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TRID Facts
provided by
NAMB
The Association of Mortgage Professionals
www.namb.org
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What transactions does the rule
cover? (§ 1026.19(e) and (f))
The
TILA-RESPA rule applies to most closed-end consumer credit transactions
secured by real property. Credit extended to certain trusts for tax or
estate planning purposes is not exempt from the TILA-RESPA rule.
(Comment 3(a)-10). However, some specific categories of loans are
excluded from the rule. Specifically, the TILA-RESPA rule does not
apply to HELOCs, reverse mortgages or mortgages secured by a mobile
home or by a dwelling that is not attached to real property (i.e.,
land). (§ 1026.19(e) and (f))
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Can a creditor use the new
Integrated Disclosures for applications received before October
3, 2015?
No. For transactions where the
application is received prior to October
3, 2015, creditors will still need to follow
the current disclosure requirements under Regulations X and Z, and use
the existing forms (Truth-in-Lending disclosures, GFE, HUD-1).
In addition,
certain loan types will be required to continue to use the current GFE,
TIL and HUD-1 forms.
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What is an “application” that
triggers an obligation to provide a Loan Estimate? (§ 1026.2(a)(3))
An application means the submission
of a consumer’s financial information for purposes of obtaining an
extension of credit. For transactions subject to § 1026.19(e), (f), or
(g), an application consists of the submission of the following six
pieces of information:
- The consumer’s name;
- The consumer’s income;
- The consumer’s social security number
to obtain a credit report;
- The property address;
- An estimate of the value of
the property; and
- The mortgage loan amount
sought.
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What
is considered a “business day” under the requirements for provision of
the Loan Estimate? (Comment 19(e)(1)(iii)-1, § 1026.2(a)(6)) For
purposes of providing the Loan Estimate, a business day is a day on
which the creditor’s offices are open to the public for carrying out
substantially all of its business functions. (Comment 19(e)(1)(iii)-1,
§ 1026.2(a)(6)) Note
that the term business day is defined differently for other purposes;
including counting days to ensure the consumer receives the Closing
Disclosure on time. (See §§ 1026.2(a)(6), 1026.19(f)(1)(ii)(A) and
(f)(1)(iii)). For these other purposes, business day means all calendar
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. (See §
1026.2(a)(6); Comment 2(a)(6)-2; Comment 19(f)(1)(ii)-1) |
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Are there any restrictions on how many days before consummation a revised Loan Estimate may be provided? (§ 1026.19(e)(4)) Yes. - The creditor may not provide a revised Loan Estimate on or after the date it provides the Closing Disclosure.
- The
creditor must ensure that the consumer receives the revised Loan
Estimate no later than four business days prior to consummation. If the
creditor is mailing the revised Loan Estimate and relying upon the 3
business day mailbox rule, the creditor would need to place in the mail
the Loan Estimate no later than seven business days before consummation
of the transaction to allow 3 business days for receipt. (§ 1026.19(e)4
; Comment 19(e)(4)(i)-2)
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What are the general timing and delivery requirements for the Closing Disclosure? (§ 1026.19(f)) Generally,
the creditor is responsible for ensuring that the consumer receives the
Closing Disclosure form no later than three business days before
consummation. (§ 1026.19(f)(1)(ii)(A); Comment 19(f)(1)(v)-3) (Although
see section 11.4 below regarding delivery of the Closing Disclosure by
a settlement agent) The
creditor also is responsible for ensuring that the Closing Disclosure
meets the content, delivery, and timing requirements discussed in
sections 10, 11, and 12 of this guide. (§§ 1026.19(f) and 1026.38) |
| When is the Closing Disclosure considered to be received if it is delivered in person or if it is mailed? (§ 1026.19(f)(1)(iii)) If
the Closing Disclosure is provided in person, it is considered received
by the consumer on the day it is provided. If it is mailed or delivered
electronically, the consumer is considered to have received the Closing
Disclosure three business days after it is delivered or placed in the
mail. (§ 1026.19(f)(1)(iii); Comment 19(f)(1)(ii)-2) However,
if the creditor has evidence that the consumer received the Closing
Disclosure earlier than three business days after it is mailed or
delivered, it may rely on that evidence and consider it to be received
on that date. (Comments 19(f)(1)(iii)-1 and -2) (See also discussion
above in section 6.4 of this guide on similar receipt rule under §
1026.19(e)(1)(iv) and commentary regarding the Loan Estimate.) | | Does
the three-business-day waiting period apply when corrected Closing
Disclosures must be issued to the consumer? (§ 1026.19(f)(2)(i) and
(ii)) Yes, in some circumstances. The three-business-day waiting period requirement applies to a corrected Closing Disclosure that is provided when there are: - Changes to the loan’s APR;
- Changes to the loan product; or
- The addition of a prepayment penalty.
If
other types of changes occur, creditors must ensure that the consumer
receives a corrected Closing Disclosure at or before consummation. (§
1026.19(f)(2)(i) and (ii)) | | When are creditors required to correct or revise Closing Disclosures? (§ 1026.19(f)(2)) Creditors
must redisclose terms or costs on the Closing Disclosure if certain
changes occur to the transaction after the Closing Disclosure was first
provided that cause the disclosures to become inaccurate. There
are three categories of changes that require a corrected Closing
Disclosure containing all changed terms. (§ 1026.19(f)(2)) - Changes that occur before consummation that require a new three-business-day waiting period. (§ 1026.19(f)(2)(ii))
- Changes that occur before consummation and do not require a new three-businessday waiting period. (§ 1026.19(f)(2)(i))
- Changes that occur after consummation. (§ 1026.19(f)(2)(iii))
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creditors required to provide corrected Closing Disclosures if terms or
costs change after consummation? (§ 1026.19(f)(2)(iii)) Yes,
in some circumstances. Creditors must provide a corrected Closing
Disclosure if an event in connection with the settlement occurs during
the 30-calendar-day period after consummation that causes the Closing
Disclosure to become inaccurate and results in a change to an amount
paid by the consumer from what was previously disclosed. (§
1026.19(f)(2)(iii); Comment 19(f)(2)(iii)-1) When
a post-consummation event requires a corrected Closing Disclosure, the
creditor must deliver or place in the mail a corrected Closing
Disclosure not later than 30 calendar days after receiving information
sufficient to establish that such an event has occurred. (§
1026.19(f)(2)(iii); Comment 19(f)(2)(iii)-1) |
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