Many violations are occurring because the ‘optional’ designation is not being used correctly. These forms cannot replace the Closing Disclosure. Unfortunately, many lenders have reported that the settlement agents they work with are failing to provide the seller’s Closing Disclosure, or provide inappropriate forms, like the HUD-1 or ALTA Settlement Statement. He or she must also provide the lender with a copy if the borrower and seller information is on a separate form. Many lenders are producing Loan Estimates and Closing Disclosure forms with the same issue date, and this is a clear violation of TRID’s new required timelines.ĬFPB regulations require the settlement agent to provide a closing disclosure to the seller. Issue Dates for the Loan Estimate and Closing DisclosureĪ common violation that’s been plaguing lenders has to do with the issue date on the Loan Estimate and Closing Disclosure. Today we’ll look at five common TRID violations identified by two attorneys, one of whom used to work for the CFPB.ġ. TRID violations have occurred, and all the violations have been completely avoidable. Though title companies like Champion Title have been helping lenders meet TRID requirements for months, many lenders have not been so fortunate. TRID has been in effect for nearly four months, and lenders are still adjusting to the new rules. FHA, however, will evaluate whether or not the correct forms were used in connection with the origination of FHA mortgages subsequent to the October 3, 2015, TRID effective date.5 Common TRID Violations, According to the Experts This Policy Statement reflects an expiration date of April 16, 2016. In his Blog Post dated October 20, 2015, my colleague Mike Vitali, SVP – Chief Compliance Officer for LoanLogics, discussed FHA’s recent announcement that they would not be including technical TRID compliance as an element of its routine quality control reviews. In other words, will the VA also be reviewing loan files for compliance with TRID regulations? Stay tuned. Unlike FHA (see summary below), the VA has not yet announced if they will now be reviewing files to determine if the Closing Disclosure was provided to the applicant at least 3 specific business days prior to closing, if the final Loan Estimate was provided to the consumer at least 1 day prior to the borrower’s receipt of the Closing Disclosure or if the amounts collected at closing match (or are within the allowable tolerances) from what was disclosed to the applicant on the last bona fide Loan Estimate. The new stacking order documents are attached to the above-referenced Circular Letter as Exhibit A and Exhibit B.Īlthough it is clear that the VA will now require the Closing Disclosure for transactions in which the loan application was taken on and after October 3, 2015, their Circular Letter is silent on the topic of whether or not the VA will begin performing technical TRID compliance as part of their “full file reviews”. The VA has revised its mandatory stacking order for purchases/cash-out refinances and interest rate reduction refinance loans (IRRRLs), to include the Closing Disclosure. Files that do not have the Closing Disclosure will be returned to the lender for proper closing documents. The HUD-1 Form will no longer be required. In their Circular Letter 26-15-24, the Veterans Administration (VA) has stated that, for loan applications taken on or after October 3, 2015, the loan file MUST contain the new Closing Disclosure. Outlined below is a summary of this guidance for each Agency: In this regard, both VA and FHA have provided some guidance to lenders as to the expectations and current review requirements for loan transactions that had loan applications taken on, or after, October 3, 2015. Now that it has been a little over a month since the official TILA-RESPA Integrated Disclosure (TRID) implementation date, many loan transactions are now closing which are subject to the new TRID rules and use of the TRID required forms (i.e.