Compliance Updates

November: Weekly Compliance Updates

Can “recording fees” be disclosed on a separate line from “transfer taxes” on the LE/CD?

November 30, 2015

This topic is currently the FAQ that has been voted on the most times as a helpful response in the Resources FAQ section for TRID:

There is a separate line dedicated to each of these fee types in section “E. TAXES AND OTHER GOVERNMENT FEES” on page 2 of the LE/CD.

The pertinent part of the rule states:

1026.37(g)(1)

TAXES AND OTHER GOVERNMENT FEES. Under the subheading “Taxes and Other Government Fees,” the amounts to be paid to State and local governments for taxes and other government fees, and the subtotal of all such amounts, as follows:

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Why doesn’t the aggregate adjustment for the escrow account show up on the Loan Estimate?

November 20, 2015

§ 1026.37(g)(3) of the rule states the following in Official Interpretation-2, which excludes the aggregate adjustment from the LE:

AGGREGATE ESCROW ACCOUNT CALCULATION. The aggregate escrow account adjustment required under § 1026.38(g)(3) and 12 CFR 1024.17(d)(2) is not included on the Loan Estimate under § 1026.37(g)(3). [Emphasis added]

However, the aggregate adjustment is accounted for on the CD, as follows, § 1026.38(g)(3), Official Interpretation-2:

AGGREGATE ACCOUNTING.The method used to determine the aggregate adjustment for the purposes of establishing the escrow account is described in 12 CFR 1024.17(d)(2). Examples of this calculation methodology can be found in appendix E to 12 CFR part 1024. The aggregate adjustment, as illustrated by form H-25 of appendix H to this part, is disclosed as the last listed item in the amounts disclosed under § 1026.38(g)(3). [Emphasis added]

How does the disclosure of recording fees differ between the Loan Estimate and the Closing Disclosure?

November 13, 2015

IDS Compliance has been asked several times why recording fees are not itemized out on the Loan Estimate and Closing Disclosures. The following clarification comes from the CFPB Response from Webinar dated 11/18/2014:

Well, the Loan Estimate requires the sum of all recording fees to be disclosed as one item. The provision for that is found at § 1026.37(g)(1)(i). The Closing Disclosure also requires the recording fees to be disclosed as one item, but also requires that the amount paid to record the deed and mortgage be itemized separately. The itemized recording fee for the deed and the mortgage should only include the amounts needed to record each of those documents. Recording fees associated with any other documents, except for the deed and the mortgage, are just included as part of the total recording fees and are not separately itemized. See, § 1026.38(g)(1)(i). Please note that the total recording fees are allocated between the consumer, seller and others in the applicable column pursuant to the agreement among those parties. [Emphasis added; highlighted parts correspond with the pictures below].

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What fee types go into each of the Good Faith tolerance categories, post TRID?

November 7, 2015

IDS Compliance has this simple breakdown from the rule:

Good Faith tolerances are referred to in the TRID rule as “variations,” but many in the industry are referring to them as “variances.”

The following list shows the types of fees that make up each category, per § 1026.19(e)(3):

0% Variance Category

  • Fees paid to creditor or mortgage broker
  • Fees paid to affiliate of creditor or mortgage broker
  • Fees paid for services for which consumer not permitted to shop
  • Transfer Taxes
  • Lender Credits
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