- TRID has caused a ton of headaches for lenders, agents and consumers alike since its implementation on October 3, 2015.
- The Consumer Financial Protection Bureau started a webinar series that breaks down TRID into understandable chunks, which they hope will make implementation easier.
- The latest webinar answered questions about Loan Estimate and Closing Disclosure forms.
Today, the Consumer Financial Protection Bureau hosted its latest webinar on the TILA-RESPA Integrated Disclosure process, which is better known as TRID.
Since its implementation on October 3, 2015, TRID has caused many headaches for brokerages, agents, lenders and consumers alike as they navigate the new Loan Estimate and Closing Disclosure forms, and the three business day window for consumers to review those forms before moving ahead.
In an attempt to alleviate frustrations and make implementation easier, the CFPB has hosted a number of webinars that cover a general overview of the rule, frequently asked questions, the loan estimate and closing disclosure forms, implementation challenges and construction lending.
Their latest webinar focused on the interpretation and implementation of the rule’s requirements, specifically pertaining to the nuances surrounding Loan Estimate and Closing Disclosure forms.
Here’s a snapshot of some of the agent-centric issues addressed in yesterday’s webinar.
Does the rule require that both the consumer and the seller receive a Closing Disclosure?
Yes. The creditor must provide the consumer with the Closing Disclosure form that reflects the actual terms of the transaction. Moreover, the settlement agent must provide the seller with a copy of the closing disclosure as it also contains information about the seller’s transaction.
But, the role of Ford’s flexibility does not require the settlement agent to provide the same disclosure to the seller as they do to the consumer. The agent may provide a consumer with a disclosure that leaves out certain seller information.
When a separate disclosure is provided to the seller, is the settlement agent required to provide the creditor with a copy of the seller’s Closing Disclosure?
Yes. When the consumer and seller’s disclosures are provided on separate documents, the settlement agent must give the creditor a copy of the disclosures given to the seller.
This goes in hand with record retention requirements where creditors must keep a copy of the closing disclosure for five years after consummation or in the event the mortgage is sold or transferred to include the closing disclosure as part of the loan file to the owner or servicer.
When a separate disclosure is provided to the seller, what information is required to be disclosed on the seller’s Closing Disclosure?
The contact information for real estate brokers and settlement agents, loan costs, other costs paid by the seller before or at closing must be disclosed.
When a separate disclosure is provided to the seller, must seller-paid loan costs and other costs be included on page 2 of the consumer’s Closing Disclosure?
Yes. Seller-paid loan costs and other costs must be included regardless of whether a separate closing disclosure is provided to the seller. But, there are some costs that are not required to be disclosed to the consumer. They are:
- The summary of the seller’s transaction, which includes an itemization of amounts due to and from the seller
- The calculation of the seller’s transaction.
- Items paid outside of closing costs.
When it comes to providing the seller with a copy of the disclosure, the summary of the borrower’s transaction, which includes loan costs and other costs paid by the borrower are not required to be disclosed.
On the other hand, seller paid loan costs and other costs cannot be omitted.
When separate disclosures are provided to the consumer and the seller, must seller-paid real estate commissions be included on page 2 of the consumer’s Closing Disclosure?
Yes. Real estate commissions are an example of seller paid costs that cannot be omitted in the Closing Disclosure. Any real estate brokerage fees, homeowner’s or condominium association charges paid at consummation, home warranties, inspection fees and other fees that are part of the real estate closing but not required by the creditor or not disclosed elsewhere must be disclosed.