New TILA-RESPA Integrated Disclosure (TRID) Rulettsmedia.ttstrain.com/TRIDMtgRules042115.pdf · TILA-RESPA Disclosure Rules 00of of 5374 Carl PryCarl Pry April 21, 2015 A TTS Production

0 of 74 0 of 53 TILA-RESPA Disclosure Rules

Carl Pry

April 21, 2015

A TTS Production

New TILA-RESPA

Integrated Disclosure

(TRID) Rule: Are You Ready for Its Impact?

Carl Pry

April 21, 2015


Carl Pry

April 21, 2015 Introduction

CFPB amendments to Regs X and Z that integrate

existing RESPA and TILA disclosures

Initial TIL disclosure and GFE combined into new Loan

Estimate (LE) form

Final TIL disclosure and HUD-1 combined into new Closing

Disclosure (CD)

New timing requirements for disclosures

New tolerance levels for disclosed estimates

New pre-disclosure requirements


Carl Pry

April 21, 2015 Effective Date of New Rules

Effective date is August 1, 2015

Generally applies to transactions for which the creditor or mortgage broker

receives an application on or after that date

Becomes effective without respect to whether an application has been

received

What about loans in process?

If receive application before the effective date use:

Current early forms (early TIL and GFE)

Current closing forms (final TIL and HUD-1)

Current timeframes and tolerances

2 parallel systems for a period of time

Consider construction loans that are in process for months


Carl Pry

April 21, 2015 Coverage

Most closed-end consumer credit transactions secured by real estate

Consumer purpose under Reg. Z and RESPA remain the same

Reg. Z’s “real estate” definition followed, not RESPA definition (“residential real

estate”)

Rules does apply to assumptions (Reg. Z standard)

• But not “successor in interest” – is not an assumption under Reg. Z

The rule does not apply to:

Reverse mortgages

HELOCs

Chattel dwelling (e.g. mobile home) loans (existing Reg. Z disclosures)

Loans made by a creditor who makes 5 or fewer mortgages in a year

Certain no-interest loans secured by subordinate liens made for the purpose of

downpayment or similar home buyer assistance, property rehabilitation, energy

efficiency, or foreclosure avoidance or prevention (Existing Reg. Z disclosures)


Carl Pry

April 21, 2015 Coverage

Currently there are 5 types of loans covered by Z or RESPA, but

not both

Z only: construction-only, vacant land, loans secured by 25 or more acres,

chattel dwellings (e.g. mobile homes)

RESPA only: non-creditor loans

Most of these exceptions go away 8/1

Except for the chattel dwelling loans (still exempt)

For the others, they are covered by the new rules (provide a LE and CD)

What about temporary financing?

Exception goes away

But not under HMDA


Carl Pry

April 21, 2015 Construction Loans

Delayed settlement issues

New construction

Reasonably expect that settlement will occur more than 60

days after LE

• Creditor may revise if LE states clearly and conspicuously that at any

time prior to 60 days before consummation creditor may issue revised

disclosures

• If no such statement is provided, the creditor may not issue revised

disclosures

Standard forms do not provide a place to put the construction

disclosure (to permit 60 day redisclosure)


Carl Pry

April 21, 2015 Definition of “Application”

Submission of:

1. Consumer's name

2. Consumer's income

3. Consumer's SSN to obtain a credit report

4. Property address

5. Estimate of property value, and

6. Mortgage loan amount sought

No more “catch-all” category

RESPA: “Any other information deemed necessary for the originator”

CFPB concluded creditors can collect other information they deem necessary before obtaining

the 6 items above (such as obtaining SSN last) – sequencing or “strategic collection” of

information

• However, cannot artificially delay receipt of sixth item to delay delivery of the LE

• Can try to get the additional information within that 3 days, but HAVE to provide the LE within 3

business days after that 6th item is collected

Notice loan program is not an element!

• But don’t have to produce multiple LEs in that situation, or default to a specific one (such as a 30-yr

fixed loan)


Carl Pry

April 21, 2015 Definition of “Application”

Key is submission from consumer wishing to apply

How is information collected?

Online systems – consumer inputs data and saves it, but

doesn’t “submit” it to credit yet – no application

Online – make sure systems don’t prevent consumers from

submitting the 6 items if they want to because additional

information must be submitted

Refis: creditor having information on file from a previous or

existing loan, or loan application, does not mean that a new

application has been submitted


Carl Pry

April 21, 2015 Pre-Disclosure Rules

No fees may be imposed before the consumer has

received the LE and indicated an intent to proceed

(which is after LE is received)

Except a bona fide and reasonable fee for credit report

Can’t hold checks for later deposit or credit card numbers

Cannot require verifications before LE is delivered

Intent to proceed may be in any manner consumer chooses (but

not silence – no negative options) unless lender requires a

particular format – document this!


Carl Pry

April 21, 2015 Pre-Disclosure Rules

If a consumer is provided with a written estimate of terms or costs

(worksheets) before receiving the LE:

Provided pursuant to prequalifications, for example

• Don’t ask for verifications, though

Top of first page must contain a statement that “Your actual rate, payment,

and costs could be higher. Get an official Loan Estimate before choosing a

loan”

• Must be in font size no smaller than 12-point

Estimate may not be made with headings, content, and format substantially

similar to LE

• Different content, headings, format

• Cannot be a substitute for the LE

May not require documents verifying information related to the

application before providing the LE


Carl Pry

April 21, 2015 New Disclosures

Loan Estimate (LE) integrates and replaces the Initial/Early Truth-in-Lending (eTIL)

disclosure and GFE

Also includes new Dodd-Frank TILA disclosure, the Total Interest Percentage; ECOA

appraisal notice; and RESPA servicing notice

Unlike current GFE, the LE itemizes charges

APR (now on last page) and other Reg. Z disclosures are de-emphasized

Closing Disclosure (CD) integrates and replaces the Final TIL disclosure and HUD-1

Also includes new TILA negative amortization; and escrow disclosures

Must:

LE must provide consumers with a good faith estimate of credit costs and transaction terms;

CD must generally contain the actual terms and costs of the transaction

Be in writing and contain the information prescribed (also in Appendix H-24 and H-25)

Delivery must satisfy timing and method of delivery requirements

LE and CD forms are not template-based, are dynamic in construction and content based

upon loan program and other terms and conditions of the transaction


Carl Pry

April 21, 2015 Loan Estimate

No required font sizes

Forms are standard mandated forms, not model forms

N/A should not be used where there is no value to be

disclosed

Either omit it or leave it blank

No particular required naming convention (or fee names)

for charges on the LE

There is no itemization of the amount financed

The amount financed is on the CD (and even there it’s not itemized) but not

the LE


Carl Pry

April 21, 2015 Alternative Loan Estimate

Alternative Loan Estimate may be used if the transaction

does not have a seller

Refis, for instance

Can also be used for simultaneous closed-end seconds by the

same lender (but not required to do so)

Checkboxes used to indicate if Cash to Close is being paid by

or to the consumer on Page 1

Alternative Calculating Cash to Close table used with fewer

entries on Page 2


Carl Pry

April 21, 2015 LE Contents: Pg. 1 General information related to applicants, property, loan, and rate lock status

For multiple borrowers, additional space or pages may be used

Applicant address must be physical address, not email address instead

Name of Creditor may not be a broker name, even if creditor has not yet been determined

• But if creditor has not yet been determined, broker does not have to assigned a unique loan ID# (left

blank)

• Would then add it once creditor has been identified

“Date Issued” is date lender delivered or mailed, not receipt date

“Property” is address of property securing the loan, not purchased (if different)

“Sale Price” – for refis or other transactions without a seller, is estimated property value (but still call it

“Sale Price”

“Purpose” is a list of list of options: purchase, refinance, construction, and home equity (catch-all)

“Product Type” is adjustable, step rate, or fixed – use only one, even if hybrid product

“Loan Type” is Conventional, FHA, VA, or Other


Carl Pry

April 21, 2015 LE Contents: Pg. 1

Loan Terms

“Interest Rate” – for an ARM, if interest rate at consummation is not

known, rate disclosed is fully indexed rate

Where initial interest rate is calculated using a different formula than for

subsequent rate adjustments, disclose the initial interest rate


Carl Pry


Projected Payments

If payments will remain constant over life of the loan (such as a fixed rate, fixed payment

loan with no MI) disclose a single column

Additional columns (maximum of 4):

• Change to the periodic principal and interest payments

• Scheduled balloon payment

• Automatic termination of MI under PMI law (HPA)

Amount disclosed for estimated taxes, insurance and assessments can be for a time period

other than monthly (list time period)

“Estimated Escrow” must be there even if there is no escrow – put $0 here


Carl Pry


Costs at Closing

Including the total estimated closing costs and the estimated cash to

close

Alternative Costs at Closing table used for transactions without a seller

(optional)

• Shows a check box to indicate whether the consumer will be expected to

bring cash, or will receive cash at consummation for the estimated cash to

close amount


Carl Pry


Loan Costs

The term “Points” can only be used for charges

paid to reduce the interest rate – cannot be other

origination fees

If LLPA is assessed through the rate, but not

charging the consumer directly up-front, would

not have to disclose that as an origination charge

Cannot change the number of lines for each

category of costs – charges in excess of that

number are totaled into one charge and described

as additional charges


Carl Pry


Other Costs

Recording Fees and Other Taxes does not

include taxes on separate services, such as title

insurance

Calculating Cash to Close

Deposit or down payment is not subtracted as

part of the calculation of closing costs financed

Calculation of the closing costs financed line

item is not affected by a seller credit. Seller

credits are disclosed as a separate line item in

the Calculating Cash to Close table

For down payment/funds from borrower line

item, existing debt being satisfied includes any

type of debt


Carl Pry


Adjustable Interest Rate (AIR) and Adjustable Payment

(AP) tables

Used only when applicable

If no such features in the legal obligations, tables are not disclosed at all


Carl Pry


Additional Information About This Loan

In a loan with a mortgage broker, both creditor’s loan officer and mortgage broker’s

loan officer must be listed (if available)

Same NMLSR ID identified on the note and other documents

Comparisons

APR is not rounded, should be disclosed up to 3 decimal places

If APR is a whole number, truncated at the decimal point (i.e. 7, not 7.000; 7.25, not

7.250)


Carl Pry


Other Considerations

Must disclose transfer

servicing will at some point

later during the life of the

loan take place if that is the

intent at the time the LE is

issued

Even if servicing transfer is

to affiliate or subsidiary

Appraisal disclosure: for

loans subject to both Regs B

and Z, satisfy both

requirements here

Confirm Receipt (signature, is

optional)


Carl Pry

April 21, 2015 Loan Estimate Delivery

Delivery rules same as present Reg. Z and RESPA

Must deliver or mail LE no later than 3 business days after creditor receives

consumer's application – clock starts running

• “General” definition of business day:

– Day in which creditor’s offices are open to the public for carrying on substantially all of its

business functions

• If the LE is not provided in person, consumer is considered to have received it 3 business

days after it is delivered (including electronic) or mailed (“mailing rule”)

– In-person is assumed received upon delivery

– Electronic – date/time stamp, for example

– Mailing rule uses “specific” definition of business day: “All days except Sundays and the legal

public holidays specified in 5 U.S.C. 6103(a), such as New Year's Day, the Birthday of Martin

Luther King, Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day,

Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day”

If a mortgage broker receives application, either the creditor or mortgage broker

may provide the LE

• But creditor still remains responsible for compliance requirements


Carl Pry

April 21, 2015 Loan Estimate Delivery

LE must be delivered or mailed at least 7 business days before

consummation

Same as Reg. Z MDIA rule for initial disclosures (eTIL)

Specific definition of “business day” applies.

Consumer may waive or modify waiting period based on a bona fide

personal financial emergency – same standard as now

This 7-day period applies only to provision of the original/first LE (not

revised LEs)

Waiver or modification of this requirement is never a good idea

Investor probably will not buy loan


Carl Pry

April 21, 2015 Written List of Providers

If consumer is permitted to shop for service and selects a provider on the list, charge is

in 10% tolerance category

Shopping means consumer can go off-list

If consumer selects a provider not on list, subjected to unlimited tolerance (fee can change)

Must provide a written list identifying at least one available provider for each settlement

service for which the consumer is permitted to shop (Model Form H-27)

Include sufficient information to allow consumer to contact provider

State that consumer may choose a different provider for that service

Provide list separately from disclosures

Can provide disclaimer that referrals aren’t endorsements

Written list is a referral under RESPA


Carl Pry

April 21, 2015 “Good Faith” Standard

LE figures “must be made in good faith and consistent with the best

information reasonably available to the creditor at the time disclosed”

To determine good faith:

Difference between estimated charges originally provided in LE and actual charges

paid by or imposed on the consumer

• The word “tolerance” is not used in the regulation – called “Variations”

• Exceptions if within the tolerance levels

Generally, if the charge paid by or imposed on the consumer exceeds the amount

originally disclosed on the LE it is not in good faith

• True regardless of whether creditor later discovers a technical error, miscalculation, or

underestimation of a charge

Amount paid by or imposed on the consumer may always be less than the amount

estimated

Notice LE does not list cents, so rounding may lead to tolerance problems


Carl Pry

April 21, 2015 Tolerance Levels

“No Variations” (zero tolerance)

Creditor may not charge more than the estimated amount

unless there is a valid “changed circumstance” (or other

triggering event)

Fees paid to creditor, mortgage broker, or affiliate of either

• AfBA charges placed here

– Be aware RESPA’s AfBA/required provider rules are still in place

• Affiliate aspect is new

Fees paid to an unaffiliated third party if the creditor did not

permit the consumer to shop

• This is a new one, also

Transfer taxes


Carl Pry


“Variations Permitted” (unlimited tolerance)

Charges may vary by any amount between LE and CD

Prepaid interest

Property insurance premiums

Amounts in escrow, impound, reserve or similar account

Services required by the creditor if creditor permits the consumer to shop and

consumer selects a third-party service provider not on creditor's written list of

service providers

Charges paid to third-party service providers for services not required by the

creditor

• May be paid to affiliates

• This one is new

Does not necessarily mean “No Tolerance,” however

“Best information reasonably available to the creditor”

Cannot intentionally under-disclose prepaid interest, escrow charges, or similar

amounts


Carl Pry


“Limited Increases” (10% cumulative tolerance level)

Recording fees

Charges for third-party services where:

• Charge is not paid to creditor or affiliate

• Consumer is permitted by the creditor to shop, but selects a third-party

service provider on the creditor's written list of service providers, not an

affiliate

Owner’s title insurance not required by the creditor does not

fall under this category (this has no tolerance)


Carl Pry

April 21, 2015 Revised Loan Estimate

CFPB: “Creditors are bound by the Loan Estimate, and may not issue revisions because

they later discover technical errors, miscalculations, or underestimations of charges”

Revised LE allowed only:

Changed circumstances occur after LE is provided cause settlement charges to increase more

than permitted (tolerance level)

• Although you can provide a revised LE if the change does not exceed the tolerance level, but the

tolerance level does not then reset

Changed circumstances occur after LE is provided affect consumer's eligibility

• For terms for which the consumer applied or the value of the security for the loan

Revisions requested by the consumer

• Such as different loan product

Rate lock (float-to-lock) causes points or lender credits disclosed on the LE to change

• Provide a revised LE within 3 days (originally was same day)

Consumer does not indicate intent to proceed within 10 business days after LE was provided

New construction loan and settlement is delayed


Carl Pry

April 21, 2015 What is a Changed Circumstance?

Defined as:

Extraordinary event beyond the control of any interested party or other unexpected

event specific to the consumer or transaction

• War, natural disaster, etc.

Information specific to the consumer or transaction that the creditor relied upon

when providing the LE and that was inaccurate or changed after the disclosures

were provided

• Such as loss of employment, or appraisal issues

New information specific to the consumer or transaction that creditor did not rely on

when providing the LE

Revised LE must be provided within 3 business days (“general” definition)

from the event the gave rise to the revised LE

No new 7-day period after a revised LE is provided

• Meaning provide it no less than 4 (specific) business days before consummation

Document the changed circumstance!


Carl Pry

April 21, 2015 Closing Disclosure

Generally must state “the actual terms of the credit

transaction, and the actual costs associated with the

settlement of that transaction”

But if information is not known despite creditor having

exercised due diligence to obtain it, may disclose an estimate

based on the best information reasonably available

• Even if the creditor knows that more precise information will be

available at or before consummation

Information that does not fit may be disclosed on a separate

page


Carl Pry

April 21, 2015 Alternative Closing Disclosure

May be used if the transaction does not have a seller (like HUD-

1A today)

Checkboxes are used to indicate if Cash to Close is being paid by or to the

consumer on Page 1

Seller's column for costs is deleted on Page 2

Summaries of Transactions is deleted and Payoffs and Payments are

disclosed at the top of Page 3

Alternative Calculating Cash to Close table is used with fewer entries on

Page 3

May only be used if alternative LE was also used

Otherwise standard form must be used


Carl Pry

April 21, 2015 CD Contents: Pg. 1

General information

“Date Issued” is date delivered to the consumer, not the date the

form was printed

“Closing Date” is consummation date – state law issues again

“Sale Price” for a refi is appraised value (label it “appraised prop.

value”)

“Transaction Information” – “Lender” need not list address here


Carl Pry


Loan Terms

Projected Payments

Mostly same instructions as LE

Different rules for the disclosure of

estimated escrow and estimated taxes,

insurance and assessment

• For loans covered under RESPA,

amounts of property taxes and

homeowner's insurance are determined

under RESPA escrow account analysis

rules

• If not covered under RESPA, use Reg. Z

rules

Different reference to the escrow

account information, which is on Page 4

Costs at Closing

Alternative table for transactions with

no seller


Carl Pry


Loan Costs

Similar to page 2 of the LE – categories are the same

Itemization of each amount in LE, and who pays

• Including third column if any third-party, such as creditor/lender, paid it

• Charges paid by lender, include “(L)” to left of amount in the column in order to denote those charges

are paid by the lender

• LO compensation paid by creditor to a third-party LO (such as a mortgage broker) is not disclosed on

LE, but is disclosed on CD

Number of lines can be reduced or added by the creditor for each category based on need if

need more pages, break into two pages (number 2A and 2B) with loan costs on Page 2A and

other costs on Page 2B

Fees and costs are listed alphabetically

No more uniform sections as on HUD-1


Carl Pry


Loan Costs

If consumer could have shopped for a provider, but chose one that was on the

written list (and creditor did not require that service provider), charge would

move to the services borrower did not shop for category

• Items disclosed as a service you (the consumer) can shop for will stay in the category

of services the borrower did shop for on the CD if the consumer does not use a

provider on the written list, or if provider was not required by creditor


Carl Pry


Other Costs

Amount paid for real estate commission is total amount of the commission and is not affected

by status of earnest money deposit that may be held by the real estate broker

General lender credits not associated with any particular item are listed at the bottom as a

negative number along with a narrative description

Transfer taxes and recording fees are itemized on the CD instead of aggregated on the LE

• Disclose name of entity assessing the transfer tax, even if different from payee of the check cut by the

settlement agent

Prepaids are for services or costs due for future periods that are due before the first scheduled

monthly payment


Carl Pry


Calculating Cash to Close

Compared with information on Page 2 of the LE – is a tolerance check

Amounts under heading “Final” taken directly from other portions of the CD or

are calculated off-sheet based on actual amounts at consummation

If amounts are different, the answer “Yes” is listed with narrative description of

why the amount changed; if amounts are the same, the answer is “No” and

nothing else is stated


Carl Pry


Summaries of Transactions

Resembles current HUD-1

Lender credits will not appear in the

“Borrower's Transaction” table

Only amounts disbursed to the seller prior to

consummation are disclosed as excess deposits

– any deposits held by the real estate brokerage

is not included in this calculation

“Seller's Transaction” table can be omitted from

the CD provided to the consumer, and the

“Borrower's Transaction” table can be omitted

from the CD provided to the seller

• Both can be deleted when there is a transaction

without a seller

• Instead of the “Summaries of Transactions” tables,

they're replaced with a pay off and payments table

when the LE was provided with the alternative

“Cash to Close” table


Carl Pry


Loan disclosures

Escrow account

Adjustable Payment (AP)

and Adjustable Interest

Rate (AIR) tables (when

applicable)

Same rules as LE


Carl Pry


Partial Payment – 3 check boxes to make disclosures of lender's partial payment policy

1. If periodic payment less than the full amount due are accepted, disclose a statement that it

may accept partial payment and apply payment to the consumer's loan

2. If periodic payments less than the full amount due are accepted but not applied to loan until

consumer pays the remainder of the full amount due, disclose a statement that it may hold

partial payments in a separate account until consumer pays remainder of payment and then

applies the full payment to the loan

3. If periodic payments less than the full amount due are not accepted, disclose a statement

that it does not accept partial payments

May check multiple boxes (first and second only)

Also disclose that if loan is sold, new lender may have a different policy


Carl Pry


Loan Calculations

Roughly amounts disclosed

currently on the TIL in the Fed

Box, plus new Total Interest

Percentage (TIP)

Other Disclosures

Contact Information

Confirm Receipt


Carl Pry


“Liability after Foreclosure” provision requires a brief statement that certain

protections may be lost if consumer refinances or incurs additional debt on the

property, and statement that the consumer should consult an attorney for

additional information

Check state law

For example, an anti-deficiency law is a state law that protects consumer against

liability for unpaid balance of the loan after foreclosure

• Statutes of limitation do not count as anti-deficiency laws

• However, state laws that limit how much a creditor may collect in an anti-deficiency

judgment are considered anti-deficiency protections


Carl Pry

April 21, 2015 Closing Disclosure Delivery

Creditor is generally responsible for ensuring the consumer

(buyer) receives the CD no later than 3 business days (specific)

before consummation

May contract with settlement agent to provide CD on creditor's behalf

Consummation defined under Reg. Z as time that a consumer becomes

contractually obligated on a credit transaction (state law issues)

If CD is not provided to the consumer in person, consumer is

considered to have received it 3 business days after it is delivered

or mailed

In person = receipt upon delivery

Anything other than in person – mailing rule applies

Or can rely on proof of receipt to evidence earlier receipt


Carl Pry


Settlement agent must provide the seller with CD at or

before consummation

How to deal with combined disclosures?

Once CD is sent, any changes to LE stop

Cannot deliver a revised LE on the same day the CD is

provided, either

Therefore, revised LE must be received by the consumer no

later than 4 business days prior to consummation


Carl Pry


Creditor is liable for CD no matter who prepares it

How will lenders do this?

Do it yourself

Let closing agent prepare CD

• Make sure they’re proficient and compliant

• vendor due diligence is essential

• Indemnity agreements signed?

Joint effort

• Lender prepares 3 TIL pages

• Closing agent prepares 2 pages on title/closing

• Each liable for their own submissions

• This is the most likely outcome


Carl Pry

April 21, 2015 Revising or Correcting the CD

Creditors must redisclose terms or costs on the CD if certain changes occur that

cause the disclosures to become inaccurate

Would not reset the tolerance levels

Is meant to be used only as an exception, not as a means of disclosing changes (that’s what the

revised LE is for)

3 categories of changes require a corrected CD containing all changed terms:

1. General rule: changes before consummation do not require new 3 business day

waiting period

• “If the Closing Disclosure becomes inaccurate before consummation, the creditor must

provide corrected disclosures reflecting any changed terms to the consumer at or before

consummation; however, the consumer may inspect the disclosure during the business

day immediately preceding closing”

2. Changes before consummation that require new 3 business day waiting period

• Disclosed APR becomes inaccurate – Reg. Z standard: 1/8 pt for regular transactions; 1/4

pt for irregular

• Loan product changes

• Prepayment penalty added


Carl Pry

April 21, 2015 Revising or Correcting the CD

3 categories of changes require a corrected CD containing all

changed terms:

3. Changes after consummation

• Event in connection with settlement causes CD to become inaccurate and

results in change to amount paid by the consumer or seller occurs within 30-day

period after consummation

– To document refunds for tolerance violations

– To correct non-numerical clerical errors – 60 days

• If it does not affect a numerical disclosure and does not affect the timing,

delivery, or other requirements

• Deliver or mail corrected disclosures no later than 30 days after receiving

information sufficient to establish that the event occurred

Note that different states (such as NY) define “consummation”

differently

Title company issues here


Carl Pry

April 21, 2015 Curing Tolerance Violations

If amounts paid by the consumer at closing exceed amounts

disclosed on the LE beyond applicable tolerance threshold

Creditor must refund the excess to the consumer no later than 60 days after

consummation, and

Creditor must deliver or mail a corrected CD reflecting refund no later than

60 days after consummation

Zero tolerance charges

Any amount charged beyond amount disclosed on the LE must be refunded

10% cumulative tolerance charges

Sum of charges exceeds sum of all such charges disclosed on LE by more

than 10%, difference must be refunded


Carl Pry

April 21, 2015 Liabilities

Rule does not set forth liability that applies to each requirement for a failure to

comply

Certain specific cure provisions as to fees

In preamble, CFPB notes it addresses statutory authority relied upon for each

requirement, and this provides sufficient guidance

TILA liabilities for disclosures:

Administrative enforcement

Private right of action – actual damages, statutory damages sometimes (strict

liability), court costs and attorney’s fees

RESPA liabilities for GFE and HUD-1:

Administrative enforcement aspects

No RESPA private right of action

Private right of action under others laws

Bottom line is TILA liability will be used for all disclosure errors


Carl Pry

April 21, 2015 Assignee Liability

Assignee can be subject to same claim that can be brought against

creditor

General assignee liability standard:

Violation apparent on the face of the disclosure statement (due diligence,

QA/QC, put-back provisions)

Apparent on the face of the disclosure statement if:

• Disclosure can be determined to be incomplete or inaccurate by comparison

among the disclosure statement, any itemization of the amount financed, the

note, or any other disclosure of disbursement

• Disclosure does not use the terms or format required to be used by TILA

How will investors react to this?


Carl Pry

April 21, 2015 Record Retention

General requirement – 2 years (TILA)

Mortgage-specific requirements:

Must evidence compliance, not just providing record copies

LE – 3 years after later of:

• Date of consummation

• Date disclosures required to be made, or

• Date action is required to be taken

CD – 5 years

• Applies to the original creditor even if the loan is sold or transferred

• If the loan is sold or transferred, disclosure copies must be provided to new

owner

• New owner must then retain for the remainder of the 5 years

• Closing agent should provide creditor with copies provided to seller, which

should be retained (but not other seller-specific documents)


Carl Pry

April 21, 2015

Compliance Questions:

Carl Pry

Treliant Risk Advisors

[email protected]

Webinar/Registration Questions:

Mark Bennett

Total Training Solutions

PO Box 310

Waunakee, WI 53597

1-800-831-0678

www.BankWebinars.com

[email protected]

Contact Information

Upcoming Webinars

• Opening New Accounts I - Legal Ownership of

Consumer Accounts – April 22

• Analyzing Tax Returns for Mortgage Decisions –

April 22

• Flood Insurance: Compliance Issues and Enforcement

Topics that Continue to Plague Lenders – April 23

• Compliance Perspectives: A Monthly Update – April

23

• Home Equity Lines of Credit – April 28

• SSN's, EIN's and ITIN's: Your Job as Withholding

Agent – April 28

• Opening New Accounts II - Business Accounts – April

29

• Reg E Compliance - Five Best Practices for Handling

Disputes – April 29

• Officer Calling: Prospecting, Preparing & Presentation

– May 5

• Lending 101 – May 5

• Bullet Proof Your Loan Portfolio – May 6

Documents

New TILA-RESPA Integrated Disclosure (TRID) Rulettsmedia.ttstrain.com/TRIDMtgRules042115.pdf · TILA-RESPA Disclosure Rules 00of of 5374 Carl PryCarl Pry April 21, 2015 A TTS Production