CFPB Issues Amendments to Clarify Trid Rules
On July 28, the Consumer Financial Protection Bureau (CFPB) proposed various amendments to the federal mortgage disclosure requirements, commonly known as TRID. The stated purpose of the amendments is to memorialize informal guidance issued by the CFPB through webinars, compliance guides, or otherwise, and to clarify certain technical requirements.
Among other changes, the amendments:
Create a tolerance for the total of payments calculation. While the Truth in Lending Act currently contains tolerances for finance charge calculations and disclosures affected by the finance charge, the proposed amendments establish express tolerances for the total of payments disclosure in order to parallel the existing provisions regarding the finance charge.
Provide a uniform application of TRID to cooperative units. Whether cooperative units are classified as real property varies from state to state. The proposed amendments would require the provision of the TRID disclosures regardless of whether the units are classified as real property under state law.
Clarify how institutions may share TRID disclosures to various parties in the closing process. The industry has expressed concern over whether various parties to the closing process – such as sellers and real estate agents – may share information that otherwise may be private. The proposed rule clarifies that creditors may make modifications to the Closing Disclosure to accommodate the provision of separate Closing Disclosures to the borrower and the seller.
The proposed amendments also clarified that a creditor may use the Closing Disclosure to reset tolerances in certain situations. Typically, creditors may only use the Closing Disclosure to reset tolerances when it would not have enough time after learning of the change affecting the tolerance to issue a new Loan Estimate and satisfy the pre-consummation waiting period requirements. The proposed amendments add an additional exception to allow a new Closing Disclosure after a Closing Disclosure has been issued when required under the good faith requirements.
Finally, the proposed amendments address over a dozen other changes including affiliate charges, the calculating cash to close table, construction loans, decimal places and rounding, escrow account disclosures, escrow cancellation notices, the treatment of gift funds, the written list of service providers, the summaries of transactions table, the total interest percentage calculation, and disclosure and good-faith determination of property taxes and property value.