Richard Horn, former CFPB Senior Counsel and Special Advisor, spoke today at our webinar, “TRID Still Coming: What You Need to Know.” Horn, an expert on everything TRID, helped lead the final rule during his time at the CFPB.
TRID Webinar Highlights
Horn indicated that the recent delay will at the earliest be effective August 15, 2015. The CFPB proposed a delay to Oct 3, 2015. This was due to administrative error and concerns about delayed technology updates. Comments about this delay are due July 7, 2015.
TRID “Black Hole” Possible
Horn outlined the details of TRID itself, including the revised definition of a Loan Application and the guidelines for providing the new Loan Estimate (LE) and Closing Disclosure (CD). He explained that if there are any changed circumstances on the CD, there is a potential “black hole” that could open up as an additional three-business day waiting period is required if:
– The annual percentage rate becomes inaccurate (1/8 of a percent for regular or 1/4 for irregular loans);
– The loan product information changes; or
– A prepayment penalty is added.
Creditor is Responsible for Closing Disclosure
The creditor is ultimately responsible for providing the CD. This includes the HUD-1 information for which the settlement agent was previously responsible. The Settlement agent may provide the CD, but the creditor is still ultimately liable.
TRID Tolerance Levels
Horn warned the industry that lenders will be subject to stricter tolerances. These are listed below:
– 0% Tolerance Category:
• Fees paid to the creditor, a mortgage broker
• Affiliates of the creditor or mortgage broker
• Third-party services for which the consumer cannot shop
• Transfer taxes
– 10% Category (aggregate amount):
• Services for which the consumer can shop, but selects a provider on the written list of providers
• Recording fees
– No Tolerance Limitation
• Services not required by the creditor (including Owner’s Title)
• Prepaid interest
• Property insurance premiums
• Amounts placed into an escrow, impound, reserve, or similar account
• Changed circumstances – 0%/10%
• Borrower requested changes
• Provide revised LE within three business days of the change
• Final rule amendment: Rate lock changes also have three business day period
There are additional levels of risk beyond the tolerance level changes. TILA Liability includes potential civil liability/private right of action (borrower lawsuits) and potential assignee liability for investors. The CFPB states that determination of liability is up to the courts, and that the preamble discussion of the statutory authority used for each provision provides sufficient guidance for industry, consumers, and the courts regarding liability.
Lastly, Horn went over the CFPB Enforcement and Civil Money Penalties, which can be up to $1,000,000 per day for knowing violations.
TRID Solutions Are Vital For Mortgage Companies
Sixty more days isn’t as long as it might seem, or as safe. TRID is still coming and it will still be dangerous for those mortgage companies not in compliance. See how ATS Secured can help you be compliant with our audit trail tracking software and complete TRID solution.
ATS Secured is the only verified financial network that brings together all parties involved in the home buying process in a secure, transparent environment.
Interested in learning more from this webinar? Download the full webinar, complete with Q&As, today!