TILA RESPA Integrated Disclosure (TRID) Doing Business with NewLeaf

Transcription

1 TILA RESPA Integrated Disclosure (TRID) Doing Business with NewLeaf Presented By Marti Tromley EVP, Chief Risk Officer The information contained herein is intended as informational material for the sole and exclusive use of the business entities to which it was distributed and is subject to change without written notice. 1

2 Loan Application A loan application is defined as receipt of the following 6 trigger items: Use the acronym ALIENS to remember the trigger items. Address Loan Amount Income Estimated Value Name of Borrower Social Security Number Previously Lender s were allowed to identify a 7 th trigger item but that option is no longer allowed. 2

3 Pre-Application/Pre-Approvals Prior to receiving the 6 specific items of information for an application, loan originators may provide consumers with written estimates, but any preapplication written estimate must contain a disclaimer that it is Not an Official Loan Estimate Loan Originators may NOT require Borrowers to submit supporting documentation (e.g. income, assets, etc.) prior to the Borrower s receipt of the LE and the indication of their Intent to Proceed (ITP) with the transaction. 3

4 Loan Application If a Loan Originator takes an application online, over the phone, on a piece of scrap paper, the Borrower must be given the LE within 3 general business days of the application date. The Lender or Mortgage Broker must provide the LE within those 3 general business days of the loan application date NewLeaf will provide the Loan Estimate and the Intent to Proceed to the Borrower 4

5 The Loan Estimate: 3 Easy Steps Submitting a Loan File: Keeping it Simple Broker: Within 1 day of loan application NewLeaf: Within 2 days of Broker Registration Broker: Upon receipt of Borrower s Intent to Proceed Register the Loan: 1. Upload the 3.2 File 2. Click on Register 3. Upload documents: - Submission Form - Fee Sheet with quotes from Title and Settlement Agents - Complete 1003 signed by Loan Officer Issue a Loan Estimate and other required lender Initial Disclosures to the Borrower(s). A copy of the LE will also be sent to the Broker Order the Appraisal Continue to use the TPO website for Product & Pricing and DU. When ready, upload loan file package and click on submit 5

6 Loan Estimate: 3 Easy Steps Initial Disclosures Broker is still responsible for sending their state specific disclosures to the borrower within three business days of the Loan Application. This includes the new Home Loan Toolkit and Anti-Steering Disclosure 6

7 Intent to Proceed Intent to proceed may be delivered In writing Borrower signs Intent to Proceed form Verbally Loan Officer signs attestation of borrower s verbal intent to proceed Required BEFORE you collect credit card info or check for anything other than credit report and BEFORE you order the appraisal 7

8 Imposing Fees The Loan Originator may not impose fees on a Borrower except for a reasonable fee for the credit report before the Borrower has Received the LE, AND Indicated an Intent to Proceed with the transaction 8

9 Imposing Fees Borrower must receive the LE & indicate Intent to Proceed before fees are imposed (except for Credit Report) Appraisals cannot be ordered until the Borrower has received the LE and indicated an Intent to Proceed, regardless of who is paying Cannot take the Borrower s credit card number Cannot have the Loan Originator pay Cannot take a post dated check Cannot reflect as paid thru close 9

10 Business Days Definition Is any day the lender is open to the public for carrying out substantially all of its business functions. The broker must follow the lender s business days. NewLeaf s business days are Monday- Friday, excluding company and legal holidays. Is all calendar days except Sundays and legal holidays. Used for calculation of rescission, borrower receipt of initial and redisclosure of LE, cooling off period for some CD re-disclosure Used to determine when LE must be issued 10

11 Consummation Definition Consummation occurs when the Borrower becomes contractually obligated to the Lender on the loan, as determined by state law. In all states, NewLeaf has determined that consummation occurs when the Borrower signs closing documents. 11

12 Delivery Methods Definition Two delivery types categories Delivered In Person Face to face delivery Borrower received same day LE (or CD) is generated Placed in the Mail USPS Electronic delivery (E-consent required first) Overnight Follow the Mailbox rule 12

13 Mailbox Rule Definition The mailbox rule states that Borrower receipt occurs 3 specific business days after the LE and/or CD are placed in the mail. Evidence of early delivery for mail delivery methods may be relied upon when acknowledgement of receipt from the Borrower occurs prior to the 3 rd specific business day (e.g. electronic signature, signed overnight delivery receipt by Borrower). Applies with all LE and CD deliveries. 13

14 Loan Estimate Delivery Best Practice for Faster Process To ensure the quickest process possible, make sure your borrowers conduct their loan process electronically Obtain their address on the application Prepare them to econsent Prepare them to respond promptly to edisclosures 14

15 Loan Estimate and Closing Disclosure 3 days Loan Estimate Timing and Waiting Periods 7 days Loan Estimate 4 days Loan Estimate 3 days Closing Disclosure LE must be sent within 3 general business days after the Mortgage Broker receives the application Revised LE must be sent within 3 general business days of receiving info that would cause the revision Initial LE must be delivered to the Borrower or placed in the mail no later than 7 specific business days prior to consummation LE must be received by the Borrower no later than 4 specific business days prior to consummation Add 3 specific business days if mailing Closing Disclosure must be received 3 specific business days prior to Consummation Add 3 specific business days if mailing Applies to redisclosure of CD in certain circumstances CD can be used in lieu of the last issued LE when loan is just about ready for docs 15

16 Timing of delivery (CD) 16

17 Good Faith Disclosure of Fees What is Good Faith?? CFPB expects that a Good Faith effort has been made when disclosing fees on the Loan Estimate. Good Faith It is expected that fees disclosed are based on the best information reasonably available at the time they are disclosed. 17

18 Tolerances 3 Tolerance Categories (calculated from initial Loan Estimate) Zero Tolerance 10% Tolerance No Tolerance Zero tolerance (cannot increase at closing) 10% cumulative tolerance (category may not increase more than 10% at closing No tolerance (fees may increase at closing, subject to good faith requirement) 18

19 Zero Tolerance/Variance Charges that cannot increase Charges paid to the Lender or Mortgage Broker or their Affiliates Transfer taxes Charges paid to 3 rd party service providers for which the Borrower was not permitted to shop Appraisal Credit report BIG HOA Cert CHANGE Subordinations UFMIP Third party processing co. 19

20 Appraisal Fees Ask questions about the Property at application Is the estimated value > $1M Is the property located in a resort area? Is the property waterfront? Is it remote or rural? Does it have large acreage and site size? Is the property atypical for the area? Is the construction historic or unique? Ask at the time of application PRIOR to the Loan Estimate Request appraisal fee quote from appraisal@newleafwholesale.com if property appears complex 20

21 10% Tolerance/Variance Cumulative charges that can increase by >10% Recording Fees Fees paid to 3 rd party As long as charges are not being paid to a Lender, Mortgage Broker or their Affiliates Borrower selects a 3 rd party service provider from the Lender s list of service providers even though the Borrower is free to shop for their own provider Decreases do not trigger a revision 21

22 No Tolerance/Variance May exceed by any amount Prepaid interest Escrows and prepaids Property insurance premiums Lender required services for which the Borrower selects a third party provider who is not on the Lender s list Charges paid for 3 rd party service or services not required by the Lender, even if paid to affiliates 22

23 Loan Estimate Revisions Valid Change of Circumstance A revised Loan Estimate is permitted to provided the Borrower under the following valid changed circumstances (COC): 1. An extraordinary event beyond the control of any interested party 2. Information specific to the Borrower or transaction that Broker/Lender relied on when providing the LE became inaccurate or changed 3. Information specific to the Borrower or transaction that Broker/Lender did not rely on when providing the LE 4. Changed circumstance that affects the Borrower s creditworthiness or the value of the subject property and results in the consumer being ineligible for an estimated loan term previously disclosed 5. When rate is locked after initial LE has been issued to the Borrower 6. Borrower s Intent to Proceed received after 10 calendar days of being delivered or placed in the mail 7. Delayed Settlement (>60 calendar days) on Construction Loans 23

24 Loan Estimate Revisions Change of Circumstance Similar to current policy, a revised LE must be provided to the Borrower within 3 general business days of receiving new information that would cause a revision Broker must notify NewLeaf immediately of any COC MDIA events no longer apply. There are no longer any 3 day waiting periods on revised LEs 24

25 Closing Disclosure Form Delivery requirements 3 days CD must be delivered to the Borrower 3 specific business days before consummation. Add another 3 specific business days when placed in the mail. CD can be used in lieu of the last issued LE when loan is just about ready for docs 25

26 Closing Disclosure Highlights The Lender is solely responsible for the accuracy and delivery of CD and will provide to the borrower Settlement Agent will provide the CD to the Seller (must be delivered no later than the day of consummation) Reflects Broker Compensation Requires Lender, Mortgage Broker, Buyer and Selling Agent contact information CD must be given to each Consumer on rescindable transactions (title only individuals) Reflects Real Estate Agent Commission 26

27 Closing Disclosure Revisions Changes Before Consummation New 3 specific business day WAITING PERIOD required when there is a CD revision as follows: Disclosed APR becomes inaccurate (increase of APR by an.125% or greater on most loans &.250% on irregular payment or periods) Loan product changes (e.g. fixed to arm basically any rate or payment feature) Prepayment penalty is added For any other changes a revised CD must be provided at or before consummation 27

28 What about the Settlement Agent? Settlement Agent (SA) will provide the CD to the Seller Must be delivered no later than consummation date NewLeaf must receive a signed Seller copy SA will provide the CD to the Real Estate Agents SA will still utilize a transactional Closing Statement Not regulated Will vary from agent to agent Will help to communicate the actual fees charged on a transaction Coordination with the Settlement Agent early in the process is key 28

29 Title Insurance Premiums TRID Regulations require INACCURATE disclosure of Title insurance premiums CFPB requires that full policy fee be shown on the LE and CD regardless of any discounted rate CFPB allows the Owner s Title Policy fee to be shown as a lower rate than the actual rate 29

30 Initial Registration Process Applications taken prior to October 3, 2015 Applications taken prior to October 3, 2015 will follow the current process Brokers will issue their initial disclosures, including the TIL and GFE NewLeaf will accept the loan submissions under the old process and continue to re-disclose and close with the GFE, TIL and HUD-1. 30

31 Initial Registration Process Applications taken after October 3, 2015 Applications taken on or after 10/3/2015 must uploaded be uploaded to the NewLeaf portal prior to 5pm PT one (1) business day after the application date. This will include: Upload 3.2 file Upload the following documents NewLeaf Submission Form 1003 signed and dated by Loan Officer Fee Sheet with supporting quotes from Title and Settlement agents 31

32 Initial Registration Process Applications taken after October 3, 2015 NewLeaf will deliver the LE to the borrower by Midnight of the 2 nd business day after the registration file is submitted by the broker. LE will have name of both broker and NewLeaf A copy of the LE will be ed to the broker and to the portal Brokers must continue to issue all state disclosures as required. The broker may include a copy of the LE generated by NewLeaf with their disclosures. 32

33 Intent to Proceed Intent to Proceed Intent to proceed may be received by Broker or NewLeaf. NewLeaf will inform Broker immediately upon receipt of borrower s signed Intent to Proceed If Broker receives intent to proceed, Broker will upload into portal At no time may the intent to proceed be dated prior to the date the LE was determined to be delivered to the borrower 33

34 Ordering the Appraisal Upon receipt of the borrowers intent to proceed, the broker may order the appraisal and collect from the borrower any fees necessary for the transaction. The process to order the appraisal has not changed. The signed intent to proceed must be uploaded to LenderX 34

35 Demo Laura Alatriste Wholesale Support The information contained herein is intended as informational material for the sole and exclusive use of the business entities to which it was distributed and is subject to change without written notice. 35

36 Steps for Success Getting it Right Encourage your borrowers to conduct the loan transaction electronically. This will create a smoother process and avoid unnecessary delays Counsel them to econsent with NewLeaf immediately upon receipt of request Encourage them to promptly open/esign any electronic disclosures sent by NewLeaf Take the time to get your fees right More zero tolerance fees Be thorough Know your transaction and what fees should apply Fees must be made in good faith. Can t just overestimate to be safe 36

37 Steps for Success Getting it Right Set proper expectations for your borrowers and realtors Expect some delays initially as the industry figures out the new process Understand the delivery and wait periods that apply to the Loan Estimate and Closing Disclosure Identify your estimated closing date at application Work with Closing Agents who get it and are prepared for TRID Notify NewLeaf immediately upon receipt of info that affects a Changed Circumstance 37

38 Steps for Success Getting it Right Most Importantly With NewLeaf With your borrowers With your service providers With your realtors 38

39 NewLeaf Wholesale and Mortgage Brokers Partnership for Success The changes with TRID may seem like a puzzle. Working as partners will result in success for all. Ask questions Give us your feedback NewLeaf is open to ideas to make the process work for all 39

40 Thank You! The information contained herein is intended as informational material for the sole and exclusive use of the business entities to which it was distributed and is subject to change without written notice. 40