Below are highlights to the changes by Program

Transcription

1 TRID 2.0 CHANGES - REPAIR ESCROWS AND REHAB LOANS (203K /HOME-STYLE RENOVATION) With the TRID 2.0 changes that became effective for applications on or after Oct 1, 2018, there were changes made to how we disclose the escrows for repairs on both the Loan Estimates and on the Closing Disclosures. These changes will affect the following: 203k and Home-Style Renovation Loans Standard Loans with Escrow Repairs if paid by Borrower Standard Loans with Escrow Repairs if paid by Seller FHA REO with financed repairs The main changes are: Standard Repair Escrows: We will list the Repair Escrow Inspection Fee as a charge to the consumer instead of rolling it into the Repair Escrow line if the borrower has to pay for it. On the Rehab loans where the repairs are escrowed, we no longer will show the repairs, contingency reserves or mortgage payment reserves as Fees on the Loan Estimate. They will be shown as adjustments and other credits Below are highlights to the changes by Program 203k (full and limited) and Home-Style Renovation Loans Repair Escrow, Contingency Escrow and Mortgage Payment Escrows will NO longer be listed in Section H of the Loan Estimate as a fee. In order to balance the LE, those fees will be listed in the Adjustments and Other credits of the LE. You do not have to do anything. Our Disclosure Team/Automation will take care of this for you. These fees will no longer be shown on page 2 of the CD. They will be listed on Page 3, Section K ***I have attached examples of how the max mortgage worksheets, 1003 page 3, LE and CD will look for each of these*** Standard Loans with Escrow Repairs Paid by Borrower The cost of the repairs will not be listed on the LE in section H as a fee; however you will list the inspection fee (Repair Escrow Final Inspection Fee) as a fee on the Loan estimate in section 800 ( lines). ENSURE YOU ARE DISCLOSING THIS FEE NOW SINCE IT IS NOT LUMPED IN WITH THE REPAIR ESCROW You are to input the cost of repairs(not including the inspection fee) on page 3 of the 1003 as a negative number and it will show up as adjustments and other credits on the Loan Estimate The Repair Escrow Fee will no longer be shown on page 2 of the CD. It will be listed on Page 3, Section K

2 1003 LOAN ESTIMATE CLOSING DISCLOSURE PAGE 2

3 Standard Loans with Escrow Repairs Paid By Seller If there is a repair escrow where the seller is paying, do not list the repairs or the repair escrow fee on the Loan Estimate at all If the seller will NOT be paying for the inspection fee done after the repairs are completed, you must enter this as a FEE on the Loan Estimate- lines (Repair Escrow Final Inspection Fee) We will show the repair escrow on page 3 of the CD as a charge (with a corresponding credit from the seller)- Section K and Section L The Repair Escrow Final inspection fee will be listed on page 2 of the CD as a fee LOAN ESTIMATE(If borrower has to pay the inspection fee)

4 CLOSING DISCLOSURE PAGE 2(IF BORROWER HAS TO PAY THE REPAIR INSPECTION FEE ) FHA 203b with Repair Escrow The cost of the repairs will not be listed on the LE in section H as a fee; however you will list the inspection fee (Repair Escrow Final Inspection Fee) as a fee on the Loan estimate in section 800 You will input the financed repairs (including the repair escrow final inspection fee) in the alterations on page 3 of the 1003 You will need to lock down the Estimated closing costs and subtract the repair escrow final inspection fee from the total In order to balance the LE, the Disclosure desk team will list the repair escrow (less the inspection fee) on the adjustments and other credits section of the LE. The Repair Escrow Fee will no longer be shown on page 2 of the CD. It will be listed on Page 3, Section K The Repair Escrow final inspection fee will be listed on page 2 of the CD as a fee 1003 PAGE 3

5 LOAN ESTIMATE CLOSING DISCLOSURE PAGE 2 If you have any questions, please let me know. Thanks All