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TRID: TILA RESPA Integrated Disclosure
Terms in this set (56)
Initial disclosure that is intended to help consumers compare costs and shop competitively for mortgages
What did the Loan Estimate Replace?
Truth in Lending (TIL) and the Good Faith estimate which served as the initial disclosure that creditors provided to consumers after their submission of a loan app
What did the CLosing Disclosures replace?
Final TIL Disclosure and RESPA's HUD-1 Settlement Statement. These are combined into one form now
What is excluded from the TRID Rule?
Does not apply to HELOCs and Reverse Mortgages, or mortgages secured by a mobile home
What disclosures are used on loans that don't fall under TRID Rule?
HUD-1, TIL, and GFE
When must the Loan Estimate Be delivered to the consumer?
Delivered directly to the consumer or placed in mail no more than 3 business days after the creditor receives the consumer's application and NLT 7 days prior to consummation
When is the Loan Estimate considered to be received by the borrower after being mailed?
Considered received by borrower 3 business days after mailing
How is business day defined?
Every day on which a creditor's offices are open to the public for business. The seven business day period includes all ccalendar days except for Sundays and legal public holidays
What is the purpose for delivery of the Loan Estimate 7 business days prior to consummation?
To create a mandatory waiting period, but can be waived for a bonafide financial emergency which must be submitted via a written statement
A creditor cor any other person can not collect any fees from a loan applicant before they have received the Loan Estimate and indicated intent to proceed with loan transaction
How long must a creditor retain documentation indicating the consumer's intent to proceed?
Creditors have what percentage of tolerance for discrepancies between estimated and actual closing costs if consumers don't pay the creditor or one of its affiliates for settlement services and are allowed to shop for their own services.
What is the tolerance if fees are paid for third party services to the creditor or to an affiliate of the creditor
Zero Tolerance for variances between the estimate and actual charges
Why is there a zero tolerance for error with regard to fees paid to 3rd parties?
Because their amounts should be known. Fees paid to creditors, mortgage borkers, and affiliates are within control of creditors and making an estimate of cost unnecessary
What are examples of charges that may vary from estimated fees?
Property insurance premiums
Amounts placed in an escrow account
Charges paid to third party service providers
Charges paid for third party services not required by the creditor
Revised Loan Estimate
A creditor is required to provide a loan estimate to the borrower if the interest rate changes for a transaction change.
If this causes the charges listed on the loan estimate to increase, or cause the aggregate amount of estimated charges to increase by more than 10%, a creditor may issue a revised Loan Estimat
Change In Eligibility
Change in circumstance impacts the creditworthiness of the applicant or the value of the property securing the loan
Consumer Requested revision
Consumer requests a change that relates to the loan terms or to settlement
delays caused by the consumer
Applicant waits more than 10 business days after the creditor provides a loan estimate before indicating their interest in proceeding
Delays related to Construction Loans
If Creditor reasonably expects settlement to be more than 60 days after providing the applicant with a loan estimate, a revised disclosure can be provided, so long as the original loan estimate clearly and conspicuously states that creditor may issue revised disclosures at any time prior to 60 days before consummation
Within 3 business days of receiving the information that prompted the change
When must creditors provide a revised loan estimate?
revised disclosure be received by the consumer?
No later than 4 business days prior to consummation
What is the % of tolerance for discrepancies between estimated and actual closing costs if consumers don't pay the creditor or one of its affiliates for settlement services and are allowed to shop around for their own service?
Creditors have a 10% tolerance for discrepancy
Page 1 of the loan Estimate
Contains 4 basic sections and address general information including the summary of loan terms, estimated projected payments, and estimated costs at closing
Loan Terms Table
Requires a breakdown of information about the terms of the loan, and the interest listed should be the rate at time of consummation
What is required if the interest rate is adjustable
The fully indexed rate
Projected Payments Table
Creates a space for providing details regarding periodic payments. For fixed this will not change
Costs of CLosing Table
Summarizes the costs that aborrower fwill have to pay at closing
Estimated Closing Costs
Shows the total closing costs for the transaction and is expressed as a dollar amount
Amounts the borrower will pay to each creditor and or loan originator for work performed in the transaction. Origination Fee, points, processing fee, and underwriting fees
Services You can't shop for
Settlement services from a third party provider that the creidotr requires the consumer to use
Services you can shop for
Settlement services provided by a third party that the consumer chooses
Estimated Cash to Close
Section of table estimates the total dollar amount that will be necessary to close
What does Estimated Cash to Close Consist of?
Closing costs to be financed, down payment, any deposits paid to seller or held in escrow, Funds for the borrowers, seller credits, Adjustments and other credits paid by persons other than the loan originator
Provides more detailed information about the loan transaction and itemizes amounts listed more generally on page one, and gives clearer listing of costs and charges for the loan transaction
Loan Costs Table
Itemizes all loan costs associated with the transaction such as:
Services they can't shop for
Services they can shop for
Total Loan Costs
Identifies the creditor and loan originators involved in the transaction
For how long must the creditor disclose the total principal, interest, PMMI and loan costs?
For the first 60 months of the loan term
total Interest Percentage
Amount that the consumer will pay in interest over the life of the loan, expressed as a percentage of the amount of credit extended
When must the closing disclosure be received?
No later than 3 days prior to consummation
When is the disclosure received if mailed?
Considered received 3 business days after the disclosure is placed in the mail
Page 1 of CLosing Disclosure
Advises consumers to compare information contained in the document with that listed on the Loan Estimate
Page Two of Closing Disclosure
Includes detailed tables that list loan costs and other costs
Page 3 of CLosing Dislcosure
Calculating Cash to Close table
Summary of Transactions
- Borrower's transactions
- Sellers transactions
Page 4 of Closing Disclosure
Lists the disclosures that advise the consumer as to whether the loan is assumable and whether it has a demand feature that will permit the creditor to require immediate repayment of the loan balance
Also includes Adjsutable Payment Table
Adjustable interest rate table
Page 5 of CLosing Disclosure
Includes the Loan Calculations which lists the total of payments, Finance Charge, and AMount Financed, APR, and Total Interest Paid
Confirm Receipt Box
Page 5 concludes with the optional use of this which includes a signature line for the borrower to indicate their receipt of closing disclosure
The Business day immediately preceeding Consummation
The review of the partially completed CLosing Disclosure may take place at this time
A change in the APR, Loan Product, and Addition of a prepayment penalty
These result in a new 3 business day waiting period
30 days Period after consummation
If changes occur in the 30 day period after consummation, and these changes cause the closing disclosure to become inaccurate
A corrected Closing Disclosure is required when a change, the discovery of a previously known fact, or unintentional error results in:
Results in inaccuracies in the closing disclosure, and results in difference between the amt actually paid by the consumer and the amount disclosed
30 Day Deadline
Deadline for providing a corrected disclosure when an event occurs that causes the Closing Disclosure to become inaccurate
Refunds excess paid within 60 days of consummation
Delivers or places a corrected closing disclosure in mail showing refund within 60 days after consummation
How long doe the creditor have to refund the borrower If they pay an amount that exceeds either of these tolerances, the amounts listed on the Closing Disclosure will be considered made in good faith if
How long must a creditor retain documentation used to calculate average charges for a class of transactions
No later than the day of Consummatoin
When must the Closing Disclosure be provided to the seller by the settlement agent. They have 30 days to mail a corrected disclosure in the event it is necessary