TRID: THE BUCKET CHALLENGE

Transcription

1 TRID: THE BUCKET CHALLENGE 2015 Temenos USA, Inc. All rights reserved. Leah M. Hamilton Chief Compliance Officer TriComply Services

2 WHAT YOU WILL LEARN Good faith Changed circumstance The Tolerance Buckets Fee Bucket Challenge 2

3 GENERAL RULE Creditors are generally bound by Loan Estimate May not issue revisions because later discover technical errors, miscalculations or underestimations of charges May only charge more than amount disclosed when original estimate, or lack thereof, was based on the best information reasonably available at the time of the disclosure 3

4 GOOD FAITH Loan Estimate figures must be made in good faith and consistent with the best information reasonably available at the time of disclosure To determine good faith: Look at difference between the estimated charges originally provided in LE and the actual charges paid by or imposed on the consumer Generally, if the charge paid by or imposed on the consumer exceeds the amount originally disclosed on the Loan Estimate, it is not in good faith, unless it meets an exception 4

5 VALID CHANGED CIRCUMSTANCE Changed circumstance means: An extraordinary event beyond control of any interested party or other unexpected event specific to consumer or transaction; Information specific to consumer or transaction that creditor relied upon when providing LE and that was inaccurate or changed after LE provided; or New information specific to consumer or transaction that creditor did not rely on when providing the original LE 5

6 REVISED LOAN ESTIMATE Permitted only in certain specific circumstances: Changed circumstances that occur after LE provided to consumer cause settlement charges to increase more than permitted Changed circumstances that occur after LE provided to consumer affect consumer s eligibility for the terms for which consumer applied or the value of the security for the loan Revisions are requested by consumer Interest rate not locked when Loan Estimate was provided, and locking rate causes points or lender credits disclosed on LE to change Consumer indicates an intent to proceed with transaction more than 10- business days after LE was originally provided Loan is a new construction loan and settlement is reasonably anticipated to be delayed more than 60-days 6

7 ZERO TOLERANCE THRESHOLD Creditor may never charge more than estimated amount unless changed circumstance (or other triggering event) Fees paid to creditor, mortgage broker, or an affiliate of either Fees paid to an unaffiliated third party if creditor did not permit consumer to shop Transfer taxes 7

8 10% TOLERANCE THRESHOLD Some charges subject to a 10% cumulative tolerance Recording fees Charges for third-party services where Charge is not paid to creditor or creditor s affiliate Consumer is permitted by creditor to shop but selects a third-party service provider on creditor s written list of service providers Critical distinction from current rules Must meet Tipping Point to re-set the fees 8

9 NOT SUBJECT TO A TOLERANCE LIMITATION Certain charges may exceed amount disclosed on LE by any amount Prepaid interest; property insurance premiums; amounts placed into an escrow, impound, reserve or similar account; Services required by creditor if creditor permits consumer to shop and consumer selects 3 rd party service provider not on creditor s written list of service providers; and Charges paid to 3 rd party service providers for services not required by creditor (may be paid to affiliates of creditor) However... Creditors may only charge more than amount disclosed when original estimate, or lack thereof, was based on best information reasonably available at the time of disclosure Good faith 9

10 TOLERANCE CURES General Rule If amounts paid by consumer at closing exceed amounts disclosed on LE beyond applicable tolerance threshold, creditor must: Refund excess no later than 60 days after consummation, and Deliver or place in the mail a corrected CD that reflects such refund Lender Credits (tolerance cure) Zero tolerance charges Must be refunded to consumer 10% cumulative tolerance charges Amount that exceeds the 10%, must be refunded to consumer 10

11 FEE BUCKET CHALLENGE Each table has been provided a Fee slip or two or three Take 5 minutes to mark: Which tolerance bucket the fee under the conditions provided is subject to Based on the conditions, should there be a tolerance cure 11

12 Questions?