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Tag Archive for: TRID

Posts

Compliance, News

What’s in Your TRID?

Or better yet, what’s not in your TRID?  It’s the never-ending saga between a mortgage lender who is trying to keep the customer happy, the mortgage processor who has nightmares about LE’s and CD’s, the auditor who plays the “gotcha” game, and the applicant who is trying to make sense of it all.  Therefore, it becomes imperative that all information contained in these complex disclosures are complete and accurate as possible. And whatever is not in your TRID can get you in trouble.

It has only been a few short years ago, five to be exact, when TRID was first introduced.  One would think after this year’s onslaught of mortgage refinances, mortgage processing staff would be experts in this regulatory field, but recent findings by the FDIC suggest otherwise. In fact, 86% of all compliance exams in 2019 (WI) had violations of TRID. Everything from loan costs, general information, calculating cash to close and closing cost details is fair game when it comes to making inadvertent mistakes.

So, what is a banker to do? First, select the best LOS system and test your defaults for accuracy including fees and third-party providers, including any updates considering our new era of refinance business. Building your system to be bulletproof from clerical errors may be your first line of defense.  Second, look for red flags within your disclosure that are relevant. For example, are you disclosing estimated PMI premiums on the initial LE when the estimated value exceeds 80%? Does the LE figures on your CD match the last revised LE issued to the customer? Third, be aware of when Taxes and Home-Owners Insurance is due and possibly considered a pre-paid, especially for loans that will close in the coming weeks. Lastly, don’t let your processor(s) make any changes to TRID documents that don’t follow the protocols of your LOS system. While bankers are always looking for workaround solutions, making hard changes to a TRID document can have negative and costly effects. 

Choosing the right LOS, being fully trained on TRID and utilizing resources to review your TRID documents and processes may keep your bank out of the 86% of financial institutions struggling to comply.  What is in your TRID (or not in your TRID) will make all the difference.  For further assistance on complying with this regulation, please contact me at jschmid@fipco.com.

By, Ally Bates

December 22, 2020/by Jose De La Rosa
https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg 0 0 Jose De La Rosa https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Jose De La Rosa2020-12-22 14:27:132021-10-13 14:40:03What’s in Your TRID?
Compliance, Resources

TRID 2.0 – Disclosing Inspection/Draw/Handling Fees for Construction Loans

The below article is the Special Focus section of the November 2018 Compliance Journal. The full issue may be viewed by clicking here.

Complying with TRID 2.0 became mandatory on October 1, 2018. TRID 2.0 represents the first set of major changes to the TILA/RESPA Integrated Disclosure Rule (TRID) since its inception back in 2015. These changes primarily addressed areas of TRID 1.0 which left a lot to be desired – disclosures for construction loans and simultaneous subordinate liens.  Lucky for banks, a number of these changes (e.g. the dreaded Cash to Close table) were, in all likelihood, addressed by your vendor. However, certain changes require bank intervention or, at the very least, bank knowledge. One of those changes is the disclosure of inspection/draw/handling fees for the staged disbursement of construction loan proceeds.  Under revised TRID rules, how you disclose inspection/draw/handling fees depends upon when those fees are collected from the consumer. Banks should also be aware of how these changes affect tolerance calculations.

In a construction or construction to permanent loan, banks or title companies often assess an Inspection/Draw/Handling fee (or separate, itemized fees) for the staged disbursement of construction loan proceeds. If such fees are collected from the consumer at or before closing, such fees are disclosed on the Loan Estimate and Closing Disclosure as usual – in the Loan Costs table in sections A, B, or C, as appropriate. Under revised TRID rules, however, if these fees are collected from the consumer AFTER closing (either by the bank or third party, such as a title company), the Inspection/Draw/Handling Fee(s) must be disclosed on a separate Addendum, which must accompany the Loan Estimate and Closing Disclosure. The Addendum must be titled “Inspection and Handling Fees Collected After Closing”. Importantly, irrespective of how these fees are collected – before, at, or after closing – a bank must list the fees on the Written List of Providers (a.k.a. Shopping List) if the consumer has the ability to shop for the services, according to informal guidance provided by CFPB.

It appears that CFPB modified the disclosure requirements for Inspection/Draw/Handling Fees collected post-closing in order for such fees to be more accurately reflected in the disclosures on the Loan Estimate and Closing Disclosure. For example, if an Inspection/Draw/Handling Fee is collected from the consumer after closing, certainly that fee should not affect the “Cash to Close” calculation. To this end, CFPB did provide the following guidance for Inspection/Draw/Handling fees collected post-closing and disclosed on an Addendum:

  • Such fees are considered “loan costs.” Therefore, such fees should be included in the Total of Payments calculation and the In 5 Years calculation.
  • Such fees are finance charges and are included as finance charges anywhere a finance charge is included on the disclosures (e.g. in the APR calculation), except these fees should be excluded from all Cash to Close calculations on the disclosures.
  • If such fees are withheld from the proceeds of the credit, the fees are prepaid finance charges and the Amount Financed Calculation should reflect the fee(s).  Otherwise – that is, if a post-closing Inspection/Draw/Handling fee is not a prepaid financed charge – the Amount Financed calculation should not reflect these fees.  

Finally, it’s important to note the impact on tolerance calculations for Inspection/Draw/Handling fees under revised TRID rules.  

  1. Inspection/Draw/Handling Fees Collected at or before Consummation. First, if these fees are disclosed in the Loan Costs Table because they are collected at or before closing, they are subject to tolerance just like any other fees disclosed in the Loan Costs table. That is, the tolerance standard is zero, 10%, or unlimited.  No change under TRID 2.0.  
  2. Inspection/Draw/Handling Fees Disclosed on an Addendum and Collected Post-Closing. If an Inspection/Draw/Handling fee is disclosed on an Addendum (because it’s intended to be collected post-closing) and such fees are actually collected post-closing, the best information reasonably available standard applies. Therefore, no tolerance violation will occur.  
  3. Post-Closing Inspection/Draw/Handling Fees Change Between Addenda.  According to informal guidance provided by CFPB, if a post-closing inspection/draw/handling fee amount changes between the time an Addendum is issued with the Loan Estimate (or a revised disclosure) and the Addendum issued with the final CD, a conservative reading of the rule is that the fees disclosed on the Addenda may not be governed by the “best information reasonably available standard”. Rather, the fees will be governed by the tolerance category that would apply to those loan costs absent an Addendum.  That is, the fees could be subject to 10%, 0%, or unlimited tolerance depending on whether or not the fee is an origination charge and whether or not shopping is permitted/the customer shopped.  Put simply, the tolerance is based on whether the fee would be located in Loan Costs section A, B, or C if there wasn’t an Addendum.  

Banks should also note that if there is a change to when an Inspection/Draw/Handling Fee will be collected from the consumer, this will likely be a changed circumstances and tolerance will reset for the Inspection/Draw/Handling fee(s). For example, Bank issued a Loan Estimate and disclosed a Draw fee on an accompanying Addendum because Title Company, who was managing the draws, planned to collect the amount from the consumer post-closing.  Two days after the Loan Estimate is issued and weeks before the Closing Disclosure must be issued, Bank decides it will now manage the draws itself and will be collecting the Draw fee from the consumer at closing. According to informal guidance provided by CFPB, this is likely a changed circumstance and, as such, the Bank may reset tolerance for the Draw fee with the issuance of the appropriate disclosure (here, a revised Loan Estimate). The revised disclosure should list the Draw fee in the Loan Costs section, in A, B, or C, as appropriate.  

In summary, banks should familiarize themselves with these changes, as applicable to their practices. In addition, it’s important to ensure that your vendor is capable of managing the bank’s construction lending practices for the assessment of Inspection/Draw/Handling fees.

WBA wishes to thank Atty. Lauren C. Capitini, Boardman & Clark, llp for providing this article. 

By, Ally Bates

November 27, 2018/by Jose De La Rosa
https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg 0 0 Jose De La Rosa https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Jose De La Rosa2018-11-27 17:47:102021-10-13 13:47:19TRID 2.0 – Disclosing Inspection/Draw/Handling Fees for Construction Loans

Events

Compliance, Internal Audit, Lending, Mortgage Lending, Webinar

Mastering TRID: Navigating Loan Estimates & Changed Circumstances

Change happens in every aspect of our life, and the mortgage loan process is no exception. Changes happen for a variety of reasons. Whether they are initiated by the borrower or information relied on by the lender was changed or was inaccurate, your bank must be prepared to recognize opportunities to issue a revised Loan Estimate that enables critical tolerance levels to be reset as a result of a valid changed circumstance.

Join us as we review what defines valid TRID changed circumstances and how to issue a revised Loan Estimate in a timely manner. Loan file documentation is critical to support the reason for the change and to clearly identify the fees that were directly impacted as a result of the situation. This webinar is designed to ensure that you are prepared to capture this opportunity to issue a revised Loan Estimate and properly support the lender’s reaction to a change.

What You’ll Learn

  • Recognize valid changed circumstances which permit the issuance of a revised Loan Estimate
  • Determine when a revised Loan Estimate must be issued
  • Distinguish when a revised disclosure was issued for informational purposes
  • Explain the timing requirements associated with a valid changed circumstance
  • Develop documentation to support resetting baselines for tolerance testing
  • Importance in documenting the fees impacted as a result of the changed circumstance

Who Should Attend
This webinar is designed for mortgage lenders, loan processors, loan review staff, auditors, and compliance officers.

Instructor Bio
Molly Stull
began her banking career on the teller line while working on her undergraduate degree and has continued working in the financial industry ever since. Some of her experience includes roles in operations, business resumption planning, consumer compliance, and conducting audits. Her favorite role is ensuring that her audience, whether on the sports field or in the financial industry, understands the “why” behind the rule. Her wealth of financial knowledge and her numerous years of experience enable her to relate the material to the audience.

Registration Option

  • Live Access, 30 Days OnDemand Playback, Presenter Materials and Handouts – $279
  • Available Upgrades:
    • 12 Months OnDemand Playback + $110
    • 12 Months OnDemand Playback + CD  + $140
    • Additional Live Access + $75 per person
February 24, 2023/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg 0 0 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2023-02-24 11:06:362023-02-24 11:06:36Mastering TRID: Navigating Loan Estimates & Changed Circumstances
Commercial Lending, Compliance, Internal Audit, Mortgage Lending, Risk Management, Webinar

TRID A-Z Seminar OnDemand with Live Streaming

This webcast will take a look at the TRID from A to Z and take your TRID compliance to the next level. All from the convenience of your own home or office via Live Streaming Video.

Covered Topics

  • How to Complete the Loan Estimate & Closing Disclosure
  • Shopping Requirements & Restrictions
  • Changed Circumstances
  • Revising Loan Estimates & Closing Disclosures
  • TRID for Construction Loans
  • Fees & Charges – What, Where, When, Why & How
  • Latest Updates, Guidance & Much More!

Training Day Agenda (Subject to Change)

9:00 am – 10:15 am CT (15 minute break)

Applications, Disclosures, Intent, Good Faith & Shopping
10:30 am – 12:00 pm CT (45 minute lunch break)

Loan Estimates
12:45 pm – 2:15 pm (15 minute break)

Revising the Loan Estimate
Closing Disclosures
2:30 – 4:00 pm

Closing Disclosures (Continued)
Construction
Revising the Closing Disclosure
Tolerance Cures & Other Misc. TRID

Attend this TRID A-Z streaming event from the convenience of your own home or office via Live Streaming Video as it happens on Thursday, April 28th (9:00 am – 4:00 pm Central Time), or at your own convenience with 12 months of OnDemand playback.

The TRID rules are complicated which can ultimately lead to errors and put your bank at risk. This webinar will take a look at TRID from beginning to end and everything in between. This is a great opportunity to take an in-depth look at TRID get your TRID compliance on the right track!

Who Should Attend
This webinar is designed for consumer real estate loan officers, loan processors, and compliance and audit personnel.

Instructor Bio
Jerod Moyer is the leader of Banker’s Compliance Consulting’s training productions. He is a nationally recognized speaker. Whether it’s a conference, seminar, school, webinar or luncheon, it’s easy to stay engaged when he presents due to the amount of passion and energy he brings to each and every compliance topic. Moyer has spoken on behalf of the American Banker’s Association, BankersOnline, many state banking associations, private compliance groups and financial institutions. He is a Certified Regulatory Compliance Manager (CRCM) and BankersOnline Guru.

Moyer likes to spend his time (between reading regulations and producing compliance training!) relaxing at the lake with his wife and three children, following their activities or engaged in something sports related!

Registration Option
Access the recording for 12 months $1049

March 25, 2022/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg 0 0 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2022-03-25 11:55:172022-04-04 12:40:52TRID A-Z Seminar OnDemand with Live Streaming
Compliance, Internal Audit, Lending, Senior Management, Webinar

Fair Lending Seminar OnDemand with Live Streaming

Attend the Fair Lending Seminar from the convenience of your own office or home via Live Streaming Video as it happens on Wednesday, January 26th (9:00 am – 4:00 pm Central Time), or at your own convenience with 6 months of OnDemand playback.

Fair lending continues to be THE hot topic in 2022. The new administration and leadership have been outspoken in their new priorities and goals. This means new requirements and increased enforcement to monitor. Are you keeping up with all the changes that will impact your institution? It is more critical now than ever to ensure your fair lending program covers all the bases. There are new ways of looking at lending patterns, activities, and risks, and new expectations from the agencies.

This full-day streaming event will encompass an in-depth examination of fair lending principles, expectations, and techniques. We’ll explore what’s new in the area of fair lending, to new interpretations of protected classes, to future potential legislation. We’ll also cover aspects of formulating and maintaining an effective fair lending risk assessment, a critical component of an institution’s fair lending compliance program. We’ll also explore the many risks and hot spots to monitor for fair lending, and discuss how to best comply with the new requirements and expectations. We’ll ensure you’re ready for your next fair lending compliance examination so you can put your best foot forward.

Covered Topics

  • Fair lending legal and regulatory structure – where these requirements come from
  • Expansion of fair lending priorities and expectations – from Congress as well as the regulatory agencies
  • Prohibited bases under the rules (what you can do, as well), including changes in definitions – including examples and scenarios
  • Fair lending throughout the lending process – from A to Z
  • Marketing considerations – putting your best foot forward
  • Evaluating applications and underwriting – what you can and cannot consider
  • Government monitoring information – when to get it and how to handle it, including the new URLA/1003 application form
  • Fair lending litigation trends and lessons, including re-emphasis of disparate impact (including a return to how disparate impact is considered)
  • Redlining (including reverse redlining) – what is it, how do we analyze it, and what is new (hint: plenty)
  • “Intrabank” vs. “Interbank” redlining analyses, including the opportunity assessment – what are the standards?
  • Digital redlining – what is this and how does it impact your institution? How to look at redlining in the digital age
  • Fair lending and appraisals
  • REMA/Marketing Area/Service Area – what is this? What should we do to be ready for our next exam?
  • Dealing with small business loans
  • Treatment of income and other underwriting issues
  • Fair lending issues in the servicing environment, especially debt collection, default management, and foreclosures
  • Proxies and the BISG method – should we do this?
  • Foreign language and LEP issues – what are the rules?
  • DFA 1071 – understanding what the requirements will be
  • CRA as a fair lending tool
  • Developing an effective and comprehensive fair lending CMS
  • “Convergence” with UDAP/UDAAP – what should we do?
  • Fair lending in appraisals – what is coming?
  • Consequences

Who Should Attend?
Anyone in the institution having virtually any responsibility in the lending process has fair lending responsibilities, from senior management, loan officers, underwriters, and closing agents, to compliance officers, auditors, and attorneys, and would benefit from this valuable information.

Presenter

Carl Pry is a Certified Regulatory Compliance Manager (CRCM) and Certified Risk Professional (CRP) who is a Managing Director for Treliant LLC in Washington, D.C. Through his working career, as well as through his experience as a banking attorney and officer, he has provided a variety of regulatory compliance and financial performance services to financial institutions and other clients throughout the country. He has written extensively regarding consumer and commercial compliance, tax, audit, and financial institution legal issues, and is a frequent contributor to and currently serves on the Editorial Advisory Board for the ABA Bank Compliance magazine. He has spoken at scores of banking, compliance, and state bar associations, and has conducted training sessions for financial institutions across the country.
Attend the Fair Lending Seminar from the convenience of your own office or home via Live Streaming Video as it happens on Wednesday, January 26th (9:00 am – 4:00 pm Central Time), or at your own convenience with 6 months of OnDemand playback.

Registration Options

  • Live Plus Five (days) – $265
  • OnDemand Recording – $295
  • CD-ROM – $345
  • Live Plus Six (months) – $365
  • Premier Package – $395
January 7, 2022/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg 0 0 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2022-01-07 22:18:232022-01-07 22:18:23Fair Lending Seminar OnDemand with Live Streaming
Compliance, Internal Audit, Lending, Mortgage Lending, Webinar

Advanced TRID Compliance

The TRID rules are complicated which can ultimately lead to errors and put your bank at risk. This webinar will point out the more complex areas and will also bring your attention to areas that are notorious for errors. Consider this webinar your “cheat sheet” to get you on the right track BEFORE your next examination.

What You Will Learn

  • The Latest Guidance
  • The “Good Faith” Standard
  • Shopping
  • Loan Estimate Majors
  • Closing Disclosure Majors
  • Revising the Closing Disclosure
  • Delays and Waiting Periods
  • Tolerance Comparisons
  • Tolerance Cures
  • Best Practices

Who Should Attend?
This webinar is designed for consumer real estate loan officers, loan processors, and compliance and audit personnel.

Presenter
Jerod Moyer is the leader of Banker’s Compliance Consulting’s training productions. He is a nationally recognized speaker. Whether it’s a conference, seminar, school, webinar or luncheon, it’s easy to stay engaged when he presents due to the amount of passion and energy he brings to each and every compliance topic. Jerod has spoken on behalf of the American Banker’s Association, BankersOnline, many state banking associations, private compliance groups and financial institutions. He is a Certified Regulatory Compliance Manager (CRCM) and BankersOnline Guru.

Jerod likes to spend his time (between reading regulations and producing compliance training!) relaxing at the lake with his wife and three children, following their activities or engaged in something sports related!

Registration Options

  • Live Access, 30 Days OnDemand Playback, Presenter Materials and Handouts – $279
  • Available Upgrades:
    • 12 Months OnDemand Playback + $110
    • 12 Months OnDemand Playback + CD  + $140
    • Additional Live Access + $75 per person
December 14, 2021/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg 0 0 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2021-12-14 21:56:142022-12-23 09:58:04Advanced TRID Compliance

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