TRID Updates: What Lenders and Agents Need to Know

The TILA-RESPA Integrated Disclosure Rule (TRID) popularly referred to as “Know Before You Owe” went into effect in October of 2015. Since then many people in the industry have been clamoring for clarifications and they were finally updated this summer.

Here’s what you need to know about the proposed TRID updates:

What’s New About TRID?

The Consumer Financial Protection Bureau’s (CFPB) original Rule included new mortgage disclosure forms. At the time of effect many industry people requested CFPB provide clarification on the protocol for mistakes on the forms. With the accuracy responsibility firmly on the shoulders of the lenders these groups wanted to make sure what would happen in the event of an inaccuracy/mistake. The 293-page July amendments don’t provide clarification on this issue.

What they do provide clarification on is the “parts of our mortgage disclosure rule to make for a smoother implementation process,” CFPB Director Richard Cordray said in a press release. These include:

Housing-assistance lending – in the case of housing-assistance loans transfer taxes and fees may be assessed. These fees would not negate the loan’s eligibility for the Rule’s partial exemption from disclosure requirements. The Rule stipulates, “Through the proposed update, more housing assistance loans would qualify for the partial exemption, which should encourage lenders to partner with housing finance agencies to make these loans.”

Co-ops are covered – this clarification stipulates that loans covered by cooperatives are (now) covered by TRID. Currently people buying into cooperatives own a share in a corporation that owns the property and thus they were not included in the original TRID Rule.

Information sharing between creditors and other industry organizations – these clarifications speak to how and what is allowed to be shared of the disclosure forms between consumers, creditors, settlement agents, sellers, real estate brokers, and other agents. This is currently a concern because of the Gramm-Leach-Bliley Act and several state laws regarding privacy and disclosure.

Tolerances for total payments – pre-TRID total payments included finance charges. In the original wording of TRID these charges were removed from the total calculation. The proposed Amendments add them back in so that it “would make the treatment of the total of payments disclosure consistent with what it was prior to the Know Before You Owe mortgage disclosure rule.”

---

>>>> How does TRID affect mortgage lenders? … Learn More

---

What Else Can You Expect with TRID?

There are small changes to the Rule as well as technical “corrections” in certain areas. These areas include:

• Escrow account disclosures and notices
• Seller and lender credits
• Affiliate charges
• Constructions loans
• Cash to close tables for transactions without a seller
• Expiration dates for closing costs on the Loan Estimate
• Agent responsibilities
• Property value and tax estimates

In a lot of ways this sweeping change to the industry is a car being assembled as it’s driving down the road. There will be clarifications required and challenges to hammer out.

The clarifications are open for public comment until October 18th, when the final regulations will be delivered.

If you’d like to learn more about TRID and what it means for your customers, contact us today at Bay National Title Company at 727-449-8733.