendor on the SSPL. This has yet to be tested.

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TRID Q & A

Q: So IDS will print ALL these NEW disclosures in the doc set once implemented?A: Yes

Q: In our branch the contracts call for the attorney fee and title fee to be split equally on purchase loans.Do we disclose the full amounts or how do we disclose these 2 fees?A: These fees are lender-required fees regardless of who ultimately pays them. Just like RESPA 2010 now, these must be disclosed to the buyer on the LE with an offsetting seller credit so the borrower receives an accurate cash to close figure on the LE.

Q: You have to wait 3 days after you send the Loan Estimate before you can order the appraisal.TRUEFALSEA: False. There is no time frame for a consumer receiving a Loan Estimate, indicating Intent to Proceed and then ordering the appraisal. You can actually take an application, issue a Loan Estimate, and have the borrower indicate their intent to proceed while they are sitting in your office. You just have to make certain that the order is, Application, Loan Estimate, Intent to Proceed, and then order the appraisal.

Q: What if the law office tells me that the tax bill has changed after the CD is issued (and we did not have prior knowledge of this item)?A: Communicate & document the change to the closing disclosure specialist. As long as the closing date does not change, the updated numbers will be shown on the final CD at closing, and no tolerance cure is necessary. This is considered new information, and the lender will not be responsible for a cure.

Q: What if I receive the title docs and the tax bill needs to be collected at closing and it is different from what I estimated in LE section F?A: This is a valid COC. You may re-disclose an LE within 3 days of receipt of the title docs.

Q: What if I change the loan program or my APR increases by more than .125% after the CD is issued?A: A new CD will be issued, and closing cannot occur for at least 3 business days once proof of receipt has been obtained. Without proof of receipt, closing could be delayed up to 6 business days.

Q: If a non-borrowing individual receives a TIL now (community property states, on title only, etc.), how will this work with TRID?A: That individual will now receive a CD rather than a TIL AND we must have evidence from this individual that it was received at least 3 business days prior to closing or closing will be delayed. Q: Who delivers the CD to the borrower? The LO, LOA, closers, closing attorneys?A: The Fidelity CDS: Closing Disclosure Specialist. Q: On a purchase, if the borrowers are unmarried, are they each required to sign the CD?

A: Depends. If they applied jointly, only one needs to acknowledge. If they chose to apply separately on 2 1003s. Then it is our understanding that both would need to acknowledge receipt per the TRID timing requirements.

Q: Can they use a POA on the CD

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TRID Q & AA: Yes. Our standard process applies. Q: The processors pad the fees in the system for DU purposes. Right now, they pad the pre-paids/closing costs in the system to prevent having to send a loan back to UW if the cash to close is more than the AUS.A: We do not anticipate any change to our procedure in this regard. Make sure the borrower’s LE is accurate, however. Q: What if the closing is delayed for other reasons for 1 day. If we send the CD assuming the original close date, will we need to send a new CD with updated closing dates? What if this happens 1 day before closing? A: Yes, a revised CD at closing will be required to reflect changes in prepaid interest, etc. So long as the APR has not increased more than .125% and the program has not changed, this will not delay closing.

Q: LQB allows us to use the same email for both borrowers will this still be allowed under TRID?A: Yes

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