Tag Archives: closing statement

The Top 10 Things Real Estate Agents Need to Know About TRID/Know Before You Owe

Real Estate Agents need to review and become familiar with the Closing Disclosure in order to answer buyer and seller questions

By Jeff Sorg, OnlineEd Blog

canstockphoto14866114un-known(December 23, 2015) – Every real estate agent should get familiar with the TILA-RESPA integrated disclosure forms. These new Loan Estimate and Closing Disclosure forms are required for most mortgage loan applications. While it is the job of the lender or settlement agent to complete the forms, these are the top ten things real estate agents should know about the TILA-RESPA Integrated Disclosures:

  1. A closing statement form called the Closing Disclosure (CD) is used for most mortgage loan applications. In most cases, the lender, not the settlement agent, will prepare and deliver the CD.
  2. The CD must be delivered to the consumer at least three business days before the scheduled closing date.
  3. The settlement agent should send settlement information to the lender 10 to 14 days before the closing date for the lender to prepare of the CD and meet its delivery requirements. Real estate agents should also communicate all buyer paid charges to the settlement agent 14 days before the closing date.
  4. The settlement agent will need to include on the CD the real estate agent’s company license number and the agent’s real estate license number. Consider including these numbers as part of your email signatures and on your letterheads.
  5. The CD sent to the consumer will not include the seller’s side of the transaction. The settlement agent will be responsible for completing and delivering the seller’s side of the CD.
  6. If the real estate agent wants a copy of the CD it will need to be obtained from the consumer; the settlement agent is not allowed to send a copy of the CD to the real estate agent.
  7. Changes to the CD after delivery to the consumer might trigger a new three-day waiting period, if changes cause the Annual Percentage Rate to be inaccurate, the buyer changes loan products or a prepayment penalty is added to the loan. Under the Equal Credit Opportunity Act (ECOA), changes and adjustments affecting property value might also trigger additional disclosure and review periods.
  8. In some circumstances, the CD will refer to Owner’s Title Insurance as “optional.” The consumer should be advised to obtain appropriate advice for from their title insurance agent for the protections given to them by purchasing owner’s title insurance.
  9. TRID rules may affect the sale agreement terms that real estate agents negotiate for either the buyer or seller. For example, a closing 30 days out may no longer be realistic. The best advice is to communicate with the lender and the closing agent to determine a realistic time frame for closing every transaction.
  10. A system should be in place to communicate changes to the sale agreement after it is signed and sent to the lender. Buyers should also be advised to respond immediately to lender requests.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

 All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

TILA – RESPA Integrated Disclosure – Part 4 of 5: Curing Tolerances

Curing Tolerances

 (Part 4 of 5)

(Jeff Sorg, OnlineEd) – On the Loan Estimate, certain charges are not subject to a tolerance limitation. This means that the amount charged the consumer may exceed the amount disclosed on the Loan Estimate by any amount. Examples of these charges are:

  • Prepaid interest, property insurance premiums, amounts placed into escrow, impound, reserve, or similar type accounts;
  • Services required by the creditor if the creditor permits the consumer to shop for such services and the consumer selects a third-party service provider not on the creditor’s written list of service providers; and
  • Charges paid to third-party service providers for services not required by the creditor.

However, at consummation, creditors may only charge more than the amount disclosed on the Loan Estimate, provided the original estimate was based on the best information reasonably available at the time of the Loan Estimate disclosures.

Some charges are subject to a 10% cumulative tolerance. The charges subject to this tolerance limit are:

  • Recording fees;
  • Charges for third-party services where the charge is not paid to the creditor or the creditor’s affiliate; and
  • Charges that arise out of the consumer’s shopping for required services where the creditor allows the consumer to shop for and contract with that service provider that is not on the creditor’s written list of providers.

There are other charges that are subject to the zero tolerance rule. In the case of these items, the creditor may never charge more than the estimated amount, unless there is a changed circumstance or other triggering event. The items in this zero tolerance category are:

  • Fees paid to the creditor, mortgage broker, or affiliate of either;
  • Fees paid to an unaffiliated third party if the creditor did not permit the consumer to shop for a required service and had to use the service provider of the creditor; and
  • Transfer taxes.

If the amounts paid by the consumer at closing exceed the amounts disclosed on the Loan Estimate beyond the permissible applicable tolerance threshold, the creditor is required to refund the excess to the consumer no later than 60 days after consummation and deliver or place in the mail to the consumer a corrected Closing Disclosure that reflects the refund.

For zero tolerance charges, any amount charged beyond the amount disclosed on the Loan Estimate must be refunded to the consumer. With regard to the 10% tolerance charges, to the extent that the total sum of the charges added together exceeds the sum of all such charges disclosed on the Loan Estimate by more than 10%, the difference must be refunded to the consumer.

 

(Part 1. Part 2. Part 3. Part 4. Part 5)

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

  This article was published on July 21, 2015. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.