TILA-RESPA INTEGRATED DISCLOSURE RULE FREQUENTLY ASKED QUESTIONS
Effective Date of the TILA-RESPA Integrated Disclosure Rules (TRID)
Q: When will the new disclosure rules under TRID take effect?
A: The new rules will go into effect for all applications taken by the originator on or after October 3rd, 2015.
Q: What happens if prior to October 3rd, 2015, we have taken an application for a pre-approval/pre- qualification and the borrower has not found a property yet, but on or after October 3rd, 2015 we obtain a property address, should we apply the new TRID disclosures?
A: If prior to October 3rd, 2015 you did not have a property address or all six pieces of information that constitute an application under TRID, then you did not have an application prior to October 3rd 2015. If you receive that last piece of information on October 3rd, 2015 or later, then your application date will be the date you received that last piece of information constituting an application. Since you would have received that last piece of information and ultimately an application as defined under TRID on or after October 3rd, 2015, the new TRID rules and disclosures will apply.
Early Disclosure Requirements/Application Information
Q: When must an applicant be provided a Loan Estimate (LE)?
A: An applicant must be provided a LE within three general business days of when the originator has taken an application as defined under TRID.
Q: When does a creditor or broker have an application for the purposes of having to deliver the Loan Estimate?
A: An application is considered taken when the broker’s or creditor’s originator receives the following six pieces of information: (1) name(s); (2) social security number; (3) income; (4) the subject property address; (5) the estimated value of subject property; and (6) the loan amount sought.
Q: Can the application information be received verbally, or is documentation required for any of the six items?
A: The six pieces of information can be taken verbally (e.g., in an-person or telephone interview) or in writing from the borrower. We cannot hold back on issuing the LE pending documentation of any of those six items.
Q: What if an applicant submits an application via the originator’s website and when it is finally reviewed, the applicant does not qualify. Do you still need to send an LE?
A: Broker must ensure that they are following proper HMDA and Fair Lending procedures prior to issuing a denial. If a loan is denied or withdrawn within three general business days of receiving the application, the rule states that there is no need to issue an LE; however, should the consumer later change their minds or provide additional qualifying information, that application cannot be re-opened; you would need to take a new one.
Q: If two applicants share the same email address, can we issue the required disclosures to each borrower utilizing the same address?
A: PRMG will accept this as long as the disclosures are being sent to the requested address by each respective applicant that must be delivered a disclosure under the rule (LE or CD).
Q: Who must be provided an LE?
A: At a minimum, the primary borrower/applicant must be provided the LE under TRID; however, it is a better business practice to provide all borrowers on the loan a copy of the LE. PRMG encourages all clients to follow best business practices.
Q: What is the final determination of who is the primary borrower?
A: As a general qualifying determination, usually, the primary borrower will be named first on the transaction. If a primary borrower is not apparent, then the LEs and CDs should be provided to each borrower.
Q: What happens if the applicant does not sign the disclosures (including the LE) or the application within three general business days of when the originator has taken the application?
A: The rule does not impose any requirements upon when the borrower must sign the initial LE. The rule only states that a broker or lender must provide an LE within three general business days of receiving an application.
Q: How do we prequalify a refinance without triggering TRID?
A: You likely will have all six pieces of application information in the prequalifying process on a refinance, because you will need everything other than the property address, but you will have address, anyway. If you are unable to complete the prequalification in three business days, you will need to send the initial LE before you finish. If you send the initial LE on the loan amount requested, and later find that the consumer will not qualify on that basis, you will need to issue a revised LE under a changed circumstance if the consumer still wishes to move forward with the application. An LE is not a commitment to lend; it is a tool for the consumer to use in shopping mortgage for loan products.
Q: Can you require a borrower to provide you supporting documentation of their income, such as W2’s?
A: You can require a consumer to provide you supporting documentation as a part of the standard loan process but you CANNOT delay the initial Loan Estimate delivery requirement because the consumer has not yet provided you the supporting documentation. If the consumer provides you their income, you must reasonably rely upon that amount and disclose within three general business days of when the loan originator receives the remaining five items of an application from the consumer. If at a later time, the consumer provides you documentation that cannot support the stated income they provided you, then you will have a valid change of circumstance allowing you to redisclose the change in settlement fees resulting from the new/incorrect information.
Q: How early can we order an appraisal or charge the borrower for upfront fees?
A: With the LE going out earlier in the process and the fact that there is no longer a need to wait on a Wholesale transaction for a lender to issue a TIL and the consumer to receive that TIL, the waiting time to order an appraisal should be minimized in comparison to the old rules. To order an appraisal, PRMG will require that: (1) the broker disclosed an LE to the consumer, (2) the consumer has received the LE (relying on the mailbox rule presumption or other valid proof of receipt), (3) the consumer has indicated an intent to proceed with the transaction, (4) the loan has been submitted to PRMG with the minimum submission requirements, and (5) PRMG has accepted the loan and the broker’s initial LE. As soon as those five items have been satisfied, the broker may order an appraisal.
Q: Can I charge the applicant for a credit report before issuing an LE?
A: Yes, the rule explicitly allows for an originator to charge the applicant for a credit report and only a credit report prior to the applicant receiving the LE and indicating an intent to proceed. No other fees may be imposed upon the applicant prior to the applicant receiving an LE and indicating an intent to proceed. Imposing a fee includes collecting the applicant’s credit card information ahead of time with the anticipation to charge them for a fee other than the credit report prior to them receiving an LE and indicating an intent to proceed. If you collect an applicant’s credit card information for the purposes of charging them for a credit report, then your authorization to charge must be limited to only the credit report.
Q: What is the mailbox rule presumption of receipt?
A: The mailbox rule presumption of receipt is the time outlined in the rule that provides a presumption of when a consumer has received a disclosure based on when the disclosures were placed in the mail. In following TRID, it is presumed a consumer receives a disclosure on the third specific business day from when the disclosures were placed in the mail. The mailbox rule applies the same three specific business days to both electronic (email) delivery and snail mail. If the lender or originator follows the proper electronic delivery process and is able to prove the consumer received the disclosure sooner than the three day mailbox rule presumption received date, then the lender/originator can rely on that sooner date instead of waiting. In the event the documents are provided face-to-face, a wet dated signature is also sufficient to prove the consumer received the disclosure sooner than the presumed date under the mailbox rule.
Q: What if we take the application and provide all of the disclosures face-to-face, will we still have to wait three specific business days to presume the applicant received the disclosures under the mailbox rule to order the appraisal?
A: No. If you provide the consumer the disclosures face-to-face and they wet sign and date the LE or Acknowledgment form and also wet sign and date the intent to proceed, then you have proof the consumer received the disclosure sooner than the three day mailbox rule presumption receipt and proof the consumer intends to proceed with the transaction.
Consumer’s Intent to Proceed
Q: Can you clarify the Intent to Proceed process?
A: The consumer must express an intent to proceed with the transaction disclosed in the initial LE. We recommend that you include an intent to proceed form with the initial disclosure package so when the Borrower acknowledges the LE, they can acknowledge the intent to proceed as well. PRMG will accept wet and e-signatures of the intent to proceed form or expressed intent verbally (by phone or in person), or written through an email. It is preferred that the broker receive the expressed intent in written form via email or by the acknowledged form. If the consumer’s intent to proceed is verbal, then you should keep a document for your records memorializing the verbal communication from the consumer providing you the intent to proceed in the event it comes into question. Intent to proceed is given only once, on the initial LE.
Q: Is it permissible to send the intent to proceed form along with the LE?
A: PRMG does not prohibit originators from sending the intent to proceed along with the Loan Estimate. As stated above, it is strongly encouraged that originators send a complete disclosure package, which would include the intent to proceed form. If the consumer chooses to proceed after reviewing the LE, they can acknowledge both forms at that time.
Q: What is eConsent and why is it required?
A: In order to use the electronic disclosure process to reduce the mailbox rule presumption of receipt wait time, the consumer must consent the edisclosure process prior to receiving the electronic disclosures.
Q: How soon can we send the eConsent in the process? Can eConsent be sent at prequal? Can we send the eConsent form before we get the six pieces of application information?
A: You can send the eConsent form out as soon as you take in the file. PRMG encourages you to send your e-consent as early in the process as possible to the extent your system will allow you to provide it. By sending the eConsent earlier in the process you will maximize your ability to electronically disclose within the three general business days and avoid having to rely on the Mailbox Rule to order the appraisal.
Q: Will PRMG provide their own electronic consent once the application is submitted by the broker?
A: Yes, once the loan is received, PRMG will issue an electronic consent to the consumer, even before PRMG has determined whether it will accept the broker’s LE. Assuming the transaction proceeds, PRMG will use the electronic consent throughout the process to deliver all revised LE(s) and the issuing of the CD(s). To avoid extended waiting periods due to the Mailbox Rule, inform your clients that they will be receiving emails from PRMG as their lender and that they need to read, review and consent (if they agree) to the notices and disclosures provided by PRMG.
Q: Will PRMG need to obtain eConsent from a non-borrowing spouse to avoid extended wait times of the mailbox rule?
A: Yes. All parties with rescission rights, such as a non-borrowing spouse, must receive the Closing Disclosure (CD) no later than three specific business days of consummation.
Loan Estimate Preparation
Q: Who will provide the Loan Estimate(s)?
A: It is PRMG’s policy that the broker will be responsible for issuing the initial LE within three general business days of when the broker’s originator receives an application as defined under the rule as receiving the consumer’s name, income, social security number, subject property address, subject property’s estimated value and loan amount requested. If a valid COC occurs (i.e. rate lock) prior to the broker submitting the loan and PRMG accepting the loan, then the broker will also be responsible for ensuring that a revised LE is provided to the consumer within three general business days of when the originator receives the information constituting a valid COC. PRMG will be responsible for any LE(s) that must be provided due to a valid COC or rate lock that occur after PRMG has accepted the submitted loan from the Broker.
Q: Do we put PRMG’s name or PRMG’s loan number on the LE?
A: No, PRMG will NOT ACCEPT any loans where the initial LE that was provided to the consumer has PRMG’s name on it, PRMG’s loan number on it, or any other lender’s name or loan number on it. The broker’s must leave the lender information blank on the LE.
Q: Are brokers allowed to provide a Loan Estimate even though they were prohibited from providing a Truth in Lending Statement (TIL)?
A: Yes. TRID explicitly states that a broker and lender may share the responsibility of providing the Loan Estimate. A TIL, which is no longer required for the loans covered under TRID, must be provided by a creditor. Since a TIL is no longer a required disclosure under TRID, this is no longer an issue.
Loan Estimate – Accuracy
Q: What costs and credits must be disclosed on the LE?
A: An LE must contain a good faith estimate, meaning the originator must use the “best information available” at the time of preparing the LE in determining all of the costs and credits that have an impact on the consumer’s required cash to close. Assuming the LE was disclosed in good-faith, other optional costs that are not required as a part of the loan transaction (e.g. home warranty) will not be subject to a tolerance.
Q: What are the tolerance buckets?
A: Tolerance buckets set the standard for the accuracy of fees disclosed on the LE. Absent a valid change of circumstance, a fee that was disclosed cannot change beyond the permitted tolerance, otherwise the Lender must cure the difference between what is allowed under the applicable tolerance and the final/actual charge. There are three tolerance buckets: (1) Zero Tolerance; (2) 10 Percent Tolerance; and (3) No Tolerance. Zero Tolerance fees mean that absent a valid COC, the fees disclosed upfront cannot increase at all. 10 Percent Tolerance fees altogether are not allowed to increase more than 10 percent of the cumulative amount of fees within the 10 Percent Tolerance bucket. No Tolerance fees can move up without restriction so long as the originator disclosed them using the “best information available” when preparing the LE.
Q: What fees fall under the Zero Tolerance Bucket?
A: All origination charges which include any fees paid to the broker or lender, as well as any fees paid to the Lender’s or Broker’s affiliate(s) for their services, lender credits, interest rate dependent charges, services required by the lender or broker that the consumer CANNOT shop for (i.e. credit report, UFMIP, appraisal fees, etc.), and transfer taxes.
Q: What fees fall under the 10 Percent Bucket?
A: All fees that are required by the lender or broker that the consumer CAN shop for but the consumer chooses a provider on the Settlement Service Provider List (SSPL) as well as government recording fees.
Q: What fees fall under the Zero Tolerance Bucket?
A: All optional fees not required by the lender or broker as a part of the loan transaction, prepaid(s), property insurance, seller credits, per diem interest, and fees that are required by the lender or broker that the consumer CAN shop for and the consumer chooses a provider that is NOT on the SSPL.
Loan Estimate – Settlement Service Provider List (SSPL)
Q: What providers must we list on the Settlement Service Provider List (SSPL)?
A: It is PRMG’s policy that you must list at least one settlement service provider within the geographic area in which the subject property is located for each service that is required as a part of the loan transaction that the borrower can shop for.
Q: Does the HOA or a home warranty company have to be listed on the Settlement Service Provider List?
A: No. Only services that the borrower is permitted to shop for that are required as a part of the loan transaction should be listed on the Settlement Service Provider List.
Q: If the underwriter conditions for repairs to the property after reviewing the appraisal, do we need to name a contractor for the repairs on our Settlement Service Provider List?
A: No. Property repairs are not a settlement charge; therefore, they are not listed on the LE or SSPL.
Loan Estimate – Broker Compensation
Q: Do we have to disclose our Lender Paid Compensation anywhere on the Loan Estimate?
A: No, the broker’s compensation, if it is lender paid, will not appear on the loan estimate. However, if it is borrower paid, then the charges from the broker that are to be paid by the consumer will appear under “A. Origination Charges” on the LE. PRMG will provide broker’s lender paid compensation on the CD as required under in TRID.
Q: Does a valid COC provide the broker the ability to increase or decrease their compensation?
A: Generally No. A valid COC provides the lender/broker the ability to redisclose and reset the tolerances so the lender will not be responsible for curing the increase in fees to the consumer that exceeded the initial tolerances. The only extent to which a broker’s compensation should change in conjunction with a valid COC is the amount in which the broker’s compensation varies based upon their fixed percentage of the loan amount. The new rules do not amend the Loan Originator Compensation rules under Regulation Z which prohibit an originator or broker from varying their compensation based on the terms or proxy to the terms of a transaction.
Loan Estimate – Interest-rate Dependent Charges
Q: Do we initially disclose discount points if we are quoting a 4.25% interest rate at a cost of .188, even if we didn't lock it yet?
A: Yes. The Rule requires us to disclose all Loan Costs using the “best information available” at the time the LE is prepared. When the interest rate is locked at a later date, we are permitted to adjust the interest-rate dependent charges (i.e., credit or discount points). These charges are not subject to any tolerance when the rate is not locked, as long as we disclose what applies to the quoted interest rate at the time the LE is disclosed. Any discount fees must be disclosed under “A. Origination Charges.”
Q: Can you explain what happens if you decide to float the rate and then you end up subsequently locking the rate at a price higher than what was initially disclosed?
A: As mentioned above, if the consumer chooses to float the rate then there is generally no tolerance restriction applied to the interest-rate dependent charges until the loan is locked as long as the originator disclosed the charges using the “best information available” at the time of disclosing the LE. A revised LE must be provided within three general business days of the rate lock date irrespective of whether pricing has improved or deteriorated. In both cases, the tolerances for interest-rate dependent charges will be set based on the terms disclosed reflecting the initial lock. Any reduction in rebate or any increase in discount charges will need to be justified with a valid COC, otherwise that additional cost cannot be passed to the consumer.
Q: Are we required to disclose the Yield Spread Premium (YSP) on Lender Paid transactions?
A: As stated above, the costs on the Loan Estimate must be based on the “best information available” at the time the LE is prepared. If the current price for the rate quoted to the consumer reflects a true credit to the consumer for the interest rate chosen it must be disclosed. However, unlike block two of the Good Faith Estimate, you do not need to offset the Lender Paid Compensation by adding it back into the credit. The broker does not state their Lender Paid Compensation on the LE. Any credit for the interest rate chosen should be disclosed in Lender Credits under “J. Total Closing Costs” of the LE and NOT as a negative number under “A. Origination Charges.”
Q: Who pays the cure for lock-extension costs?
A: Depends on what/who caused the delay. If it is the consumer or other party to the transaction (e.g. Seller) that caused the delay, then it will be a valid COC and a revised LE can be issued meaning the lock extension fee can be passed to the consumer. When there is no valid COC, the lender must cure the increase. We are encouraging our clients to avoid locking loans with a 15 day lock period unless you are locking at the point in which you are obtaining a clear to close.
Loan Estimate- Third Party Loan Cost Settlement Charges (COC)
Q: Can we get the title fees from the title agency listed on the purchase contract and include those on the LE but use the provider we commonly use and quote from on the Settlement Service Provider List (SSPL)?
A: The title agency listed on your Settlement Service Provider List does not necessarily have to be the provider’s fees you disclose on the LE. If the applicant has already selected a different title company than the title/settlement agent you typically use and obtain quotes from, then it is PRMG’s policy that you should quote the fees for the applicant selected provider and list your usual settlement company on the SSPL. You are required to use the “best information available” at the time of disclosing, which means you should disclose the fees for the title/settlement agent the applicant is going to use. Since the borrower decided to go with a different provider than the one listed on your SSPL, the fees by the applicant selected settlement provider would not be subject to any tolerance.
Q: Are Roof Certifications in C or H of the new LE?
A: PRMG does not require an applicant to use a specific roof certification company to complete the roof certification. Nevertheless, it is a required service as a part of the loan (assuming PRMG requested a roof certification), which means it is not a charge that would fall under Section H. A roof certification would be a service the consumer can shop for and depending on whether they choose the provider on the SSPL, will dictate whether the roof certification is subject to 10% tolerance or No tolerance.
Q: If you find out a pest inspection is needed, is that a valid change of circumstance?
A: If you had no knowledge that a pest inspection was going to be needed when you last disclosed an LE, then adding a pest inspection is a valid COC and it would reset the tolerance threshold (if applicable). In the event a pest inspection is required, a revised LE must be provided within three general business days of when it became known a pest inspection was required and a new Settlement Service Provider List (SSPL) must also be revised to include at least one pest inspection company within a reasonable proximity of the subject property address. Depending on whether the consumer chooses the provider on the SSPL, will determine whether this fee will fall under the 10% or No Tolerance category.
Loan Estimate – Zero Tolerance Charges
Q: What about credit report fees?
A: Credit report fees have to be disclosed in LE Section and they are a Zero Tolerance item because we do not permit the consumer to shop for that service provider.
Q: Are we required to disclose a re-inspection fee upfront in the event that a re-inspection is required?
A: If you have reason to believe a re-inspection fee will be required, yes; otherwise, it would be a valid Change of Circumstance (COC)?
Q: If we don’t know whether or not a 1004D is required, how would we disclose the appraisal fee correctly?
A: If it is subsequently realized a 1004D is required because new knowledge was obtained after the initial LE was provided, then this would be a valid COC. However, if at the time of providing the initial LE, the originator SHOULD HAVE KNOWN that a 1004D would be required or the originator made a mistake, then it is not a valid COC. Charges for a 1004D would fall under the zero percent tolerance bucket meaning it cannot increase without a valid COC because it’s a service that is required by the lender but the consumer cannot shop for the provider.
Q: What if you find out that after receiving the first appraisal that a second appraisal is required?
A: As discussed above, generally this would be a valid COC, which means that a revised LE could be provided to the consumer to reset the zero percent tolerance threshold in the amount of the additional appraisal. However, if the intended program from the start of the transaction (or since the last disclosed LE) required a second appraisal and the disclosing party failed to find this in the published guidelines when disclosing the previously issued LE, then this would not be a valid COC.
Q: What section of the Loan Estimate would an HOA Certification fee fall under?
A: Since a consumer is not permitted to shop for a HOA Certification, this fee will fall under “B. Services you [the consumer] Cannot Shop For” on the LE, which also means it will be subject to zero tolerance.
Q: How do we disclose appraisal fees if the property becomes a "historic home" or "rural property" needing extra comps, second appraisal review, third appraisal review, etc.?
A: If we are aware of unique property features at origination, then you need to include those factors in the appraisal order and obtain an accurate fee quote from PRMG’s Appraisal Department. If we are informed of the additional property aspects affecting the appraisal charge later in the process, then there may be a changed circumstance allowing redisclosure. This also holds true for appraisal reviews – if you know up front that a review will be needed, then you need to disclose it in the initial LE. If the underwriter conditions for a review after we receive the appraisal, then we could redisclose the additional fee under a changed circumstance.
Q: If the veteran claims to have never used the VA benefit, but the COE shows differently, is it a valid COC to add the Funding Fee?
A: You want to try to get this one nailed down with your VA applicants in the origination interview. But if they truly tell you they have never used their VA entitlement, and there is not a VA loan on their credit report, but the COE subsequently indicates otherwise, then there could be a valid changed circumstance allowing the redisclosure of the LE for the VA Funding Fee within three general business days after receiving of the COE.
Loan Estimate – No Tolerance Charges
Q: What if the borrower allows the seller to choose the settlement/title agent -- does that count as the consumer shopped their own provider?
A: Since PRMG is not requiring the use of a designated title insurance provider, the consumer is permitted to shop for the provider. The consumer may allow the seller to choose the title company.
Q: What if the consumer is not allowed to shop for title/escrow are you still putting the fees under the section that a Consumer Can Shop For?
A: If the consumer cannot shop for the provider and it is a service required in the loan transaction, then it must always be accurately categorized. As stated above, it is PRMG’s policy that since the broker or PRMG is not requiring the use of a designated title insurance provider, the consumer is permitted to shop for the provider. The consumer may allow the seller to choose the title company. In engaging in these practices please defer to your legal and compliance representatives to ensure they do not violate federal and state laws.
Q: Do we disclose fees for optional services not required by PRMG, like home inspection or home warranty that are paid outside of closing and should never appear on the CD?
A: Yes. Real estate-related charges are disclosed in LE under “H. Other” and no tolerance limit would apply. Final charges are broken down in the CD as Paid At Closing or Paid Before Closing. The TRID Rule does not acknowledge the concept of POC on the LE.
Q: Are prepaid items, such as property taxes, hazard insurance, per diem interest, subject to tolerance limitations:
A: No, increases in those charges are not restricted, although you are still required to estimate them using the “best information available” at the time the LE is issued.
Loan Estimate – Seller Credits
Q: If the seller pays for the owner’s title insurance and one of three transfer taxes, do we need to disclose those on the LE?
A: No. We only disclose settlement charges that the borrower is paying. If you know for a fact that the seller will be paying a settlement cost (e.g., charges specifically allocated to the seller in the purchase contract), then you do not disclose them in the LE (note: This does not apply to a general seller credit that may offset total closing costs for the buyer).
Q: How would we disclose a fee that I know will be wholly or partially paid by the Seller?
A: In continuation of the answer provided to the prior question, if it is agreed that the Seller will pay for a specific fee in its entirety, then the seller paid fee will not appear on the LE but if the seller agrees to pay for a portion of a specific fee, then the amount of seller credit should offset the amount of the fee leaving only the remaining amount to be paid by the borrower. If it is a general seller credit, then the amount will not offset a particular fee and the credit must be included in the “Seller Credit” section under the “Calculating Cash to Close Table.”
Q: I always disclose the full owner’s policy and the full real estate closing fee and then put a seller credit in the amount of the owner’s title policy and the normal ½ of the real estate closing fee. Is this acceptable?
A: If you are applying this as a general rule without knowledge of each party’s agreed to obligations, then this would not satisfy the good faith element of using the “best information available” at the time of disclosing. If you are going to apply a seller credit (see above for detail on how to apply the credit), then you need to make sure that you are disclosing the amount of the seller credit that you know has been agreed to by and between the parties; otherwise, if you are unsure of any seller credits, then you should disclose all fees to the consumer that they would otherwise be responsible for in closing the transaction absent a seller credit. In the event, a seller credit is agreed to after you have provided an LE, then you should make sure that PRMG’s appropriate staff is made aware of the additional seller credit so it is included in a subsequently issued LE or when the CD is provided prior to docs. The addition of a seller credit is not in it of itself a reason to redisclose.
Q: Can we increase our lender credit on the CD from the LE?
A: Yes, we can always increase a Lender Credit. A General Lender Credit (i.e., interest-rate credit) can decrease when the rate is locked, but we cannot decrease a Specific Lender Credit.
Q: There will not be a field for "Lender Cure" vs. "Lender Credit"?
A: No, there is not a “Lender Cure” field in either the LE or the CD. In the LE, we would apply a General Lender Credit to cure a tolerance violation. If we need to cure for a specific fee in its entirety, we would list it as Paid by Other (L) in the CD; otherwise, we would show the cure as a Lender Credit.
Q: Can you clarify what Latitude is? What is the third party company PRMG will use so the title companies can load their fees?
A: Latitude Loan Services offers a communication portal between Lenders and Settlement Agents for purposes of obtaining fee quotes, opening orders and reviewing the Closing Disclosure. PRMG will use Latitude’s portal to confirm final title and settlement charges on the CD with the Settlement Agent.
Q: Can closing documents go to the settlement agent on the same day the CD is sent as long as they are dated 3 days in advance?
A: PRMG will NOT issue closing documents the same day as the CD. PRMG will prepare the closing documents so that docs are ready to send on the third specific business day after the consumer(s) receive the CD.
Q: How will you be able to see if the APR has increased over .125% without a Truth in Lending Statement to determine if a Revised CD must apply a new three specific business day wait?
A: Although there is no longer a TIL, both the Loan Estimate and Closing Disclosure have the stated APR. PRMG’s LOS and most likely any other LOS will provide a screen to look at in order to determine what fees caused the difference in APR. Since PRMG is providing the CD only after the Clear to Close has been issued and if there is sufficient time on the lock to close, there should not be significant movement in the APR after a CD has been issued.
Q: Can a CD be ordered once all Prior to Docs conditions have been submitted?
A: The CD can be ordered but it will NOT be issued until all prior to doc conditions have been cleared in the event something is discovered by the underwriter when reviewing the conditions.
Q: Title companies are prohibited from giving the real estate agent the CD – will PRMG give the real estate agent a copy of the CD?
A: No, we cannot give the real estate agent a copy of the Closing Disclosure, as it contains non- public personal information for the consumer/borrower.
Q: Will the CD be provided by the PRMG closer or the Title Closer/Settlement Agent? What can we do to ensure the seller gets a copy of the CD from Title in order to comply with TRID when the title disclosure to the seller is outside our control?
A: In all cases, PRMG will prepare and provide Closing Disclosure to the Borrower’s CD; the Settlement Agent will issue the Seller’s copy of the CD. The Settlement Agent is required to provide PRMG a copy of the Seller’s CD.
Q: Do escrow/title fees need to be adjusted to match the CD?
A: PRMG’s Closing Dept. will confirm final escrow/settlement/title fees with the Settlement Agent by sending a copy of the CD for review and edit utilizing the Latitude communication portal prior to delivering it to the borrower.
Q: If the CD is sent out at 11:59 p.m., when does the three-business-day wait period start?
A: The Closing Disclosure must be received by the consumer at least three specific business days prior to loan closing. So, if we were to send it out at 11:59 p.m., even electronically, the earliest it could be received by the consumer is likely the next business day, so the wait period would start then (assuming the consumer electronically consents to the package marking a receipt date that next day).
Q: Can you clarify the non-borrowing parties entitled to rescission rights who will need to receive a copy of the CD?
A: The right of rescission applies when a consumer meets both of two criteria on a refinance or home equity loan: (1) the property securing the loan is occupied by the consumer as his/her primary dwelling, and (2) the consumer has an ownership interest in the property.
Simultaneous Issue – Loan Estimate and Closing Disclosure
Q: How do you disclose the fees for a lender’s and owner’s title insurance policy when they are simultaneously issued and the lender’s policy is discounted for the issuance of both policies?
A: Under TRID, the rule specifies how a lender’s and owner’s policy charge must be disclosed on the LE, which may conflict with the states promulgated rules on how a title insurance company is to charge for simultaneously issued premiums. In some states, the borrower receives a discounted rate on the lender’s title insurance policy when the applicant decides to also purchase the owner’s title insurance policy along with it. In following TRID, even in states where this is the case, you must always disclose the full lender’s title policy rate and not the discounted title policy rate for simultaneous issue. Assuming the applicant pays for both policies, this will not impact the cash to close because the owner’s policy will be shown at a reduced rate to cover the difference between the lender’s full title policy rate and the actual lender’s title policy rate reduced for simultaneous issue. The formula adopted by the CFPB for the owner’s title policy fee calculation is as follows: [Owner’s Title Policy Rate] + [Lender’s Title Policy Simultaneous Issue Rate] – [the Disclosed Lender’s Title Policy Full Rate]. Again, by following this formula you are removing the difference between the full lender’s title policy rate as disclosed on the Loan Estimate and the actual lender’s title policy rate reduced for simultaneous issue from the full owner’s premium. Therefore, the net amount disclosed will equal the net amount of actual charges.
A potential issue could arise when the seller has agreed to specifically credit the borrower for the owner’s title policy, which is customary in some areas. The issue is that the actual amount of the owner’s title policy is greater than what must be disclosed on the Loan Estimate and the lender’s title insurance policy is actually less than what must be disclosed on the Loan Estimate. As such, the amount of credit from the seller to specifically purchase the owner’s policy will be greater than the owner’s title policy rate as disclosed on the Loan Estimate. Removing the owner’s title policy from the Loan Estimate because of the specific credit by the seller will not account for the entire amount actually agreed upon by the parties. The CFPB has addressed this issue by stating to the extent that the agreed to amount of a specific seller credit towards the owner’s title policy exceeds the amount disclosed on the Loan Estimate, the difference can either be disclosed as an additional seller credit or you can reduce the lender’s policy rate by that difference. For a specific example of how this is to be done, please revisit PRMG’s Wholesale webinar on TRID.
Wholesale TRID Submission
Q: Are PRMG’s fees to the consumer changing with TRID?
A: At this time, PRMG’s direct fees are NOT changing to the consumer as a result of TRID.
Q: Are any PRMG specific forms changing with TRID?
A: At this time, aside from replacing the GFE, TIL and HUD-1 with the Loan Estimate (LE) and Closing Disclosure (CD), PRMG is NOT changing or removing any forms as a direct result of TRID. PRMG is however in the process of simplifying its TPO submission process, which will result in eliminating PRMG specific forms.
Q: Is there a new submission form?
A: Yes PRMG has released a new submission form that MUST BE SIGNED BY THE BROKER OR ITS REPRESENTATIVE. This form embodies some of PRMG specific disclosures to help simplify and eliminate unnecessary forms in the loan submission process. PRMG has also made the submission form interactive so that it is easier to complete.
Q: Does PRMG have new submission requirements?
A: Yes. PRMG has revised its submission requirements and they will be posted in the PRMG Resource Center.
Q: What documentation will PRMG accept from the settlement/title company as proof of their fees?
A: PRMG will accept an itemization or quote from the settlement agent that outlines the specific fees that the consumer will be responsible for on the transaction. If the broker utilizes services provided by The Closing Corp or other similar services to generate a certified accurate Loan Estimate, then a quote or itemization will not be needed to submit the loan.
Q: Where can we go to access the PRMG Wholesale TRID Webinar?
A: Please reach out to your Account Executive and they will provide you a link to the recorded webinar as well as the webinar materials.
Q: Do Banks and Savings and Loans have to follow the new TRID rules?
A: Yes, federally supervised institutions must follow federal law.
Q: What is a General Business Day?
A: General Business Days are days that the lender is substantially open for business which typically excludes Saturday, Sunday, and Federal Holidays.
Q: What is a Specific Business Day?
A: Are all days except for Sundays and Holidays recognized by the Federal Reserve.