Creditors must continue to use the Good Faith Estimate, Truth-In-Lending Disclosure and the HUD-1 form for reverse mortgages, HELOCs, mobile home or other non-attached dwelling loans and others NOT covered by TRID.
Housing assistance loans for low- and moderate-income consumers are partially exempt from TRID disclosures, and have specific rules.
Creditors are not required to provide Loan Estimate and Closing Disclosure forms and related booklets and statements for these loans.
Know B4 You Owe. Can you speak the new TRID lingo?
TRID rules apply to MOST consumer credit transactions secured by real property. These include mortgages, refinancing, construction-only loans closed-end home-equity loans, and loans secured by vacant land or by 25 or more acres.
The rule does NOT apply to Home Equity Line of Credit transactions reverse mortgages mortgages secured by a mobile home or other dwelling that is not attached to real property.
Also, TRID rules do NOT apply to loans made by a person or business that makes 5 or fewer mortgages in a calendar year.
Federal “disclosure” forms define the information that creditor businesses MUST provide to consumers applying for real estate loans.
As of Oct 1, 2015 lenders must provide TWO New “TRID” disclosure forms. for the most common kinds of real estate loans First, the Loan Estimate, which covers the key features, costs and risks of a mortgage loan.
For an approved loan this must be returned to the consumer within 3 business days of loan application. If the loan goes forward, the Closing Disclosure form, covering key transaction costs, must be delivered at least 3 business days before loan consummation.
Florida Agency Network is giving you one more reason to attend the 2015 Florida Realtors® Convention and Trade Expo! There are 36 reasons to attend.
Get SOCIAL with FAN at booth 625. Enter to win an Apple Watch
The number one reason is to get up to date on everything TRID before the new disclosures go into effect October 3. Stop by booth 625 - Get social with all of the agencies in the FAN network and enter to win an Apple Watch!
Source: Timeline > Consumer Financial Protection Bureau
Here’s a full timeline of how we created the Loan Estimate and Closing Disclosure forms, part of our Know Before You Owe: Mortgages project. It’s a look back at our effort to make mortgage disclosures simpler and more effective, with the input of the people who will actually use them.
You can also return to the main page to view an interactive timeline.
The new law required the CFPB to combine the Truth in Lending and Real Estate Settlement Procedures Act disclosures.
The event brought together consumer advocates, industry, marketers, and more to discuss CFPB implementation of the combined disclosures.
Starting with the legal requirements and the consumer in mind, we began sketching prototype forms for testing.
During this process, the team discussed preliminary issues and ideas about mortgage disclosures. This session set the context for the disclosures and was a starting point for their development. The team continued to develop these issues and ideas over more than a year during the development process.
We posted the first two prototype loan estimates. We asked consumers and industry to examine them and tell us what worked and what didn’t. We repeated this process for several future rounds. Over the course of the next ten months, people submitted more than 27,000 comments.
We sat down with consumers, lenders, and brokers to examine the first set of loan estimate prototypes to test two different graphic design approaches.
Consumers and industry participants worked with prototypes with lump sum closing costs and prototypes with itemized closing costs.
Again, we asked testing participants to work with prototypes with lump sum closing costs and itemized closing costs.
Another round of closing cost tests, as we presented participants with one disclosure that had the two-column design from previous rounds and another that used new graphic presentations of the costs.
In this round, we presented closing costs in the itemized format and worked on a table that shows how payments change over time.
We began testing closing disclosures. Both designs included HUD-1-style numbering for closing details, but two different ways of presenting other costs and Truth in Lending information.
One form continued to use the HUD-1 style numbered closing cost details; the other was formatted more like the Loan Estimate, carrying over the Cash to Close table and no line numbers.
In this round, we settled on prototypes formatted like the Loan Estimate, but one included line numbers and the other didn’t. We also began testing the Loan Estimate with the Closing Disclosure.
Prototype A
Prototype B
Prototype C
Participants reviewed one Loan Estimate and one Closing Disclosure (with line numbers) to see how well they worked together.
A panel of representatives from the CFPB, the Small Business Administration (SBA), and the Office of Management and Budget (OMB) considered the potential impact of the proposals under consideration on small businesses that will provide the mortgage disclosures.
The panel met with small businesses and asked for their feedback on the impacts of various proposals the CFPB is considering. This feedback is summarized in the panel’s report.
(Note: Link to large PDF file.)
We conducted one final round of testing to confirm that some modifications from the last round work for consumers.
Prototype A
Prototype B
Prototype C
The CFPB released a Notice of Proposed Rulemaking. The notice proposed a new rule to implement the combined mortgage disclosures and requested your comments on the proposal.
Between the public comment period and other information for the record, the CFPB reviewed nearly 3,000 comments. These comments helped us improve the disclosures and the final rule.
We conducted qualitative consumer testing on Spanish language versions of the proposed disclosures. We tested in three cities: Arlington, Va. (October 11-12); Phoenix, Az. (November 14-15); and Miami, Fla. (December 12-13).
With the help of Kleimann Communication Group, the contractor who helped us throughout the testing process, we conducted a quantitative study of the new forms with 858 consumers in 20 locations across the country. By nearly every measure, the study showed that the new forms offer a statistically significant improvement over the existing forms.
In response to comments, we developed and tested different versions of the disclosures for refinance loans, which we tested for three rounds. (In our last round, we tested a modification for both purchases and refinances.) We also did one more round of Spanish language testing for the refinance versions. The modified disclosures tested well and are the ones included in the final rule.
The CFPB issues a Final Rule. The final rule creates new integrated mortgage disclosures and details the requirements for using them. The rule is effective for mortgage applications received starting August 1, 2015.
The CFPB issues a final rule moving the effective date to October 3, 2015.
Bon Voyage HUD-1!!!
Come get social with us at booth 625 as we bid the HUD-1 farewell and cruise to the new disclosures.
https://www.youtube.com/watch?v=upg0H35VjSk#action=share
After October 3, 2015 you will no longer be receiving a HUD-1 settlement statement before consummation of a closed-end credit transaction secured by real property.
Say what?!?!
That's right, I just said consummation of a closed-end credit transaction and no more HUD. There is new jargon to go along with the new, easy-to-read, consumer friendly, disclosures.
Bon Voyage HUD!
Take a peek at the new disclosures!
www.closing-disclosure.com
2015 Florida Realtors® Convention & Trade Expo
Each year, the Florida Realtors® Convention & Trade Expo gathers thousands of Realtors looking to up their game. This years theme is Celebration 15; the event falls on August 19-23 and is held at the Rosen Shingle Creek in Orlando, Florida. The free two-day Expo is on Thursday and Friday--all you have to do is register. There are over 30 education sessions sorted into six learning tracks--technology, broker, productivity, trends, personal growth, and continuing education. Along with the Convention, the Trade Expo has over 200 exhibitors that come packed with promotional materials and exquisite raffle prizes. This years keynote speaker is Notre Dame's former Head Coach Lou Holtz.
On October 3, 2015 the TILA-RESPA Integrated Disclosure (TRID) rule will go into effect. The Florida Agency Network (FAN) is leading the industry through uncharted waters to the new disclosures. Title agencies in the FAN network are prepped and ready to keep you afloat before, during, and after these industry changes. Join us at booth 625 as we say Bon Voyage to the HUD-1 and celebrate the implementation of the new Closing Disclosure (CD). Get social with us and enter to win an Apple iWatch!
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