The CFPB has issued proposed revisions to the final TILA-RESPA Integrated Disclosure TRID Rule (“TRID Rule”). The proposed amendments contain substantive changes on various issues and include clarifications and technical amendments. According to the CFPB, the intent of this proposal is to integrate some of the informal guidance the CFPB has periodically issued since the regulations were finalized in November 2013, through webinars, compliance guides, and sample disclosures into the TRID Rule to resolve outstanding implementation issues.
Comments on the proposal are due on or before October 18, 2016. All mortgage industry participants are strongly encouraged to submit written comments. The CFPB specifically seeks comments on when the proposed changes should be effective and how much time is necessary to execute the proposed changes. The CFPB is also requesting comment on whether there is a preferred time of the year for the changes to become effective and if certain changes should have a separate effective date. The CFPB intends for the final rule based on this proposal to become effective 120 days after publication in the Federal Register, which is anticipated to be promulgated on or before April 1, 2017.
The amended provisions cover a wide range of topics, including the following:
- Addressing the so-called “black hole” by clarifying that a revised Closing Disclosure can be issued before closing if a valid triggering event occurs, provided the delivery timing requirements for the Closing Disclosure are satisfied;
- Addressing and clarifying the applicability of tolerances for the total of payments disclosure based on the finance charge tolerance;
- Revising the scope of the TRID Rule to apply to cooperative units, regardless of whether a cooperative unit is treated as real property under state law;
- Adjusting the partial exemption for certain subordinate lien loans that are made for the purpose of down payment assistance;
- Clarifying the sharing of the Closing Disclosure with realtors and other parties involved the mortgage origination process in light of the Gramm-Leach Bliley Act (GLBA) privacy provisions;
- Clarifying certain requirements regarding the written settlement service providers list (“SSP List”), including proposing that if a lender does not provide a proper SSP List, related charges will be subject to zero tolerance;
- Making various technical changes regarding construction loans, including clarifying that in cases where a creditor elects to disclose a construction financing as one transaction, a creditor must allocate to the construction phase all amounts that would not be imposed but for the construction financing; and
- Clarifying that a lender is not required to issue a corrected Closing Disclosure if the actual per diem interest differs from the estimate amount, provided that the per diem interest disclosed in the Closing Disclosure was based on the information known to the lender at the time the disclosure was prepared.
In addition, the proposal contains minor changes and technical corrections that address a number of areas, including: affiliate charges; the calculating cash to close table; decimal places and rounding; escrow account disclosures; escrow cancellation notices; expiration dates for the closing costs disclosed on the Loan Estimate; gift funds; the “5 Years” calculation; lender and seller credits; lenders’ and settlement agents’ respective responsibilities; the list of service providers; model forms; non-obligor consumers; partial payment policy disclosures; payment ranges on the projected payments table; the payoffs and payments table; payoffs with a purchase loan; post-consummation fees; principal reduction (principal curtailment); disclosure and good-faith determination of property taxes and property value; rate locks; recording fees; simultaneous second lien loans; the summaries of transactions table; the total interest percentage calculation; and trusts.
Two notable absences from the proposal are revisions that would alter the disclosure of title insurance premiums when the lender and owner policies are issued simultaneously and cure provisions. According to the CFPB, the “Bureau is concerned that further definition of cure provisions would not be practicable without substantially undermining incentives for compliance with the rule.”
The proposed amendments to the TRID Rule are available at: http://www.consumerfinance.gov/policy-compliance/rulemaking/rules-under-development/amendments-federal-mortgage-disclosure-requirements-under-truth-lending-act-regulation-z.