TRID Rule Purchase For Applications dated on or after 10/3/2015

Transcription

1 Fr Applicatins dated n r after 10/3/2015 This dcument prvides a brief verview f the TRID Rule s requirements and specifies the purchase requirements fr CMG Mrtgage, Inc., dba CMG Financial, (CMG). CMG Financial Crrespndents are respnsible fr ensuring cmpliance with the TRID Rule and all related laws and regulatins. TRID Rule Overview Backgrund: The Ddd-Frank Wall Street Refrm Act charged the Cnsumer Financial Prtectin Bureau (CFPB) with integrating the mrtgage lending rules regarding mrtgage lan disclsures that applied under the Real Estate Settlement Prcedures Act (RESPA) and the Truth in Lending Act (TILA). This resulted in the creatin f the TILA and RESPA Integrated Disclsure Rule (TRID Rule), als knwn as the Knw Befre Yu Owe mrtgage initiative. The final rule applies t mst clsed-end cnsumer mrtgages. It des nt apply t hme equity lines f credit, reverse mrtgages, mrtgages secured by mbile hmes r dwelling nt attached t real prperty, and creditrs wh make five r fewer mrtgages a year. The primary result f the TRID Rule is the frmal establishment f new disclsures that must be prvided t cnsumers at applicatin and clsing: the Lan Estimate and Clsing Disclsure. Other changes under the TRID Rule include an updated applicatin definitin, predisclsure restrictins (e.g. fee cllectin, verificatin dcuments), definitin f the zer and 10% tlerance fees, and the waiting perid after receipt f the Clsing Disclsure. Effective Date: The TRID Rule must be implemented fr new applicatins dated n r after Octber 3, Available Resurces: The CFPB has made several resurces available n their website, including a Cmpliance Guide, a Guide t Frms, sample frms, and vides t address implementatin f the TRID Rule: The CFPB als prvides Regulatin Z in an electrnic frmat allwing fr easier navigatin: CMG Financial s Crrespndent Seller Resurces website: Lan Estimate: The Lan Estimate cmbines the Gd Faith Estimate (GFE) and the initial Truth-in-Lending (TIL) disclsure int ne disclsure. In additin, the Servicing Disclsure Statement required under RESPA and the Ntice f the Right t Receive an Appraisal required under ECOA are nw included n the Lan Estimate. Clsing Disclsure: The Clsing Disclsure cmbines the HUD-1/1A Settlement Statement (HUD-1) and the final Truth-in-Lending (TIL) disclsure int ne disclsure. Revised: March 22, 2016 Page 1 f 8

2 Fr Applicatins dated n r after 10/3/2015 Lan Estimate Overview and CMG Purchase Requirements Applicatin Definitin: Fr the purpses f the Lan Estimate (LE) delivery timing, the CFPB defines applicatin as the submissin f a cnsumer s financial infrmatin fr the purpses f btaining an extensin f credit, which cnsists f the fllwing six pieces f infrmatin: 1. Cnsumer s Name 2. Cnsumer s Stated Incme 3. Cnsumer s Scial Security Number 4. Prperty Address 5. Estimate f the Value f the Prperty 6. Mrtgage Lan Amunt Sught LE Delivery: Under the TRID Rule, the LE must be delivered t the cnsumer within three general business days fllwing the day the creditr receives the cnsumer s cmplete applicatin. The initial LE must be received by the cnsumer at least seven specific business days befre cnsummatin. A revised LE must be prvided within three general business days f a valid changed circumstance that resets the tlerance baseline if the cst is being passed n t the cnsumer. A revised LE must be delivered within three general business days f the rate lck date (including rate lck extensins and re-lcks). A revised LE must be received 4 specific business days befre cnsummatin. The initial Clsing Disclsure may be issued fr a changed circumstance nly if it is less than fur specific business days befre cnsummatin. Once the Clsing Disclsure has been issued, n further revised LEs may be issued. Business Day Definitin: General business days are defined as days in which the lender s ffices are pen t the public fr carrying ut substantially all f its business functins except Sundays and legal public hlidays. The general business day definitin is used t determine the perid t issue an initial r revised LE. Specific business days are defined as all days except Sundays and legal public hlidays. The specific business day definitin is used t determine the waiting perids applicable t the LE and CD, the deadline fr a cnsumer t receive a revised LE, and the mailbx rule. LE Signature Requirements: CMG Financial des nt require LEs t be signed. Signatures can used t evidence receipt f the LE. Revised: March 22, 2016 Page 2 f 8

3 Fr Applicatins dated n r after 10/3/2015 LE Changed Circumstance Dcumentatin: CMG Financial Crrespndents are respnsible fr establishing prcesses t dcument valid changed circumstances assciated with the issuance f revised LEs, including the rate lck date. A cmplete dcumentatin histry and explanatin fr each changed circumstance must be prvided fr all changed circumstances and assciated revised LEs in rder t be cnsidered fr purchase by CMG Financial. Pre-Disclsure Restrictins: Fees cannt be impsed n a cnsumer in cnnectin with the cnsumer's applicatin fr a mrtgage transactin (ther than a reasnable fee t btain a credit reprt) until the cnsumer has received the Lan Estimate and indicated an intent t prceed. This prhibitin includes requiring cnsumers t prvide a methd fr payment, such as a check r a credit card number, even if the payment is nt made at that time. Appraisals may nt be rdered until the cnsumer has received the LE and indicated an intent t prceed as this actin results in an appraisal fee being impsed n the cnsumer. A creditr may nt require the cnsumer t submit dcuments verifying infrmatin related t the cnsumer s applicatin until the LE has been prvided t the cnsumer. When a cnsumer requests a preapprval, the creditr may request verificatin dcuments frm the cnsumer. Creditrs are respnsible fr having prcesses in place t dcument the cnsumer s intent t prceed and that n fee was impsed ther than the reasnable credit reprt fee prir t cnsumer s receipt f the LE and intent t prceed. This dcumentatin must be prvided t CMG Financial in rder t be cnsidered fr purchase. Written List f Service Prviders: In additin t the LE, if the cnsumer is permitted t shp fr a settlement service, the creditr must prvide the cnsumer with a written list identifying available prviders f settlement services fr which the cnsumer can shp. This written list f service prviders must be prvided within three business days f the cnsumer s applicatin and the list must identify at least ne available settlement service prvider fr each service and state that the cnsumer may chse a different prvider f that service. Other Cnsideratins Sectin f the LE: The Servicing Disclsure Statement required under RESPA and the Ntice f the Right t Receive an Appraisal required under ECOA are nw included n the Lan Estimate and n lnger need t be disclsed separately. Revised: March 22, 2016 Page 3 f 8

4 Fr Applicatins dated n r after 10/3/2015 Special Infrmatin Bklet: Creditrs must prvide a cpy f the CFPB s special infrmatin bklet titled Yur Hme Lan Tlkit t cnsumers wh apply fr a cnsumer credit transactin secured by real prperty fr the purpse f purchasing a ne-t-fur family residential prperty. Creditrs must deliver r place in the mail the special infrmatin bklet nt later than three business days after receiving the cnsumer s applicatin. CMG Financial Crrespndents are respnsible fr establishing prcesses t dcument delivery f the special infrmatin bklet t the cnsumer. Recrd Retentin: The TRID Rule requires that each cmpleted LE and supprting dcumentatin be retained fr three years after the later f the date f cnsummatin, the date disclsures are required t be made, r the date the actin is required t be taken. Required LE Dcumentatin fr Purchase Review: Signed Initial All LEs prvided t the cnsumer with fees listed alphabetically with the exceptin f the hard-cded lines. Fr LEs electrnically delivered in an E-Sign cmpliant manner, a cnsumer signed E- Delivery cnsent frm with dcumentatin t prve electrnic delivery and receipt f LE. All changed circumstance dcumentatin assciated with the issuance f revised LEs r the reset f baselines. Evidence f the Cnsumer s Intent t Prceed. The frmat f this dcumentatin may vary, such as an r letter frm the cnsumer(s), Lan Officer, r staff ntes regarding the cnversatin with the cnsumer(s) instructing yu t prceed, r yur wn cmpany s intent t prceed frm, etc. All dcumentatin must shw the exact date the intent t prceed ccurred. Evidence that n fee was impsed ther than the reasnable credit reprt fee prir t cnsumer s receipt f the LE and intent t prceed. The frmat f this dcumentatin may vary, such as an , letter, r frm signed by the cnsumer(s) stating the exact date that they were charged fees prir t the lan clsing date. T ensure cmpliance with the TRID Rule regarding the assessment f fees, the date(s) the cnsumer(s) received the initial LE and prvided their intent t prceed will be cmpared t the date(s) that any fees were charged prir t cnsummatin. Written List f Service Prviders Evidence f Lck Date (and extensin, when applicable) The Purchase Review may result in the need fr the CMG Financial Crrespndent t supply additinal dcumentatin. Revised: March 22, 2016 Page 4 f 8

5 Fr Applicatins dated n r after 10/3/2015 Clsing Disclsure Overview and CMG Purchase Requirements CD Preparatin and Delivery: CMG Financial will accept CDs prepared by the creditr r the Settlement Agent. The CD must be received by the cnsumer n later than three specific business days befre cnsummatin f the lan. (Business Days are defined in the Lan Estimate Overview sectin.) If the terms r csts f the transactin change prir t cnsummatin, a revised CD must be prvided. If ne f the fllwing ccurs after delivery f the CD and befre cnsummatin, the creditr must prvide a revised CD cntaining all changed terms and impse a new three specific business day waiting perid befre cnsummatin: The APR changes by mre than.125% (.250% fr an irregular transactin). The APR decreasing ver tlerance des nt trigger a new waiting perid if the decrease is slely due t verstated finance charges. Lan prduct change (e.g. Fixed t ARM). Additin f a prepayment penalty (CMG des nt purchase lans with prepayment penalties). If changes are made that d nt fall int the three categries abve, n additinal waiting perid is required, hwever the creditr must ensure the cnsumer receives the revised CD at r befre cnsummatin. The revised CD must remain within the baseline tlerances as established by the final LE r the initial CD if it was permissible t disclse a changed circumstance n the initial CD due t being less than fur specific business days t cnsummatin. Any increase in cst abve the final LE r Initial CD baseline tlerances must be cured by the creditr. The nly exceptin t this cure requirement is fr increases t csts directly assciated with a rate lck extensin (r re-lck) r a lan amunt change. CD Changed Circumstance Dcumentatin: CMG s Definitin f Cnsummatin: CMG Financial Crrespndents are respnsible fr establishing prcesses t dcument valid changed circumstances assciated with the issuance f revised CDs. Cnsummatin means the time that a cnsumer becmes cntractually bligated n a credit transactin, which CMG has defined as the date the Nte is signed. The Clsing Date disclsed n the CD is cnsidered the cnsummatin date. Therefre, the assessment f required waiting perids under TRID Rule will use the Clsing Date as the pint f reference. Revised: March 22, 2016 Page 5 f 8

6 Fr Applicatins dated n r after 10/3/2015 CD Signature Requirements: CMG Financial will require the CD t be signed and dated by all cnsumers at clsing. Initial and revised CDs are nt required t be signed. While the CD des nt cntain a line fr the seller s signature, creditrs are permitted t use a separate page (i.e. an addendum) fr seller signatures. CMG Financial Crrespndents are required t submit this separate addendum cntaining the seller s signature alng with the cnsumer signed CD. Fr rescindable transactins, each cnsumer that has a right t rescind must sign and date the CD. Nte: The CD signature requirements are based n agency and investr requirements. Seller s CD: The settlement agent must prvide the seller(s) its cpy f the CD n r befre the date/time the cnsumer signs their clsing dcuments. The seller s CD must be signed and dated by all sellers at clsing. If all required seller infrmatin is disclsed n the cnsumer s CD, a separate seller s CD is nt required. Pst Cnsummatin Changed Circumstances: If within 30 calendar days fllwing cnsummatin an event in cnnectin with the settlement f the transactin causes the CD t becme inaccurate and this inaccuracy results in a change t the amunt already paid by the cnsumer, a crrected CD must be sent t the cnsumer within 30 days after receiving the infrmatin. (Example: Recrding fee amunt changes.) If nn-numeric clerical errrs are fund, then a crrected CD must be sent t the cnsumer n later than 60 days after cnsummatin. (Example: Payee name was inaccurate.) If amunts paid by the cnsumer exceed the tlerance baseline, the creditr must refund the excess amunt n later than 60 days after cnsummatin the cnsumer must actually receive the refund check by this deadline. The creditr must als deliver a crrected CD n later than 60 days after cnsummatin. Recrd Retentin: Each cmpleted CD and supprting dcumentatin must be retained fr five years after cnsummatin. Revised: March 22, 2016 Page 6 f 8

7 Fr Applicatins dated n r after 10/3/2015 Required CD Dcumentatin fr Purchase Review: All CDs prvided t the cnsumer, including the CD signed and dated at clsing, with fees listed alphabetically with the exceptin f hard-cded lines. Fr CDs electrnically delivered in an E-Sign cmpliant manner, a cnsumer signed E- Delivery cnsent frm with dcumentatin t prve electrnic delivery and receipt f CD. On rescindable transactins, a signed CD fr each cnsumer that has the right t rescind. On purchase transactins, evidence that the settlement agent prvided the seller s CD befre the date/time the cnsumer signed their clsing dcuments and the seller s CD signed and dated by all sellers at clsing. All CDs prvided t cnsumers after cnsummatin. The Purchase Review may result in the need fr the CMG Financial Crrespndent t supply additinal dcumentatin. General TRID Rule Crrespndent Purchase Requirements Acceptable Disclsure Usage: Regardless f delivery date t CMG Financial, lans with applicatin dates prir t 10/3/2015 must use the GFE, HUD-1, and TIL frm and cmply with RESPA and TILA requirements. The LE and CD frms cannt be used fr these lans. Creditr riginatins with applicatin dates n r after 10/3/2015 must use the LE and CD frms and cmply with TRID Rule requirements. The GFE, HUD, and TIL frms cannt be used fr these lans. Delivery Methd and Receipt f LEs and CDs: Required evidence t prve receipt f LEs and CDs is dependent n the delivery methd: US Mail Delivery: CMG Financial will cnsider the cnsumer t have received the disclsures three business days after the Date Issued n the disclsure. In Persn Delivery r Fax Delivery: Disclsures delivered In Persn r via fax will be cnsidered received by the cnsumer(s) n the date that the disclsure is signed and dated. Electrnic Delivery: Creditrs may deliver disclsures electrnically in a manner that is cmpliant with the Electrnic Signatures in Glbal and Natinal Cmmerce Act (E- Sign). Electrnic delivery requires a cnsumer signed E-Delivery cnsent frm. Prf f electrnic delivery and receipt f disclsures must be prvided t determine the cnsumer receipt date. Date Issued n the LEs and CDs must be the date the LE r CD is sent by the creditr t the cnsumer. Revised: March 22, 2016 Page 7 f 8

8 Fr Applicatins dated n r after 10/3/2015 Waiting Perids: Crrespndents are respnsible fr enfrcing all applicable waiting perids. CMG Financial will nt purchase any lans where the cnsumer has waived any f the required waiting perids as defined by the TRID Rule unless it was due t imminent freclsure and apprpriately dcumented. Any ther waiver must be cnsidered fr exceptin by CMG Financial Senir Management and Cmpliance;; purchase is nt guaranteed. Lss f earnest mney is nt a valid reasn fr waiver f any waiting perid. Limits n Fee Changes: The new rule tightens the existing tlerances under RESPA and des nt allw changes t additinal types f charges frm the LE t clsing withut a valid changed circumstance. As was the case under RESPA pre-trid Rule, if a valid changed circumstance ccurs after the initial LE r initial CD is prvided t the cnsumer, a revised LE r CD can be created with fees related t the valid changed circumstance prvided this is dne within three general business days f the change. The requirements utlined abve in the LE and CD Overviews must be adhered t. CMG Financial will require dcumentatin supprting baseline resets. CMG Financial s purchase review will include an assessment f all LEs and CDs t determine if fee changes were within acceptable tlerance limits. CMG Financial uses the CmplianceEase TRID Mnitr t perfrm this assessment. CMG Financial will require submissin f the cmpliance tl used t ensure the lan meets TRID Rule requirements. If charges have increased frm the LE t the CD beynd allwable tlerance limits withut a valid changed circumstance and apprpriate redisclsure, the creditr must cure the tlerance vilatin by refunding the excess payment fr the charge t the cnsumer and prvide a crrected CD dcumenting the refund within the applicable timing requirements as defined by the TRID Rule. The CMG Financial Crrespndent is respnsible fr ensuring cmpliance with the TRID Rule and all related laws and regulatins. This dcument is fr general infrmatinal purpses and des nt cntain r cnvey legal advice. The infrmatin presented shuld nt be used r relied upn in regard t any particular facts r circumstances withut first cnsulting legal cunsel. Any questins pertaining t this infrmatin shuld be directed t yur legal cunsel. CMG Financial reserves the right t decline any lan that des nt meet requirements CMG Financial, All Rights Reserved. CMG Financial is a registered trade name f CMG Mrtgage, Inc., NMLS #1820 in mst, but nt all states. Fr infrmatin abut ur cmpany, please visit us at T verify ur cmplete list f state licenses, please visit This dcument is nt a Cnsumer Credit Advertisement and is intended fr Crrespndent Client Use Only. Revised: March 22, 2016 Page 8 f 8