Tag Archives: trid

TRID Rule Reduces Mortgage Offerings, Causes Delays

Banks are still struggling to comply with the Consumer Financial Protection Bureau’s 2015 TILA-RESPA Integrated Disclosure rule

By Jeff Sorg, OnlineEd Blog

(March 3, 2016) – WASHINGTON — Banks are still struggling to comply with the Consumer Financial Protection Bureau’s 2015 TILA-RESPA Integrated Disclosure rule, or TRID, according to an American Bankers Association survey. The survey, conducted in February of this year, found that 25 percent of respondents have eliminated certain mortgage products because the rule does not provide enough clarity. Some of the offerings banks have eliminated include construction loans, adjustable rate mortgages, home equity loans or payment frequency options.

trid2.JPGMore than 75 percent of survey participants said loan closings are being delayed as a result of TRID. On average, those bankers reported a delay of 8 days with responses ranging from one to 20 days. More than 90 percent said front-boarding and loan processing times have increased.
“It’s clear from this survey and our discussions with bankers that TRID compliance remains a significant concern,” said Bob Davis, ABA executive vice president, mortgage markets, financial management and public policy. “Consumers are seeing the greatest impact due to increased loan costs, fewer choices and delayed closings – and that’s not what this rule was intended to do.”
Ninety-four percent of the 548 bankers who completed the survey believe the TRID “good faith” grace period should be extended.
“As we anticipated, our bankers are struggling to comply in part because the systems being provided by vendors are incomplete or inaccurate,” said Davis. “The causes of many of these systems problems are ambiguities in the TRID rule that require resolution.”
The survey found that 78 percent of respondents are still waiting for system updates from their vendors and 83 percent are forced to use manual workarounds.  About half of survey participants said their bank will have to or have already hired additional staff to comply with the new rule.
The bankers who participated in the survey represent a diverse group of banks in both geography and asset size.
Click here for the full survey report.
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The American Bankers Association is the voice of the nation’s $16 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $12 trillion in deposits and extend more than $8 trillion in loans.

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.

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.

7 Things Real Estate Brokers Need to Know About TRID

TRID, it’s really not all that complicated for the real estate broker

By Jeff Sorg, OnlineEd Blog

(Listen to this post in audio)

what you need to know(December 18, 2015) – TRID is an acronym for TILA/RESPA Integrated Disclosure and is part of Know Before You Owe – Mortgages, the CFPB’s mortgage initiative designed to help consumers understand their loan options, shop for the mortgage that’s best for them, and avoid costly surprises at loan closing. The TRID rules became effective October 3, 2015. Here are seven important things real estate brokers will want to know about TRID:

  1. The buyer’s settlement statement is now called the Closing Disclosure or CD. You will want to become familiar with this form so you can explain it to your buyer clients. View a pdf copy view the closing disclosure.
  2. Your settlement agent cannot send you a copy of the CD. If you want a copy, and you should, you will need to get it from your buyer.
  3. The CD must be delivered by the mortgage lender to the buyer at least three business days before closing.
  4. In limited circumstances, a change to the CD after it is delivered to the buyer might trigger a new three-day waiting period if the buyer changes loan products, a prepayment penalty is added, or the change causes the previously disclosed annual percentage rate to be inaccurate.
  5. Your settlement agent will need your real estate company’s license number and your personal real estate license number.
  6. You’ll want to get your settlement agent all of your buyer paid charges at least 10-to-14 days before closing so these can be communicated to the lender in order for the lender to prepare an accurate CD and meet the requirements for its delivery to the buyer.
  7. Plan on 45 day closings, and be sure to extend your purchase contracts if new waiting periods are triggered as you get close to this date.

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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.

Mortgage Customer Satisfaction Increases as Lenders Adopt New Technology

Overall satisfaction with mortgage application-related activities is higher among customers who used digital communication

By Jeff Sorg, OnlineEd Blog

customer satisfaction survey(Nov. 16, 2015) /PRNewswire/ — Overall mortgage customer satisfaction has increased this year as lenders have focused on developing functional digital channels and improving operational efficiency, according to the J.D. Power 2015 U.S. Primary Mortgage Origination Satisfaction Study(sm) released today.

Satisfaction is calculated on a 1,000-point scale, with the study measuring customer satisfaction with the mortgage origination experience in six factors:

  1. application/approval process;
  2. interaction;
  3. loan closing;
  4. loan offerings;
  5. onboarding; and
  6. problem resolution. .

Overall customer satisfaction with mortgage origination is up 7 points from 2014. The increase in satisfaction is driven by gains in the application and approval processes, influenced by improved perceptions of the speed of the loan process. When loans close earlier than promised, satisfaction is significantly higher, compared to when loans close as expected or when it takes longer than expected.

The study also finds that overall satisfaction with several mortgage application-related activities is markedly higher among customers who used digital communication channels versus those who communicated using mail and fax.

The links between the perception of mortgage processing speed and efficiency and overall customer satisfaction are particularly noteworthy in light of new TRID , a.k.a. “know before you owe” regulation, which went into effect in October 2015, which has the potential to increase the mortgage timeline and poses a significant challenge for lenders when serving home buyers across all generations, but could be particularly challenging when dealing with Millennials (ages 18-34) who are technically savvy, always connected to the Internet and noted as being capricious consumers.

“While a lot of effort has been placed on ensuring compliance with new regulations, it is imperative that lenders improve their education and communication about the impact of these changes or risk losing customers,” said Craig Martin, director of the mortgage practice at J.D. Power. “Effective communication remains one of the most important aspects of a satisfying mortgage experience, especially if the process is taking longer than it has historically. As the number of Millennial home buyers continues to rise, lenders must be ready to meet their expectations. This generation is highly digitally connected, so ongoing communication and transparency via the channels they prefer, particularly mobile, are vital.”

Following are some of the key findings in this year’s study:

  • Communication Impacts Satisfaction: Communication throughout the loan process mitigates dissatisfaction with a longer timeline. When the loan process takes more than two months, satisfaction is 686. However, when an accurate time frame estimate and proactive updates are provided in that same scenario, satisfaction is 859.
  • Millennials Seek Guidance: With Millennials now accounting for the largest share of loan originations over the last two years2, it is notable that nearly 4 in 10 (37%) millennial customers indicate that the origination process was not completely explained to them, and 58 percent indicate their options, terms and fees were not completely explained.
    Effective Loan Representatives are Vital: Those loan reps who engage customers, build trust and ensure that borrowers understand each step of the process can mitigate the negative impact on satisfaction due to missing closing dates (764 missed date/effective representative vs. 511 missed date/ineffective representative).
  • Loans are Closing Sooner: The percentage of applications and approvals that close earlier than promised has increased to 35 percent in 2015 from 31 percent in 2014.
  • Satisfying Experience Leads to Recommendations and Loyalty: Providing an outstanding mortgage origination experience can generate high levels of advocacy and retention. The study finds that 71 percent of highly satisfied customers (overall satisfaction scores of 900 or higher) say they “definitely will” recommend their lender, and 76 percent say they “definitely will” consider reusing the same lender for their next home purchase. In comparison, only 5 percent of dissatisfied customers (scores of 699 or less) say they “definitely will” recommend and 8 percent say they “definitely will” consider reusing the lender.
  • 2015 U.S. Primary Mortgage Origination Satisfaction Rankings
    Quicken Loans ranks highest in primary mortgage origination satisfaction for a sixth consecutive year, with a score of 850, an increase of 15 points from 2014. Quicken Loans performs particularly well in all six factors. Fifth Third Mortgage ranks second with a score of 812, followed by Bank of America and BB&T (Branch Banking & Trust Co.) in a tie at 811 each.

The 2015 U.S. Primary Mortgage Origination Satisfaction Study is based on responses from 4,666 customers who originated a new mortgage or refinanced within the past 12 months. The study was fielded in two waves: February – March and July – August 2015.

For more information about the 2015 U.S. Primary Mortgage Origination Satisfaction Study, visithttp://www.jdpower.com/resource/us-primary-mortgage-origination-satisfaction-study

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Will TRID Delay My Real Estate Closings?

The answer is NO for just about everybody. 

By Jeff Sorg, OnlineEd Blogwill trid delay my closings october 3

PORTLAND, Ore. (September 21, 2015) – Download our free informational poster for display or handout in your real estate office.

Three things can require a 3-day delay in your closings:

.PDF Version, .JPG Version

 

 

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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.

Real Estate Brokers Are You Ready? Time is Running Out to Learn About TRID!

TILA-RESPA Integrated Disclosure (TRID) rules just one month away

By Jeff Sorg, OnlineEd Blog

time is running outPORTLAND, Ore. (September 4, 2015) – With the new TILA-RESPA integrated disclosure rules less than one month away, it’s time for real estate brokers in every state to learn what they need to know about the new rules, how to explain the new lender statements to their clients, and what can go wrong to delay their closings. Real estate and mortgage brokers everywhere will be affected by this change!

To help you get ready for this dramatic industry change, real estate and mortgage education provider OnlineEd is offering a FREE 3-hour (not for CE credit) course designed specifically for real estate brokers.

For Oregon real estate brokers, the course can be used for CE credit when purchased from the Oregon CE catalog, either as a standalone course or part of bundled CE packages.

To help mortgage brokers prepare, OnlineEd has included a 3-hour section on TRID in their NMLS-required 8-hour online continuing education course for 2015 mortgage loan originator license renewal.

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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.

United Wholesale Mortgage Launches Same-Day Loan Closing Product

UClose was built strategically to comply with the upcoming TILA-RESPA Integrated Disclosure Rule (TRID)

By Jeff Sorg, OnlineEd Blog

same day delivery boxPORTLAND, Ore. (August 10, 2015) – United Wholesale Mortgage (UWM) has released its UClose tool to allow mortgage brokers to close their loans within an hour of receiving a clear-to-close authorization. UWM is hopeful that this exclusive online tool will revolutionize the way mortgage brokers and correspondents close their loans by taking control of the closing process, generating closing documents and scheduling the closing directly with the title company.

“UClose will give brokers complete control over the closing process, enabling them to take borrowers from clear-to-close to closing in just six clicks,” said Mat Ishbia, president and CEO of UWM. “It’s very important for realtors and borrowers to get to the closing table as quickly as possible, especially in a purchase market. We’ve created UClose so our brokers can get their clients to the closing table faster and more efficient than any other lender, and will always be the top choice of realtors.”

UWM built UClose to comply with the TILA-RESPA Integrated Disclosure Rule (TRID).

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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 5 of 5: Special Information Booklet

Special Information Booklet

 (Part 5 of 5)

booklet1(Jeff Sorg, OnlineEd) – A creditor must provide the special information booklet, specifically the RESPA Settlement Costs Booklet, to the consumer who applies for a consumer credit transaction secured by real property no later than three business days after receiving the consumer’s loan application. The booklet does not have to be given to a consumer who applies for a refinance, subordinate lien, or reverse mortgage loan.

The Consumer Financial Protection Bureau has issued an updated version of the Special Information Booklet that incorporates the new Loan Estimate and Closing Disclosure. The new guide is titled “Your Home Loan Toolkit: A Step-by-step Guide.” The CFPB has made this guide available as a PDF download, or it can be ordered from the U.S. Government Printing Office (GPO):

The updated Special Information Booklet will be used starting October 3, 2015.

(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 17, 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.

 

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.

It’s Official! CFPB Moves TRID Implementation Date to October 3, 2015

(Jeff Sorg, OnlineEd) – The Consumer Financial Protection Bureau has issued a final rule moving the effective date of the Know Before You Owe mortgage disclosure rule, also called the TILA-RESPA Integrated Disclosures, or TRID, to October 3, 2015.

The final rule issued today also includes technical corrections to two provisions of the Know Before You Owe mortgage disclosure rule.

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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.