CFPB Archives

The TILA-RESPA Integrated Disclosure (TRID) Rule will take effect on October 3, 2015. TRID will significantly change the way real estate transactions are processed and settled. To avoid delays and to ensure that each settlement goes as smoothly as possible, it is important for real estate agents to be informed of all of the changes TRID will introduce to the closing process.

New Documents
When TRID goes into effect, there will be two new disclosure forms: the Loan Estimate (LE) and the Closing Disclosure (CD). The LE will combine and replace the Good Faith Estimate and the Truth in Lending disclosure. The CD will combine and replace the HUD-1 and the final Truth in Lending disclosure.

The LE is a form that explains the loan’s features, terms, and risks. This form is due to the borrower within three days of their submitting a loan application. The CD provides the borrower with final details about the loan, including projected monthly payments, fees, and other costs. This is due to the borrower at least three days before closing.

New Timeline
The new disclosures will also instate new timelines for real estate transactions. The lender now has two new deadlines. They are required to provide the borrower with the LE at least three business days after loan application, and to provide the borrower with the CD at least three business days before loan consummation. Click here to view a timeline chart.

The latter deadline can, in some instances, delay closing. If the lender does not provide the borrower with the CD three days before closing, a scheduled closing may be delayed. Additionally, there are some cases in which a re-disclosure, or another three-day review period, will be necessary. If the lender provides the borrower with the CD, and the loan terms in the CD are significantly different from those detailed in the LE, a re-disclosure will be required. Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB) has specified the following three situations under which re-disclosure would be necessary:

Preparing Clients for these Changes
In order to avoid closing delays or confusion when TRID goes into effect, it is important to spend some time reviewing the new forms, so that you can answer any questions your client may have. Keep the new timelines in mind when drawing up contracts, coordinate closings carefully, and avoid any last-minute changes or negotiations. Encourage your clients to review the documents they receive carefully, and to communicate with the lender and ask questions. Finally, avoid making promises that cannot be kept. Initially when the new disclosure forms are implemented, loans and purchases may take longer to close. Make sure your clients are prepared for this possibility.

Knowing how Know Before You Owe, or TRID will change the mortgage industry will help you better serve your clients, and prevent delays in closing or other issues. The CFPB and the Mortgage Bankers Association have published resources for real estate professionals to educate themselves and their clients on TRID. These resources can provide further information and answer some of your questions about how these changes will affect you and your clients.

For more information about TRID, and how NFM Lending is preparing for TRID, click here.

The Consumer Financial Protection Bureau (CFPB) has released new online tools on their “Owning a Home” landing page. These tools are aimed at helping consumers better understand the mortgage process, in preparation for the TILA-RESPA Integrated Closing Disclosures (TRID), or the Know Before You Owe Rule, which goes into effect October 3, 2015.

Within each phase, consumers can use various online forms and worksheets to learn more about the loan process and their options. Consumers can, for example, explore potential interest rates, based on their credit score, location, home price, loan type, and more. There are also tools that walk consumers step-by-step through the new disclosure forms: the Loan Estimate and the Closing Disclosure.

NFM Lending is continuing to prepare its employees, industry partners and consumers for TRID. For more information on TRID, and to find out what NFM Lending is doing to prepare, click here.

The new Loan Estimate and Closing Disclosure documents will replace the Good Faith Estimate, the HUD-1, and the Truth in Lending Statement on most residential loan transactions. This change is anticipated to have wide-reaching effects on the mortgage and real estate industries.

The TRID changes were originally scheduled to take place August 1, 2015; however, after pressure from Congress and industry groups to delay this deadline, or to provide a grace period, the CFPB issued a proposal to move this date to October 3, 2015. The proposal was open for public comment on the CFPB website until July 7, 2015. In their press release announcing the delay, the CFPB stated that it believes scheduling the effective date on a weekend will “facilitate implementation by giving industry time over the weekend to launch new systems configurations and to test systems.”

NFM Lending is continuing to prepare its employees and clients for TRID. For more information about this new rule, and what NFM Lending is doing to prepare, click here.

LINTHICUM, MD, June 25, 2015 — On June 24, 2015, the Consumer Financial Protection Bureau (CFPB) issued a proposed rule change and request for public comment regarding TRID. In the announcement, the CFPB proposes to move the rule’s effective date to Saturday, October 3, 2015.

“The Bureau believes that moving the effective date may benefit both industry and consumers with a smoother transition to the new rules,” said the CFPB on their website. “The Bureau further believes that scheduling the effective date on a Saturday may facilitate implementation by giving industry time over the weekend to launch new systems configurations and to test systems. A Saturday launch is also consistent with existing industry plans tied to the original effective date of Saturday, August 1.”

NFM Lending will continue to prepare its employees and clients for TRID. For more information about what NFM Lending is doing to prepare for these important changes, visit www.nfmlending.com/ready-for-TRID.

NFM Lending is a mortgage lending company currently licensed in 29 states across the United States. The company was founded in Baltimore, Maryland in 1998. They attribute their success in the mortgage industry to their steadfast commitment to their customers and their community. NFM Lending has firmly planted itself in the home loan marketplace as “America’s Common Sense Residential Mortgage Lender.”

LINTHICUM, MD, June 18, 2015 — The Consumer Financial Protection Bureau (CFPB) announced Wednesday, June 17, 2015, that implementation of the new TILA-RESPA Integrated Disclosures (TRID), which will replace the Good Faith Estimate, the HUD-1, and the Truth in Lending Statement, may be delayed from August 1 until October 1, 2015.

Richard Cordray, Director of the CFPB, said that the delayed deadline was implemented to correct an administrative error. Cordray’s full statement, published on the CFPB website, is below:

“The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until October 1, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”

The Consumer Financial Protection Bureau (CFPB) issued a statement on Wednesday, June 3, 2015, stating that its enforcement of the TILA-RESPA INTEGRATED DISCLOSURES (“TRID”) will be sensitive to mortgage lenders making a good faith effort to enforce the new rule. Richard Cordray, Director of the CFPB, addressed the statement to Senators Joe Donnelly and Tim Scott, and recognized that the implementation of TRID will post challenges to industry professionals. Cordray also outlined the CFPB’s plan for implementing the new rule.

Cordray was also adamant that TRID would not delay most closings, and clarified the three circumstances under which an additional 3-day review period, or re-disclosure, will be required:

Cordray closed his statement by saying that the CFPB’s support of the implementation of TRID will not end on August 1, and that regulators will be sensitive to lenders making good-faith efforts to enforce the new rule. To read the full statement, click here.

While this is a step in the right direction, both Congress and the mortgage industry quickly responded that still more was needed.

“Nearly 300 Senators and House Members have written to Director Cordray asking for a formalized hold harmless,” said U.S. Reps. Blaine Luetkemeyer (R-MO) and Randy Neugebauer (R-TX) in a joint statement. “Anything short of that is unacceptable.”

On August 1, 2015, the mortgage industry will introduce two new loan disclosures. The Loan Estimate and the Closing Disclosure will be utilized on most applications taken after the effective date. These changes will be implemented by the Consumer Financial Protection Bureau (CFPB) under the CFPB’s rule making authority pursuant to the Dodd Frank Wall Street Reform and Consumer Protection Act.

What do the changes mean?

The Good Faith Estimate (GFE) and the Truth in Lending (TIL) disclosures will now be combined into the Loan Estimate for most transactions. Certain loans such as HELOC’s and reverse mortgage will still utilize the current disclosures. In addition the Closing Disclosure will replace the HUD-1, GFE, and TIL disclosures provided at settlement and must be delivered to the consumer three (3) business days prior to consummation.

The 1,888 pages of regulation that mandates the new disclosures and delivery requirements will not only impact lenders, but also other industry professionals. Because the rule expressly holds lenders liable for the accuracy and delivery of the Closing Disclosure, settlement agents companies and realtors must work closely to deliver all of the information necessary to ensure settlement is not delayed as a result of the three (3) business day delivery requirement.

NFM Lending is preparing for these changes and is constantly training our loan originators, realtors, settlement agents, and other industry partners to be up to date on this important industry change.

If you have any questions about NFM’s loan programs, please click here to contact one of our licensed loan originators.

Earlier in 2014, the Consumer Financial Protection Bureau (CFPB) issued a report on its plan, purpose, and proposed action on how to address issues within the subject of Fair Lending.

But one might first ask the question: “What is Fair Lending?” Fair Lending falls under the Fair Housing Act and the Equal Credit Opportunity Act. Under both Acts, it is unlawful for a lender to discriminate on a prohibited basis in a residential real estate-related transaction.

The CFPB’s report addresses how they would deal with certain issues regarding Fair Lending. The Director of the CFPB, Richard Cordray, makes this statement in the beginning of the report:

“At the Consumer Bureau, we are fierce advocates for a consumer financial marketplace that allows all Americans to pursue a path to greater opportunity. To that end, we are working to remove the unnecessary obstacles too many Americans face in the consumer financial marketplace.”

NFM Lending strongly supports the CFPB’s efforts and takes this matter very seriously. If you would like to learn more about Fair Lending or to read the CFPB report in its entirety, it can be located here.

If you are looking to purchase or refinance a home, click here to contact one of our Licensed Mortgage Loan Originators to learn what mortgage loan is right for you. NFM Lending is an Equal Housing Lender.

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