Compliance Updates

February: Weekly Compliance Updates

TRID Hot Topic Series: Creation and Issuance of the Loan Estimate

February 27, 2015

Creation and issuance of the Loan Estimate (LE) follows rules similar to creation and issuance of the GFE; however, there are a few issues surrounding creation and issuance of the LE that Creditors should keep on their radar:

    1. Predisclosure cost estimates. TRID allows creditors to provide customers with an estimate of costs prior to delivering an LE; however, the estimate worksheet cannot look like the LE and it must print the following in a 12-point conspicuous font: “Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan.” See, § 1026.19(e)(2)(ii).
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TRID Hot Topic Series: Managing Tighter Tolerances (a.k.a. Variations or Variances)

February 20, 2015

The Loan Estimate (LE), like the current GFE, requires that certain closing costs be disclosed in “good faith.” The new rule states that an “estimated closing cost…is in good faith if the charge imposed on the consumer does not exceed the amount originally disclosed” on the LE. (Emphasis Added). The new rule refers to “tolerances” as “variations,” and many in the industry are referring to them as “variances;” although, technically, “variances” is not a word that appears in the rule. See, § 1026.19(e)(3), 1026.19(e)(3)(iii).

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TRID Hot Topic Series: Delivery Rules: In-Person vs. Everything Else

February 13, 2015

TRID has new timing requirements surrounding the creation and delivery of the Loan Estimate (“LE”) and Closing Disclosure (“CD”), which are as follows:

    1. LE – Requirement to deliver the LE within three business days of application. See, § 1026.19(e)(1)(iii)(A).
    2. LE – Requirement to deliver the LE seven days or more prior to consummation. See, § 1026.19(e)(1)(iii)(B).
    3. CD – Requirement to deliver the CD three days prior to consummation. See, § 1026.19(f)(1)(ii)(A).
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TRID Hot Topic Series: Creation and Issuance of the Closing Disclosure

February 6, 2015

Creation and issuance of the Closing Disclosure (“CD”) is probably the piece of the TRID puzzle effecting the greatest change to industry. The following are some challenges Creditors should keep on their radar:

    1. 3-day Waiting Period. TRID requires that the consumer receive the CD 3 specific business days prior to consummation. This small timing requirement could affect everything in the loan generation process from (a) real estate contract dates to (b) internal work-flow and quality assurance processes to (c) coordination efforts with settlement service providers. See, 1026.19(f)(1)(ii).
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