TRID TILA RESPA Integrated Disclosure. September 29, 2015 Select Partner Process Overview

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1 TRID TILA RESPA Integrated Disclosure September 29, 2015 Select Partner Process Overview 1

2 Objectives Important Definitions Product Delivery SP Workflow Overview CMG Drawn Docs Process SP Drawn Docs Process Waiting Period and Required Signatures Tolerance Buckets Change of Circumstance Pipeline Transition Resources Questions? 2

3 Important Definitions Lender As a Select Partner, you are the lender/creditor on the transaction and ultimately responsible for the accuracy of the Loan Estimate and Closing Disclosure. Application-The definition of an application changes with the implementation of the TRID rules for applications taken on or after 10/3/2015. An application is considered received when the following items have been provided. 1. Borrower s Name 2. Borrower s Income 3. Borrower s Social Security Number 4. Property Address 5. An Estimate of Value 6. Loan Amount General Business Days General business days do not count Saturday, Sunday or Federal Holidays unless the Select Partner is open Saturday to the public for carrying out substantially all of your business functions. If the Select Partner is open on Saturday under this definition, they must count Saturday. Specific Business Days Specific Business days are defined as all calendar days with the exception of Sunday and all legal public holidays. 3

4 Product Delivery To allow a transitional period for our Select Partners, CMG will temporarily suspend the delivery of loan product based on your Select Partner Product Elections addendum through December 31, The broker portal will need to be update to accept FHA and VA loans, if you currently have elected to deliver those through SP. Contact your AE to have your profile updated. (Conventional loans will not require an update) This will be allowed on a transaction by transaction basis through the end of the year. 4

5 Workflow In general, the workflow that a Select Partner experiences today will not change significantly. The pipeline portal will function as it does today for a Select Partner transaction. The technology changes for loan creation and LE requests that will be made to CMG s systems will be for wholesale broker transactions only with the exception of the new online Doc Order form. The Select Partner will produce the initial disclosures including the LE. The LE must be prepared and delivered to all borrower s within 3 general business days after receiving the six items that define an application and within 7 specific business days before consummation (Note signing date) Only one of the primary borrowers must acknowledge receipt of the LE to request Intent to Proceed. An appraisal may be ordered after the LE receipt and the Intent to proceed is provided. A revised LE must be provided to the borrowers within 3 general business days of all valid change of circumstances when tolerance thresholds are exceeded. The preparation and delivery of the LE is the responsibility of the Select Partner. The Select Partner is responsible for the state and federal compliance rules (HPML, Points & Fees, etc.). 5

6 Workflow (Cont.) CMG will do a cursory audit of the disclosures when the loan is submitted for underwriting. The Select Partner is responsible for documenting Change of Circumstance events and re-disclosing the LE and CD per the new TRID Rule. The Select Partner is responsible for producing and delivering the initial and final CD to the applicable recipients. Reminder: The Select Partner cannot provide the CD to the real estate agent(s) The title company is responsible for preparing and delivering the CD to the seller. The loan will close in the Select Partner s name and will fund with the Select Partners funds. 6

7 CMG Drawn Docs CMG will continue to offer Document Preparation services. CMG Account Manager will complete all necessary preparations for closing prior to submitting the loan for Clear to Close. LDP/GSA search VOE Title and Legal Description Hazard Insurance Review Once the Underwriter issues the CTC the loan will be queued directly to closing. The Select Partner will submit a Doc Order Request online. Upon receipt of the request, CMG will assign the loan to a Doc Drawer to prepare the closing fee worksheet and place in Docs Ordered status. 7

8 CMG Drawn Docs (Cont.) CMG Doc Drawer will review the LE and Change of Circumstance history, then prepare a closing fee worksheet that the Select Partner may use to prepare their own CD and finalize figures with Closing Agent. Select Partner (or elected party) will prepare the CD and issue to the applicable parties and obtain proof of acknowledgement The CD can be prepared by escrow/title, 3 rd party source or self-prepared Once the CD has been issued, no further revised LEs may be issued. CMG will assist with the review of the CD but the Select Partner is responsible for approving the initial and final CD(s) and the delivery to all applicable parties. Select Partner will provide proof of acknowledgment for the Doc Drawer to finalize and deliver the loan docs. 8

9 CMG Drawn Docs (Cont.) CMG Doc Drawer will determine earliest date of consummation and date docs accordingly. Docs will be dated 3 specific business days after all applicable parties have acknowledged receipt of CD. If one of the follow occurs after the delivery of the CD and before consummation, the SP must provide a revised CD and impose a new 3 specific day waiting period before consummation. 1. The APR increased/decreased by more than.125% (fixed) and.25% (ARM) 2. The loan product changes 3. Addition of a prepayment penalty (Note: CMG does not offer loans with PPP) Be sure to consult your warehouse partners for specific rules they might have. CMG will utilize Compliance Ease as a TRID monitoring tool for date and fee tolerance tracking. 9

10 Select Partner Drawn Docs The Select Partner is still allowed to prepare their own documents through their own system or through a 3 rd party vendor. Once the Underwriter issues the CTC the loan will be queued directly to closing and placed in a Docs Out status. Select Partner (or elected party) will prepare the CD and issue to the applicable recipient(s) and obtain proof of acknowledgement. The CD can be prepared by escrow/title, 3 rd party source or self-prepared Once the CD has been issued, no further revised LEs may be issued. 10

11 Select Partner Drawn Docs Once the initial Closing Disclosure is delivered and prior to loan consummation, a revised Closing Disclosure resetting variance thresholds will be sent only in 2 instances: If the loan amount changes; or If the interest rate is relocked or extended. If one of the following occurs after the delivery of the initial CD and before consummation, the SP must provide a revised CD and impose a new 3 specific day waiting period before consummation. 1. The APR increased/decreased by more than.125% (fixed) and.25% (ARM) APR going down will not automatically trigger a new waiting period, as it is dependent on changes to finance changes. 2. The loan product changes 3. Addition to a prepayment penalty (Note: CMG does not offer loans with PPP) 11

12 Select Partner Drawn Docs (Cont.) CMG Funder will review for the following at time Purchase: A review of the CD to the LE(s) will be performed (including the initial LE and subsequent COC s). Final Closing Disclosure (accuracy and tolerances) APR violation - no more than.125% (fixed rate) or.25% (ARM) variance from final CD) Proof of receipt of CD by all applicable parties Loan consummation did not occur prior to CD being received as required Waiting periods will be audited Tolerances will be reviewed. CMG will utilize Compliance Ease as a TRID monitoring tool for date and fee tolerance tracking. 12

13 Waiting Period and Required Signatures The CD must be received 3 specific business days before consummation. Specific business days are all calendar days except Sunday and Federal Holidays. Required recipient(s) differ on rescindable and non-rescindable loans Receipt is defined by: All applicable parties opening the disclosure (when electronically delivered) 3 specific business days after the CD is mailed. (presumed received) 13

14 Funding Package Delivery The Select Partner will continue to deliver the loan package as they do today by uploading the closing package into the imaging system and delivering the original collateral (note) package to CMG. Upon receipt of the closing package in imaging, CMG will update the loan status to Docs Back and the file will be reviewed for purchase. The 10 free day extension will remain available at the time the loan is put in Docs Back status. Please refer to the Select Partner Seller Guide for current Policy and Procedures applicable to your Select Partner transactions. 14

15 Tolerance Buckets 15

16 Change of Circumstance When does a Changed circumstance occur: After the LE is provided to the borrower, an event causing settlement charges to increase more than the permitted tolerance After the LE is provided to the borrower, new information that affects the consumers eligibility for the terms for which the borrower applied or the value of collateral When revisions are requested by the borrower Interest rate not locked when the LE was provided; locking the rate would cause the points or lender credits disclosed on the LE to change. Borrower indicates an intent to proceed with the transaction more than 10 business days after the LE was originally provided. The loan is a new construction loan, and settlement is delayed. 16

17 Change of Circumstance (Cont.) Select Partners will need to issue a Revised Loan Estimate when a valid change of circumstance occurs and base tolerance thresholds are exceeded. CMG s policy for wholesale transactions will be to only send a Revised Loan Estimate if the Rate is Locked/Extended, Loan Amount changes, or the fee increases above the tolerance bucket. Outside of those three scenarios, CMG will not send a Revised Loan Estimate. The Rule does not prohibit sending out disclosures when fees decrease or if fees do not exceed the base tolerance limits, however; Sending a Revised Loan Estimate does not reset the variance threshold baseline. The threshold baseline will only be reset if the fee(s) increase above the tolerance. We encourage you to look at your systems and the ability to track tolerances with regard to Revised Loan Estimates. 17 Select Partner Roundtable

18 Change of Circumstance (Cont.) Does the variance threshold get reset with a Revised Closing Disclosure? CMG has made the policy to only allow the reset to the variance threshold on a Revised Closing Disclosure if: The Rate is locked/extended or The loan amount changes. All other changes, valid or otherwise, will not reset the variance threshold and must be paid by the lender. When does a new 3 day waiting period apply before the note can be signed? When the APR changes.125% (fixed) and.25% (ARM) APR going down does not automatically trigger a new wait period. When the loan product information on the CD changes When a prepayment penalty is added (Not applicable on CMG transactions) 18

19 Registered Loans not submitted on or before October 2 nd, 2015 Registered loans not submitted by October 2 nd WITH ACTIVE LOCKS: Loans registered (created) in the system prior to October 3 rd with a valid, unexpired lock must be submitted to CMG Financial either 15 business day prior to lock expiration or by 10/31/2015, whichever comes first. These loans will not be subject to the new TRID guidelines. If the loan isn t submitted within this timeframe, the lock will be cancelled and subject to the CMG re-lock policy. Registered loans not submitted by October 2 nd FLOATING LOANS: Loans that are registered (created) in the system prior to 9/1/2015 and not submitted to underwriting by 10/01/2015 will be cancelled out of our system end of business on 10/2/2015. You will be able to re-register the loan on 10/5/2015. (CMG s systems will unavailable on 10/3 & 10/4) Loans that are registered (created) from 9/1/2015 to 10/2/2015 must be submitted to underwriting by 10/31/2015 or the loan (and lock if applicable) will be cancelled. You will be able to re-register the loan as a new loan on 11/2/2015. Re-Registering active files that have been cancelled: In the event the Select Partner re-registers a file that has been cancelled and they need to access the existing DU case file to re-run the AUS findings, the Select Partner must contact their Account Manager to have the case file entered into the loan file. 19

20 Resources TRID Resource Page: Select Partner FAQ s: GFE to LE Comparison DFA_Mortgage_Disclosures_to_Integrate_Mortgage_Disclosures.pdf TRID Timeline Example 20

21 Questions 21

22 This is not meant to be legal advice. Please seek legal counsel as you implement TRID CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender, licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No , Loans made or arranged pursuant to a California Finance Lenders Law license No Offer of credit is subject to credit approval. For information about our company, please visit us at To verify our complete list of state licenses, please visit For more information o n State licenses, please visit Not intended to serve as a business solicitation for residents in Massachusetts. For Wholesale Brokers and Select Partner Clients only. 22