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:
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.
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).
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.
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.
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.
We are now almost two months into the new HMDA regulation and there have been several questions as to reporting the action taken. Specifically, when to report an application as being withdrawn or file being closed for incompleteness. While this data point existed under the old HMDA regulation, it can still be confusing.
First there are applications that must be reported as being withdrawn. Under the new HMDA regulation, withdrawn is reported when the application is expressly withdrawn by the applicant before a credit decision was made. An application is also reported as withdrawn if the financial institution provides conditional approval that specifies underwriting conditions which must be met and the applicant withdraws the application before satisfying all of the specified underwriting and credit worthiness conditions. An application would still be considered as being “withdrawn” if the financial institution made a counteroffer which the borrower agreed to and the loan was subsequently conditionally approved with underwriting conditions but the borrower later withdraws before satisfying those conditions.
When do you report an application as being closed for incompleteness? This part of the HMDA regulation coincides with ECOA. While the HMDA regulation itself does not necessarily require a notice to be sent regarding missing information, for an application to be considered as “file closed for incompleteness”, however a written notice of incompleteness as described under Regulation B 12 CFR 1002.9 (c)(2) must be sent to the applicant. If the applicant fails to respond to the written notice, there is no further action needed on the part of the financial institution and the action taken would be “file closed for incompleteness”. If an oral request for additional information is made by the financial institution and, if the application remains incomplete after the oral request is made, then a written notice denying the application based on the application being incomplete must be sent. In this instance, the file is denied for incompleteness instead of being closed for incompleteness. There are some financial institutions that provide both the notice of incompleteness under Regulation B, and then send an notice of denial for incompleteness. In this circumstance, reporting the application as closed for incompleteness or denied is left entirely up to the financial institution. As always, remember to document your file accordingly.
For more information on our HMDA services please contact Regulatory Solutions at firstname.lastname@example.org or Toll Free 855.734.7655.
Birmingham, Ala. – Regulatory Solutions LLC is pleased to announce that it has acquired the assets of Culp QC, Inc., a provider of quality control, post closing audit services to the mortgage industry. This transaction will significantly increase Regulatory Solutions’ business as well as its presence throughout the United States. Culp QC will continue to operate as a separate division of Regulatory Solutions under the Culp QC name with offices in Owensboro, Kentucky. Terms are undisclosed.
“We are excited to welcome Culp QC’s employees and clients to our growing company,” said Betsy Reynolds, president and founder of Regulatory Solutions. “Culp QC is a great fit as we both share a common approach in providing quality products and services to the mortgage industry.”
Bruce Culp has grown Culp QC over the last 22 years and is retiring after 45 years in the mortgage business. “I feel confident that Culp QC will be in great hands,” he said. “Regulatory Solutions has the same unwavering focus on customer service as we do and an unmatched attention to detail. Their innovative technologies in providing quality control services will give Culp QC the ability to grow its business and provide exciting new services to clients.”
According to Reynolds, in 2011 she set out to provide practical real world regulatory compliance assistance to financial institutions and mortgage companies. “We now serve clients all over the Southeast and expect our growth to continue nationwide,” she said. “It is an exciting time for us as we continue to serve our expanding client base with quality regulatory solutions.” Last year, the company acquired the assets of Outsource Mortgage Consultants, Inc., in Lexington, Kentucky.
Regulatory Solutions: Regulatory Solutions, a certified Women’s Business Enterprise, is located in Birmingham, Alabama, and provides regulatory and compliance consulting services to banks, mortgage companies, credit unions and investors on a nationwide basis. The company specializes in post closing, pre-funding and servicing quality control reviews for the mortgage industry.
Culp QC, Inc.: Culp QC, Inc. located in Owensboro, Kentucky was founded in 1995 by Bruce Culp, is a leading provider of quality control services nationwide. Bruce Culp, its founder will be retiring after 45 years in the mortgage business.
Our latest acquisition means we now serve clients all over the Southeast. In July 2016, Regulatory Solutions LLC acquired the assets of Outsource Mortgage Consultants, Inc., located in Lexington Kentucky, a provider of quality control post closing audit services to the mortgage industry for the past twenty-two years. Outsource Mortgage Consultants operates as a separate business unit of Regulatory Solutions under the Outsource Mortgage Consultants name. With this acquisition, the company increased its presence in the States of Kentucky, Indiana and North Dakota.
“Five years ago we started as two industry veterans who set out to provide practical real world regulatory compliance assistance to financial institutions and mortgage companies,” said Betsy Reynolds, president of Regulatory Solutions. “We now serve clients all over the Southeast and expect our growth to continue nationwide. It is an exciting time for us as we continue to serve our clients with quality regulatory solutions.”