2020 Rescission Calendar
Our 2020 Rescission Calendar is now available; click here to see it.
CFPB TRID Construction Guide
On December 18, 2019, the Bureau published additional guidance related to disclosing construction and construction-permanent loans under the TILA-RESPA Integrated Disclosure (TRID) Rule.
The Bureau published two Guides: one on disclosing construction and construction-permanent loans with a separate Loan Estimate and Closing Disclosure for each phase of the transaction, and one on disclosing one combined Loan Estimate and one combined Closing Disclosure to include both phases of a construction-permanent transaction. The Guides provide instruction and illustrative examples for commonly asked questions about TRID provisions related to completing these construction and construction-permanent loan disclosures.
You can access the TRID: Combined Construction Loan Guide and the TRID: Separate Construction Loan Guide here: https://www.consumerfinance.gov/policy-compliance/guidance/tila-respa-disclosure-rule/
PPDocs Platform Improvement
New fields have been added to our order form to include current servicer information. This will allow lenders to include the RESPA-required current servicer’s toll-free or collect telephone number and current servicer’s address on the Notice of Servicing Transfer Disclosure included in the closing document package. (See 12 CFR §1024.33)
Freddie Mac and Fannie Mae publish implementation timeline for URLA
Fannie Mae and Freddie Mac published the revised implementation timeline for the redesigned Uniform Residential Loan Application (URLA/Form 1003) and updated automated underwriting systems (AUS). Here are the dates you need to know:
- March 9, 2020: Start of Tests between Vendors and GSEs
- June 1, 2020: Start of Limited Production pilot for select Lenders/Vendors [must demonstrate partner readiness and be pre-approved by Fannie Mae and/or Freddie Mac)
- September 1, 2020: Start of Open Use Period [formerly referred to as Optional Use period]
- November 1, 2020: Start of Required Use
Click here to see the jointly issued Uniform Mortgage Data Program announcement from Fannie Mae and Freddie Mac: https://sf.freddiemac.com/content/_assets/resources/pdf/other/urla-december-2019-announcement_fre.pdf
Click here to view Fannie Mae’s URLA webpage: https://www.fanniemae.com/singlefamily/uniform-residential-loan-application
Taxpayer First Act
We addressed the Taxpayer First Act in our last newsletter of 2019, but we are still getting a few questions. In response to the Act, we created a taxpayer consent form (Doc ID 3967) styled after MISMO’s sample form for your borrowers’ signatures. It is set to filter in all initial disclosure packages. For clients who wish to include the consent form in their closing packages, we will accommodate upon request.
The Act requires third parties ordering transcripts to notify the borrower of the express purpose for which the tax return information will be used, and it requires that borrower’s provide express permission for the sharing of the return information with other parties.
If you need additional information on the Act, MISMO has prepared a helpful FAQ page.
PPDocs System Update: Your Home Loan Toolkit
When the transaction is not for the purchase of a one-to-four family residential property then Regulation Z does not require delivery of the “Your Home Loan Toolkit” (Doc 6991) to the consumer. We recently updated our system so that the document does not automatically filter for lot loans. If your investor overlays require it on lot loans, please let us know.
PPDocs 2020 Holiday Schedule
Our offices will be closed on the following dates:
- Memorial Day – Monday, May 25, 2020
- Independence Day – Friday, July 3, 2020
- Labor Day – Monday, September 7, 2020
- Thanksgiving – Thursday, November 26, 2020
- Christmas Day – Friday, December 25, 2020*
- New Year’s Day – Friday, January 1, 2021*
*Early close on Christmas Eve and New Year’s Eve possible.
Please mark your calendars accordingly. If you know you’ll need something on one of these days, we just ask that you give us as much lead time as possible.
Frequently Asked Question
Question: Under what circumstances should we deliver revised Loan Estimates and revised Closing Disclosures to consumers?
Answer: Under what circumstances should we deliver revised Loan Estimates and revised Closing Disclosures to consumers?
For changes that happen after you issue the initial LE, the following rules apply:
- When the changes do not increase the fees that are subject to either the 0% or 10% tolerance tests, a revised LE is not necessary and any adjustments can be reflected on the initial CD.
- When fees increase and the changed fees are subject to TRID tolerance tests, a revised LE must be provided to the applicants within three business days of learning of the changed circumstance in order to adjust the tolerance comparison. You should document the changed circumstance in your files. For fees subject to the 10% aggregate tolerance test, the aggregate fees must increase more than the 10% to trigger a re-issue of the LE and the resetting of the tolerances.
- When the changes are not related to fees subject to the tolerance tests, a revised informational LE may always be provided to the applicants at any time.
- Whenever an LE is re-issued (due to a changed circumstance or informational), it must reflect the most current good faith estimate of all closing costs known to the creditor.
- There is no requirement to compare the APR disclosed on an LE to the APR reflected on any other LE issued to the applicants.
- A revised LE must always be issued within three business days of the lender and consumer entering into a formal written rate lock agreement.
- When a changed circumstance occurs within four business days of closing, you may document the change of circumstance, reflect the changes reflected on the initial CD, and reset your tolerances accordingly. Any revised LE must be received by the consumer not later than four business days before closing. A revised LE may not be issued on or after the date that the initial CD is issued.
For changes that happen after you issue the initial CD, the following rules apply:
- As long as the changes are not increasing the fees that are subject to the 0% tolerance test, or if the increased fees are subject to the 10% tolerance test and they are not changing by more than 10%, any adjustments may be reflected on the final CD, as it is not considered a changed circumstance.
- When changed fees are subject to the tolerance tests, provide a revised CD to the applicants within three business days of learning of the changed circumstance or on the final CD, whichever comes first, in order to adjust the tolerance comparison. Document the changed circumstance in your files as you would for one during the LE disclosure phase.
- When the changes are not related to fees subject to the tolerance tests or the changes do not rise to the level of a changed circumstance, you may always provide a revised informational CD to the applicants prior to closing.
- Always make a copy of the CD available for review upon request by the applicant one day prior to closing.
- For Texas Home equity loans, Texas law requires delivery of a final CD to the applicants one day prior to closing.
A new three business day wait period during the CD disclosure phase is only required under the following circumstances:
- When the disclosed annual percentage rate-- as defined in § 1026.22—becomes inaccurate. An over-disclosure of the APR with a corresponding over-disclosure of the finance charge is not considered inaccurate under 1026.22.
- When the loan product changes causing the loan product information previously disclosed to become incorrect.
- When a prepayment penalty is added causing the statement regarding a prepayment penalty to become incorrect.
If an investor is involved, you will need to check with them for any additional requirements they may impose.