Regulatory Solutions Top 5 TRID Exceptions Noted During Our Loan Reviews

Last year, Regulatory Solutions completed TRID reviews on traditional mortgage loans, lot loans, constructions loans and construction/perm loans as well as home equity loans for lenders. While the number of exceptions varied per loan review, there were common TRID exceptions that occurred. Here are the top 5 TRID exceptions that Regulatory Solutions noted during our loan reviews:

 

        1. Disclosure issues in Block H of the Closing Costs Details table on page 2 of the Closing Disclosure. For example, the Real Estate Commissions fees are not always disclosed in Block H. These fees are required to be disclosed in Block H per 1026.38(g)(4) comment 4.

        2. Disclosure issues in Block B of the Closing Costs Details table showing the services that the borrower did not shop for on page 2 of the Closing Disclosure. For example, sometimes one or more of the Title fees are being placed in Block B when the borrower did not choose a service provider from the Settlement Service Provider List. Only fees that the borrower did not shop for should be placed in Block B per 1026.38(f)(2).

        3. The Amount Financed section of the Loan Calculations table on page 5 of the Closing Disclosure was not calculated correctly. Non-prepaid finance charges are being included in the calculation.

        4. The contact information for the participants in the transaction was not correct in the Contact Information table on page 5 of the Closing Disclosure. Lenders are still leaving out email addresses and contact information.

        5. The breakdown and other disclosure issues of the amount for taxes and other government fees listed in Block E of the Closing Costs Details table on page 2 of the Closing Disclosure. For example, the Transfer Taxes listed in Block E do not list the name of the government entity that is assessing the tax, which is required by 1026.38(g)(1)(ii).

While the portfolio loans we reviewed have similar TRID exceptions, they will occasionally have different reporting problems than loans sold in the secondary market. One of the most common exceptions for portfolio loans is the incorrect loan purpose being listed on the Loan Estimate and the Closing Disclosure. Whether the loan should be listed as a refinance or as construction are the two most confused loan purposes for portfolio loans.

Regulatory Solutions provides comprehensive TRID reviews to ensure compliance with TILA-RESPA requirements. Contact us today to find out how we can assist you with your TRID and other lending compliance reviews.

Factsheet: Are Loan Estimates and Closing Disclosures Required for Assumptions?

On May 1, 2019 the Consumer Financial Protection Bureau posted a factsheet regarding whether Loan Estimates (LE) and Closing Disclosures (CD) were required for assumption transactions. The factsheet consists of a flowchart and a narrative discussion to assist lenders in making the determination whether a loan would require the TILA-RESPA Integrated Disclosures. The factsheet can be found at https://files.consumerfinance.gov/f/documents/cfpb_tila-respa-factsheet.pdf.

Regulatory Solutions specializes in TRID loan reviews, please contact us to schedule your review today.

HMDA Compliance Alert: CFPB Proposes New Changes

On April 13, 2017, the Consumer Financial Protection Bureau issued a much-ask-for proposal to clarify and facilitate HMDA compliance with the 2015 updates to the Home Mortgage Disclosure Act rule set to take effect next year. According to the CFPB, “The proposed changes would help financial institutions comply with the 2015 HMDA Final Rule by clarifying the information they are required to collect and report about their mortgage lending.”

“These changes are monumental to HMDA collection and reporting requirements and will require a substantial amount of planning to implement the new data fields,” stated Rhonda Wannemuehler, Executive Vice President of Regulatory Solutions. “The CFPB gave the industry about three years to become compliant to the updates released in October 2015 with most of the requirements taking effect in January 2018.”

Read the full article on HousingWire.

Consumer Financial Protection Bureau website to review the proposal and other quick references. 

Learn more about our Lending Compliance services.