Compliance Updates

April: Weekly Compliance Updates

Did You Know Series: VA Announces New HUD-1 Documentation and Itemization Requirements

April 24, 2015

Department of Veterans Affairs (VA) Circular 26-15-6, dated April 13, 2015, announces that the VA has new itemization requirements for fees associated with current HUD-1 line numbers 200+, 801, 801, and 803. Loans with a closing date of May 1, 2015, will be required to include an itemization of lender/seller credits and HUD-1 lines 801, 801, and 803.

The circular allows this itemization to either take place on separate disclosures or directly within the HUD-1. IDS has added separate disclosures that may be updated and used after August 1, 2015, when the HUD-1 will be replaced by the Closing Disclosure (CD) for the majority of transactions. The disclosures that IDS has added are substantially similar to the model examples referenced in VA Circular 26-15-6.

TRID Hot Topic Series: E-Signing the CD in the idsDoc System

April 10, 2015

The TRID rule allows the CD to be delivered by electronic means if its delivery meets the requirements of the E-Sign Act. See, 1026.19(f)(1)(iii)-2. Using the E-Sign process in conjunction with the CD has the potential to reduce the time to close by up to 3 specific business days.

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TRID Hot Topic Series: Managing the Appraisal (C-9 or Reg B) Disclosure in the idsDoc System

April 3, 2015

The TRID rule states at § 1026.37(m)(1) and § 1026.38(p)(1) that when a transaction is subject to TRID and 15 U.S.C. 1639h (implemented in Reg Z, HPML Appraisal Rule) or 15 U.S.C. 1691(e) (implemented in Reg B), then the “appraisal” disclosure is required on the Loan Estimate (LE) and Closing Disclosure (CD).

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TRID Hot Topic Series: Up-front Fee Restriction

March 6, 2015

The TRID rule imposes some up-front fee restrictions on Creditors. See, § 1026.19(e)(2)(i)(A), (B). Here’s the CFPB’s discussion, directly from the preamble to the TRID rule, as to why it chose to impose a restriction on charging consumers fees until after a creditor receives some kind of affirmative action from the consumer:

Section 128(b)(2)(E) of TILA provides that the “consumer shall receive the disclosures required under [TILA section 128(b)] before paying any fee to the creditor or other person in connection with the consumer’s application for an extension of credit that is secured by the dwelling of a consumer.” 15 U.S.C. 1638(b)(2)(E). This provision is implemented in § 1026.19(a)(1)(ii). Although RESPA does not contain a similar provision, Regulation X does. See § 1024.7(a)(4). However, unlike Regulation Z, Regulation X prohibits a consumer from paying a fee until the consumer indicates an intent to proceed with the transaction after receiving the disclosures. Id. As discussed below, both Regulation Z and Regulation X provide an exception only for the cost of obtaining a credit history or credit report, respectively.

Thus, Regulation X [and TRID] require[s] consumers to take an additional affirmative step before new fees may be charged. (Emphasis added.)