Ready. Set. know. Understanding TILA-RESPA Integrated Disclosure (TRID)

Transcription

1 Ready. Set. know. Understanding TILA-RESPA Integrated Disclosure (TRID)

2 How our competition is handling TRID. Relying on 3rd party vendors to provide material Communicating what we need to know through Compliance Officer Training only managers who are then going to train their departments accordingly The Federal Savings Bank Understanding TRID 2

3 How TFSB is handling TRID. Holding weekly sales meetings to update entire sales team Requiring every employee to attend training regarding different aspects of TRID Requiring every employee to receive a 90% or higher on each TRID training module. The Federal Savings Bank Understanding TRID 3

4 TILA - RESPA (all applications on or after August 1, 2015) The Dodd-Frank Wall Street Reform & Consumer Protection Act authorized the Consumer Financial Protection Bureau (CFPB) to integrate the mortgage loan disclosures. TRID consolidates 4 existing disclosures Old Disclosure New Disclosure GFE and Initial TIL Loan Estimate (LE) replaces Final TIL and HUD-1 Closing Disclosure (CD) replaces The Federal Savings Bank Understanding TRID 4

5 Loan Estimate Page 1 Costs at Closing Total loan costs Other costs Lender credits Cash to close Alternative costs table - Transactions without a seller The Federal Savings Bank Understanding TRID 5

6 Loan Estimate Timing of Delivery Delivery of the LE to the borrower Due 3 business days once the application has been triggered (not counting Sundays or Federal Holidays) 3 business days for Revised Loan Estimate I can meet in person to shorten the mailbox rule Sunday 7/31 Monday 8/1 Tuesday 8/2 Wednesday 8/3 Thursday 8/4 Friday 8/5 Saturday 8/6 Application Triggered Day Zero Day One Day Two Lender must provide LE by 11:59PM Day Three The Federal Savings Bank Understanding TRID 6

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10 Closing Disclosure Replaces HUD-1 and final TIL disclosure. Intended to help borrowers understand final costs. Required for all loans in which the Loan Estimate form was issued Closing Disclosure must be kept for five years after consummation. - Record keeping regulation The Federal Savings Bank Understanding TRID 10

11 Timing of the Closing Disclosure Purchase Transactions - Borrower(s) must receive the Closing Disclosure at least 3 business days prior to consummation Minimum receipt is the primary borrower Sunday 7/31 Monday 8/1 Tuesday 8/2 Wednesday 8/3 Thursday 8/4 Friday 8/5 Saturday 8/6 Closing Disclosure is Received by consumer Earliest Close Earliest Close Date (ECD) Day Zero Day One Day Two Day Three The Federal Savings Bank Understanding TRID 11

12 Delivery of the Closing Disclosure In person - Signed in person shortens the mailbox rule esign - Instant acknowledgment & shortens the mailbox rule - Borrower can acknowledge receipt to shorten mailbox rule Overnight Delivery - Signed receipt of delivery shortens the mailbox rule By U.S. Mail - Mailbox rule applies The Federal Savings Bank Understanding TRID 12

13 Timing of delivery Close Date Monday Tuesday Wednesday Thursday Friday Saturday Receipt of Disclosures Due Preceding Thursday Preceding Friday Preceding Saturday Preceding Monday Preceding Tuesday Preceding Wednesday Mail Disclosures Preceding Monday Preceding Tuesday Preceding Wednesday Preceding Thursday Preceding Friday Preceding Saturday The Federal Savings Bank Understanding TRID 13

14 Revised Closing Disclosure New 3 Day Waiting Period Revised Closing Disclosure must be received 3 business days prior to consummation if: 1. The previously disclosed APR becomes inaccurate. - Increase or Decrease in APR by more than.125% 2. Change in loan product. - Conventional to FHA, for example - 30 year fixed to 5/1 ARM, for example 3. Addition of prepayment penalty The Federal Savings Bank Understanding TRID 14

15 Revised Closing Disclosure 3 categories of changes that can trigger a revised CD: 1. Changes before consummation that require a revised CD be delivered & received. - New 3 day waiting period 2. Changes before consummation not requiring a new waiting period - Revised CD on day of consummation 3. Changes occurring after consummation - Delivery timelines will apply post consummation The Federal Savings Bank Understanding TRID 15

16 66 Revised Closing Disclosure No New Waiting Period But DOES require a revised CD at or before consummation Minor changes to costs Minor changes requested by the borrower Final walkthrough reveals a situation where the seller has to issue a last minute repair credit for minor damage The Federal Savings Bank Understanding TRID 16

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22 In Conclusion... The Federal Savings Bank Understanding TRID 22

23 How Can You Prepare? Control your business. Get complete seller information upfront. CFPB & National Association of Realtors (NAR) say add up to 10 business days to the transaction Anticipate longer closing cycles as this will be a change in business for the entire industry: lenders, title companies, attorneys, and realtors Finalize your deal at contract / attorney review Go with Title Companies that have worked with your lender The Federal Savings Bank Understanding TRID 23

24 Working with another lender? Ask these questions: What is your company doing to prepare for TILA-RESPA Integrated Disclosure (TRID)? Can you still do pre approvals? The Federal Savings Bank Understanding TRID 24

25 Working with TFSB? What is your company doing to prepare for TILA-RESPA Integrated Disclosure (TRID)? Educational courses and exams required by all employees. Workgroup created to ensure changes are seamlessly implemented. Can you still do pre approvals? Absolutely! Additionally, we can get a fully underwritten conditional approval through our Express Loan Approval Program. The Federal Savings Bank Understanding TRID 25

26 TILA-RESPA Integrated Disclosure (TRID) Nothing is changing with Government Loans Nothing is changing with the ability to qualify Disclosures will be easier to understand with the new formats The Federal Savings Bank Understanding TRID 26