Topic: CFPB TILA-RESPA Integrated Disclosure (TRID) Rule
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If a mortgage loan borrower intends to rent their property out but also will live there for more than fourteen days, would the loan be considered “consumer credit” for TRID purposes since it does not qualify as non-owner-occupied rental property?
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We do not believe that a loan automatically is considered consumer credit under Regulation Z if the borrower intends to rent out the property but also live there for more than fourteen days in the coming year. The official commentary to Regulation Z establishes a special rule for non-owner-occupied rental property, providing that “[c]redit extended…
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Do we have to follow the TRID requirements for a consumer loan secured by ten acres of property and a cabin with no indoor bathroom that will be vacant 95% of the time? The borrower intends to visit the property only a few times a year to get out of the city and fish and will not be using the cabin as a personal residence. However, the borrower may rent it out through Airbnb at some point in the future.
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We believe you must provide the borrower with disclosures under the TILA-RESPA Integrated Disclosure (TRID) rule. Regulation Z requires creditors to provide borrowers with a loan estimate and closing disclosure under the TRID rule for each “closed-end consumer credit transaction secured by real property or a cooperative unit, other than a reverse mortgage.” It is…
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We made a commercial construction loan that converted to a closed-end mortgage loan with a balloon payment. The loan was for the construction of a condo unit that the developer initially intended to sell or rent out for income. After origination, the developer decided to move into the property as their primary residence. The loan is now reaching maturity. Can we extend the maturity date without triggering the requirement to provide TRID disclosures?
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We believe you may modify the mortgage loan to extend the maturity date without providing disclosures under the TILA-RESPA Integrated Disclosure (TRID) rule, provided that you do not satisfy and replace the existing mortgage loan with a new transaction. Under Regulation Z, if a business purpose loan is later rewritten for consumer purposes, “[s]uch a…
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We believe that creditors must request the six pieces of information constituting an application under Regulation Z in their online mortgage loan applications. However, our loan originators and vendors claim that it is a common practice for online applications to omit property address for purchases and property value for refinancings. Is this practice allowed by Regulation Z?
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We do not believe that creditors are required to collect the six items of information that make up an application all at once or in a single online form, as a creditor may collect the six items in the order that best suits its needs. Consequently, we believe that the practice of omitting certain data…
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How should we disclose the Illinois Department of Revenue’s Rental Housing Support Program surcharge, which county recorders collect with each mortgage recording? Is the surcharge exempt from the finance charge calculation, and should it be disclosed in the “Taxes and Other Government Fees” section of the Loan Estimate (LE) and Closing Disclosure (CD)?
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We believe that the Rental Housing Support Program surcharge is exempt from the finance charge calculation and should be disclosed in the “Taxes and Other Government Fees” section of the LE and CD. Regulation Z provides that taxes and fees prescribed by law that actually are or will be paid to public officials for perfecting…
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Where should the $3 mandatory title fee be disclosed on the Loan Estimate? Should this be disclosed in “Section B. Services You Cannot Shop For” or in “Section C. Services You Can Shop For”? We believe it should be Section B since the fee is applicable in every transaction with a title policy and is always $3.
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We believe the $3 mandatory title fee, which is required by Illinois law, should be disclosed in “Section E. Taxes and Other Government Fees.” The Illinois Title Insurance Act requires title insurance companies to remit to the state of Illinois “an amount equal to $3 for each policy issued by all of its agents in…
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What disclosures are we required to make available on our bank’s website?
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Below is a non-exhaustive list of the disclosures and notices that you may choose to post or may be required to post on your bank’s website. This list may be incomplete depending on the products and services you offer or advertise on your website, some of which may trigger additional disclosure requirements. Privacy Notices The…
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We are extending a purchase money mortgage loan to a borrower whose sales contract states that the seller will pay a $10,000 credit at closing for foundation repairs to the property. The borrower will be responsible for scheduling the repairs and hiring a contractor, and the seller will not be responsible for any additional expenses. We are going to hold the $10,000 in escrow until the repairs are complete, and we do not want these funds to reduce the amount the borrower needs to bring to the closing. Do we need to disclose the seller credit on the Loan Estimate (LE), and where should we list it on the Closing Disclosure (CD)?
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We believe that disclosing the seller credit for repairs on the LE is optional and that you should list the seller credit in Section N (“Due from Seller at Closing”) of the CD. For the LE, Regulation Z’s Official Interpretations provide lenders with two options for addressing a seller credit. When the lender knows that…
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For a consumer-purpose construction loan, how should we calculate the cash to close under the TRID requirements? Should we include only the cash the customer will bring at closing, or should we include the total amounts paid by the borrower for the construction and closing costs? May we put the amount of funds available for construction draws in the payoff section of the Loan Estimate and Closing Disclosure?
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We believe that for consumer-purpose construction loans, construction costs, as well as construction inspection and handling fees (depending on when they are collected), must be factored into the Cash to Close calculation. Additionally, we believe that construction holdbacks may be disclosed separately from other construction costs in the Payoffs and Payments disclosures. The CFPB’s TRID…
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If we have more than 14 settlement services that an applicant is allowed to shop for, are we required to include an addendum to the Loan Estimate (LE) disclosing the remaining settlement services? Or should we just label line 14 “Additional Charges”? Either way, should all of the settlement services still be disclosed on the Service Provider List?
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We believe that if you have more than 14 items in the “Services You Can Shop For” section of the LE (Section C), you should either include an addendum with the remaining items or disclose the remaining charges in line 14 as an aggregate amount labeled as “Additional Charges.” Regulation Z requires creditors to itemize…