The Answer Depends On State Law Privacy Requirements
Confusion around what information is supposed to be included on the borrower’s Closing Disclosure has some mortgage professionals worried.
In ATS Secured’s webinar, “TRID Still Coming: What You Need to Know” with Richard Horn, former CFPB attorney who led the final rule, these questions came up:
Are the Seller’s Charges Supposed To Be Shown On the Borrower’s CD?
Richard Horn’s Answer:
“The settlement agent is required to provide the seller’s charges to the seller on a Closing Disclosure. That’s a requirement under the rule. So the settlement agent still has a role in the transaction; they are still required to provide the closing disclosure to the seller. There are also provisions for the borrower’s Closing Disclosure that would require some of the seller’s charges to be shown. For example, the prorations between the two parties will be the same, so some of those prorations will be shown on the borrower’s side of the disclosure. Also, the seller credit will be shown on both disclosures.
“With respect to other charges that aren’t necessarily required to be disclosed on the borrower’s disclosure, TRID does not address whether those charges can or can’t be put on the borrower’s Closing Disclosure. It would come down to state law to see whether there are privacy restrictions on settlement agents or creditors sharing the information about the borrower’s and the seller’s transactions.”
Several settlement agents commented that the sample Closing Disclosures in the proposed TRID rule had information from both the borrower and the seller on them, and they said there were state privacy restrictions on sharing such information between the parties.
In response, Horn said:
“The final rule allows the separation of the borrowers’ and sellers’ information in two ways. The creditor and the settlement agent can take the standard Closing Disclosure and leave blanks for the borrower’s or seller’s information on the disclosure to the other party. The rule also provides for a seller-only version of the Closing Disclosure that only includes the information on the closing disclosure that pertains to the seller, so it deletes the borrower’s columns from the closing-cost details and it deletes the borrower’s summaries of transactions table. So there are two options that settlement agents and creditors have to separate the borrower’s and seller’s information.
“To sum it up, the rule would require some of the seller’s information to appear on the borrower’s disclosure, but there’s no requirement under the rule that says ‘yes’ or ‘no’ that it has to or cannot be disclosed on the borrower’s Closing Disclosure. It would come down to state privacy requirements.”
Want to listen to the entire webinar, complete with the rest of the questions and answers? Download it here!
And if you’re interested in how ATS Secured is solving TRID issues and making the mortgage closing process easier and more efficient, contact us today!