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If we are the lender on a mortgage loan subject to the TILA-RESPA Integrated Disclosure (TRID) rules, can we also act as the settlement agent? If so, should we list the bank’s name on the Closing Disclosure as the lender and as the settlement agent? Can we also leave the other “Settlement Agent” fields blank, including the File #?

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Yes, a lender may act as its own settlement agent. We are not aware of any federal or Illinois law that would prevent a financial institution from conducting its own mortgage loan closings, and in fact, this is a common practice at many institutions when closing second lien loans.

We do not believe that a bank conducting its own loan closings would need to fill out the “Settlement Agent” column and related disclosures, such as the Settlement Agent’s File Number. While the CFPB has not provided guidance directly on this point, it has stated in other contexts that it views a settlement agent as being a third party. Here, your bank is not engaging a third party to close the loan; in other words, there is no settlement agent for this transaction. Consequently, we think the “Settlement Agent” column should be removed or left blank, and related disclosures (such as the File Number) also can be left blank.

For resources related to our guidance, please see:

  • CFPB Final Rule, TRID Amendments, 82 Fed. Reg. 37656, 37721 (August 11, 2017) (“Because a settlement agent is actually a third party to the credit transaction . . . .”)
  • Regulation Z, 12 CFR 1026.38(r) (The Closing Disclosure must include “under the heading ‘Contact Information,’ the following information for each . . . settlement agent (under the subheading ‘Settlement Agent’) participating in the transaction: . . .”)
  • Regulation Z, Official Interpretations, Paragraph 38(r), Comment 1 (“Form H–25 of appendix H to this part includes the contact information required to be disclosed under § 1026.38(r) generally in a five-column tabular format (i.e., there are columns from left to right that disclose the contact information for the creditor, mortgage broker, consumer’s real estate broker, seller’s real estate broker, and settlement agent). Columns are left blank where no such person is participating in the transaction. For example, if there is no mortgage broker involved in the transaction, the column for the mortgage broker is left blank. . . .”)
  • Regulation Z, Official Interpretations, Section 38, Comment 1 (“Where a disclosure is not applicable to a particular transaction, form H-25 of appendix H to this part may not be modified to state ‘not applicable’ or ‘N/A.’ The portion of the form pertaining to the inapplicable disclosure may be left blank unless otherwise provided by § 1026.38. . . .”)