TRID Flashcards
What does TRID stand for?
TILA-RESPA Integrated Disclosure Rule
“Know Before you Owe”
Purpose of TRID
-designed to help consumers with helpful information towards understanding features, cost and risks of the mortgage loan they are applying for
-consolidate four existing disclosures required under TILA and RESPA into two forms
LE (Loan Estimate) and CD (Closing Disclosure)
Loans covered under TRID
The TILA-RESPA rule applies to most closed-end loans secured by real property.
There are some loans that are not covered under the new rule, which means consumers obtaining these loan products will not receive the new Integrated Disclosures. Those products include:
-Reverse mortgages
- Home Equity Lines of Credit (HELOCs)
- Chattel-dwelling loans, such as loans secured by a mobile home or by a dwelling that is not attached to real property (land)
- Loans made by a person or entity that makes five or fewer mortgages in a calendar year and isn’t a creditor
“Loan Consummation”
Loan consummation means the time that a consumer becomes contractually obligated on a credit transaction.
Special Information Booklet
Disclosure must be provided within 3 business days of submitted application.
Disclosure timeframe LE
within three business days of the application. (day zero with day one being the first business day after the application is taken)
Disclosure timeframe CD
at least three business days before consummation of the loan.
Closing Disclosure (CD)
Contains the actual, finalized, terms and costs of the transaction
replacement of the HUD-1 and final Truth-in-Lending
Loan Estimate (LE)
represents to the borrower the estimated costs relative to closing the loan transaction.
formally the GFE and initial TIL
“change of circumstances”
when the terms or costs of the loan change due to information provided by the borrower in good faith is incomplete or inaccurate.
The consumer may receive a revised version of the LE no later than FOUR DAYS prior to consummation
actions MLO must take when there is incomplete information on TRID disclosure
ECOA you can send out notice of incompletion - ask borrower for info within time frame.
Once info is received, update immediately.
Information that must be disclosed to consumers upon request
If the consumer requests a change that relates to the loan terms or settlement, the creditor must send a revised LE.
TRID a borrowers right to rescission
The right of rescission, created by the Federal Truth in Lending Act, gives homeowners the absolute right to cancel a home equity loan, or line of credit, until midnight of the third day after closing, excluding federal holidays and Sundays.
Annual Escrow Statement
A servicer shall submit to the borrower an annual statement for each escrow account within 30 days of the completion of the computation year.
The annual escrow account statements must contain:
• The account history
• Projections for the next year
• Current mortgage payment and portion going to escrow
• Amount of past year’s monthly mortgage payment and portion that went
into the escrow account
• Total amount paid into the escrow account during the past year
• Amount paid from the account for taxes, insurance premiums, and other
charges
• Balance at the end of the period
• Explanation of how the surplus, shortage, or deficiency is being handled
