Topic: CFPB TILA-RESPA Integrated Disclosure (TRID) Rule
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Are we required to include the homeowner’s insurance premiums line on Page 2 of the Loan Estimate in Section F (Prepaids) for refinances?
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Yes, you are required to include the homeowner’s insurance premiums line on Page 2 of the Loan Estimate in Section F for refinances. Regulation Z requires that a new set of disclosures be provided whenever there is a refinancing, and in the Prepaids Section of the Loan Estimate (Section F on Page 2), the rule…
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Where is a third-party fee that is charged by a realtor to the borrower as part of the sales contract recorded on the Loan Estimate?
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A third party fee charged by a realtor should be recorded as “other costs” in Section H on the Loan Estimate if the creditor is aware of the fee when the Loan Estimate is issued. For citations related to our guidance, please see: Regulation Z, 12 CFR 1026.37(g)(4) (“Under the subheading ‘Other,’ an itemization of…
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What Illinois laws or regulations will affect TRID implementation?
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While there are many potential intersections between the TRID rules and Illinois law, so far we have found three areas where it is necessary to consult Illinois law in order to comply with the TRID rules: (1) Under the upcoming TRID rules, the new Closing Disclosure must state whether a consumer “may remain responsible for…
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Under the upcoming TRID rules, the new Closing Disclosure must state whether a consumer “may remain responsible for any deficiency after foreclosure.” Does Illinois law protect borrowers from personal liability for the unpaid loan balance after a judicial sale?
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No, Illinois law does not protect borrowers against deficiencies after the judicial sale. The Illinois Mortgage Foreclosure Law states that a foreclosure does not affect the lender’s right to obtain a personal judgment against the borrower in the event of a deficiency. A number of Illinois courts have permitted a mortgagee to pursue a money…
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Under the upcoming TRID rules, we must provide the Closing Disclosure three business days before “consummation” of the loan, and Regulation Z provides that state law governs when “consummation” occurs. What is the definition of “consummation” under Illinois law?
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Under Illinois case law, a mortgage loan is consummated on the date of the loan closing. A number of Illinois courts have held that consummation occurs on the date of the loan closing for purposes of the TILA. For resources related to our guidance, please see below: Personius v. Homeamerican Credit, Inc., 234 F.Supp.2d 817, 820…
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If we need to force-place property insurance for a mortgage loan, or if the borrower fails to pay property taxes, can we add those amounts to the borrower’s periodic payments for the next twelve months? Our mortgage documents state that we may add force-placed insurance charges to the loan, but they do not state that we may charge the borrower for our payment of delinquent taxes (although the agreement does require the borrower to pay the taxes).
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Force-Placed Insurance Premiums Yes, we believe you may reamortize the loan and add the amount of the force-placed premiums to the borrower’s periodic payments, since your loan agreements permit you to add such premium payments to the loan amount. Delinquent Property Tax Payments The answer is less clear regarding delinquent property tax payments, since your…
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Under the CFPB’s upcoming TILA/RESPA Integrated Disclosure (TRID) rules, should we include attorneys’ fees and home inspection fees on the Loan Estimate and the Closing Disclosure if we do not require either of these services?
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Inspection Fees The TRID rules require you to disclose home inspection fees on the Loan Estimate and Closing Disclosure if the fees are paid at closing and if your institution is “aware” of the fees, even when you do not require those services. The Staff Interpretation of the rule states that a creditor is “aware”…
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We are in the process of implementing the new integrated mortgage disclosure rules. Our forms vendor for prompted us to check state law as to whether a loan document for a consumer mortgage loan can state that a late charge will be assessed when a payment “is more than # days late” instead of “# days or more late.”
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We are not aware of any requirements under Illinois law as to the number of days for computing a late charge or the exact wording of your loan agreements regarding late charges. If your late charge practices match the language in your loan documents for late charges, and your late charges otherwise comply with all…