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#2073346 - 04/11/16 04:25 PM FRS post-TRID webinar 4/12/16
Truffle Royale Offline

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FYI:

Federal Reserve System's Outlook Live webinar, Know Before You Owe Mortgage Disclosure Rule: Post-Effective Date Questions & Guidance. The session will take place on Tuesday, April 12, 2016 at 11:00 a.m. - 12:00 p.m. Pacific (12:00 p.m. - 1:00 p.m. Mountain, 1:00 p.m. - 2:00 p.m. Central, 2:00 p.m. - 3:00 p.m. Eastern).

You can register here.

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TRID - TILA/RESPA Integrated Disclosures Rule
#2073690 - 04/12/16 07:40 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
PCBDebbie, CRCM Offline
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I have a question related to the call today.

We were under the assumption that the seller CloD is the responsibility of the settlement agent and that the lender is required to obtain and retain a copy.

We were completing the seller side of the CloD until recently. Several of our settlement agents have stated that the lenders they have been dealing with are leaving the seller side blank and having the settlement agent complete the H-25 (I) model form.

On the call today it was mentioned that even though there are 2 separate disclosures being provided, real estate broker fees, HOA charges paid at consummation, home warranties, inspection fees, and other fees that are part of the real estate closing but not required by the creditor still need to be disclosed on the consumer's CloD.

This seems contradictory to me. What do others think?

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#2073692 - 04/12/16 07:44 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
rlcarey Offline
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Galveston, TX
It is what the regulation states. The seller information on page 3 can be left blank on the borrower's CD and a separate seller CD can be provided to the seller. That does not impact any fees that are required to be disclosed on Page 2 on the borrower's CD, which is where real estate broker fees, HOA charges paid at consummation, home warranties, inspection fees, and other fees that are part of the real estate closing are disclosed.
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#2073735 - 04/12/16 09:28 PM Re: FRS post-TRID webinar 4/12/16 rlcarey
Ski Offline
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South Louisiana
I guess it must be because I'm so close to retirement, but it seems like the regulators webinars that attempt to explain things do so from the wrong standpoint.

They tell you at the beginning that nothing in the webinar should be considered "legal interpretations, legal opinion, or legal advice" AND that the webinar and the information contained in it "Is not a substitute for the Integrated Disclosure Rule"; that the rule "speaks for itself". Then the webinar and the information contained in it "Is not binding on the Bureau and does not create any rights, benefits, or defenses, substantive or procedural, that are enforceable by any party in any manner".

Then they make the statement (more than once) that "The rule does not address that issue". (you just told me the rule speaks for itself)

So why give a webinar where all you do is quote the rule (regulation) by section number (ad infinitum) and state what it means (but give no practical examples).

I wonder if any of these people ever made a loan? Or had to attempt to explain to an applicant or borrower what something actually means?

We went to a meeting recently where a regulator was given three different LE's and CD's on the same loan and was asked which one was correct.

The response was "Whichever one looks the most correct".

Truly inspires confidence! I'm glad my last compliance exam was last year. Maybe I'll be around to observe at the next one.

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#2073745 - 04/12/16 10:05 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
Darth HMDA, CRCM, CAMS Offline
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Hi Randy,

Like Debbie, I was also taken aback by the discussion on Seller-Paid real estate commissions on the webinar today.

We leave the seller side completely blank and the settlement agent creates the seller CD.

I've been reading through a number of threads on the subject and came across this post (back from December) #2054809 - in which you stated that commissions are always typically paid by the seller and have absolutely nothing to do with the loan and IMHO should never appear on page 2 and should be reflected on page 3.

That is my opinion as well. The settlement agent discloses the commissions...why would we include them on the lender CD?


Now after the webinar and carefully re-reading the 1026.38(g)(4) it seems that we are required to disclose commissions in section H. How would we even know that when the CD is issued... seems insane.

Do you agree with the today's speakers in that, in all situations the lender must include any brokerages paid in section H?

ARRGGHHHH!!
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#2073746 - 04/12/16 10:06 PM Re: FRS post-TRID webinar 4/12/16 Ski
Darth HMDA, CRCM, CAMS Offline
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Originally Posted By Ski
I guess it must be because I'm so close to retirement, but it seems like the regulators webinars that attempt to explain things do so from the wrong standpoint.

They tell you at the beginning that nothing in the webinar should be considered "legal interpretations, legal opinion, or legal advice" AND that the webinar and the information contained in it "Is not a substitute for the Integrated Disclosure Rule"; that the rule "speaks for itself". Then the webinar and the information contained in it "Is not binding on the Bureau and does not create any rights, benefits, or defenses, substantive or procedural, that are enforceable by any party in any manner".

Then they make the statement (more than once) that "The rule does not address that issue". (you just told me the rule speaks for itself)

So why give a webinar where all you do is quote the rule (regulation) by section number (ad infinitum) and state what it means (but give no practical examples).

I wonder if any of these people ever made a loan? Or had to attempt to explain to an applicant or borrower what something actually means?

We went to a meeting recently where a regulator was given three different LE's and CD's on the same loan and was asked which one was correct.

The response was "Whichever one looks the most correct".

Truly inspires confidence! I'm glad my last compliance exam was last year. Maybe I'll be around to observe at the next one.


TRUER WORDS HAVE NEVER BEEN SPOKEN smile
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The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

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#2073758 - 04/13/16 12:48 PM Re: FRS post-TRID webinar 4/12/16 rlcarey
PCBDebbie, CRCM Offline
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So in essence, the seller side cannot be left blank since these fees are typically part of the transaction. What about the seller paid title fees where applicable and seller paid transfer taxes? They are part of the real estate transaction and would be listed on page 2.

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#2073775 - 04/13/16 01:54 PM Re: FRS post-TRID webinar 4/12/16 Darth HMDA, CRCM, CAMS
rlcarey Offline
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Galveston, TX
Originally Posted By Darth HMDA
Hi Randy,
I've been reading through a number of threads on the subject and came across this post (back from December) #2054809 - in which you stated that commissions are always typically paid by the seller and have absolutely nothing to do with the loan and IMHO should never appear on page 2 and should be reflected on page 3.


Well, we all learn as we go along, so I guess I have changed my mind since then. The regulation is pretty clear on this point.

38(g)(4) Other.

4. Real estate commissions. The amount of real estate commissions pursuant to § 1026.38(g)(4) must be the total amount paid to any real estate brokerage as a commission, regardless of the identity of the party holding any earnest money deposit. Additional charges made by real estate brokerages or agents to the seller or consumer are itemized separately as additional items for services rendered, with a description of the service and an identification of the person ultimately receiving the payment.

It really comes down to the fact that the bank needs a lot more information from the purchaser and seller than you use to need in the past in order to properly complete the forms. Logical or not, the regulations are clear.
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#2073777 - 04/13/16 02:03 PM Re: FRS post-TRID webinar 4/12/16 PCBDebbie, CRCM
rlcarey Offline
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Galveston, TX
Originally Posted By PCBDebbie
So in essence, the seller side cannot be left blank since these fees are typically part of the transaction. What about the seller paid title fees where applicable and seller paid transfer taxes? They are part of the real estate transaction and would be listed on page 2.




38(g) Closing costs details; other costs.
38(g)(1) Taxes and other government fees.

2. Transfer taxes – itemization. The creditor may itemize the transfer taxes paid on as
many lines as necessary pursuant to § 1026.38(g)(1) in order to disclose all of the transfer taxes
paid as part of the transaction. The taxes should be allocated in the applicable columns as
borrower-paid at or before closing, seller-paid at or before closing, or paid by others, as provided
by State or local law, the terms of the legal obligation, or the real estate purchase contract.
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#2073787 - 04/13/16 02:12 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
RR Joker Offline
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We've been including them [commissions and any other seller paid item related to the sale] from day one. About the ONLY thing that is on the Seller CD only would be payoff's and the like. Things strictly related to the seller and their obligations for clearing title, for instance.
Last edited by RR Joker; 04/13/16 02:14 PM.
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#2073815 - 04/13/16 03:15 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
CompliantOkie Offline
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For those of us that have been omitting ALL seller related costs on page 2 of the buyer's CLOD, would you recommend redisclosing those CLODs? Or should we just fix it going forward, train and move on?

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#2073823 - 04/13/16 03:51 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
JWills, CRCM Offline
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I would fix it going forward, and train, train, train. smile
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#2073844 - 04/13/16 04:37 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
rlcarey Offline
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Galveston, TX
For those of you who are not listing all seller paid closing costs on Page 2, how are you getting the seller paid closing costs amount on Page 2 to equal the amount that appears in Section N Line 2 on Page 3 or Line 2 under the amount Due From Seller At Closing on the alternative form?

Even though the settlement agent may prepares the seller's disclosure, you are still responsible for accuracy. The numbers between the borrower's and seller's disclosures need to jive.
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#2073845 - 04/13/16 04:37 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
Darth HMDA, CRCM, CAMS Offline
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Thank you Randy - I know the post was from a while ago. I was reaching for a glimmer of hope that not everyone is disclosing the commissions... sigh. Appreciate your insight as always!

Thank you everyone for responding to the thread.

Just when you thought it was safe to go back in the TRID water... oh well.. correcting and moving along
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#2073870 - 04/13/16 05:23 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
PCBDebbie, CRCM Offline
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Seems like the consumer's CD wouldn't match the seller's CD regardless since seller payoffs are not a page 2 requirement.

Could we simply have the settlement agent prepare the H-25 (I) and provide a copy to the consumer as well?


Every time I think I have a good grasp on this rule we learn something new......

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#2073891 - 04/13/16 05:52 PM Re: FRS post-TRID webinar 4/12/16 PCBDebbie, CRCM
rlcarey Offline
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Galveston, TX
Originally Posted By PCBDebbie
Seems like the consumer's CD wouldn't match the seller's CD regardless since seller payoffs are not a page 2 requirement.

Could we simply have the settlement agent prepare the H-25 (I) and provide a copy to the consumer as well?


Every time I think I have a good grasp on this rule we learn something new......


I'm not sure what you mean by your first statement. Payoffs would go in Section N on Lines 4 and above. They do not go on Line 2. It is none of the borrower's business to know how much they owed on the property they were selling or what other debts they may be paying off. That is why there is a separate seller's disclosure option.

No - why would you give the seller's disclosure to the borrower. You should have already provided the borrower with all their required information.
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#2073898 - 04/13/16 06:15 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
RR Joker Offline
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I think the forest is being missed for the trees here.

Seller specific transactions go on M (sales price) - N [various related payoffs] , page 3 and are separately disclosed to just them.

Commissions are disclosed on page 2 in the paid-by column of whomever pays it and are part of the actual RE transaction common to all parties. Any other closing costs (think Warranty deed, for example) are also on page 2 and the totals flow to Line 2, as Randy points out, of the Seller Only CD.
Last edited by RR Joker; 04/13/16 06:16 PM. Reason: [ ] to add examples
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#2073902 - 04/13/16 06:19 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
rlcarey Offline
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I have found that a lot of my clients have been paying no attention to what the settlement agents have been handing them. They just put it in the file. When I compare the borrower's and seller's disclosures in some cases, I sometimes think they are not even the same transaction. I think this has really slipped under the radar in a number of banks.
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#2073906 - 04/13/16 06:29 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
RR Joker Offline
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I think, based on what I'm seeing here, I'm going to add a 'pre-closing' requirement to obtain my shadow file copy from the closing attorney because I can 'rest-assured' my loan ops folks are NOT looking at them.
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#2074026 - 04/14/16 02:26 PM Re: FRS post-TRID webinar 4/12/16 Ski
Indy Banker Offline
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Make sure to complete the FRB's online survey and share your thoughts. I added comments to my survey that instead of scripted readings of the regulations in their answering of questions, it would be much more helpful if they discussed the issues in plain English and used examples, illustrations and added comments to help guide us through some of the ambiguities contained in the regulations and commentary. Maybe if enough bankers speak up they will improve their presentation format to be more helpful.

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#2074053 - 04/14/16 03:42 PM Re: FRS post-TRID webinar 4/12/16 Indy Banker
Darth HMDA, CRCM, CAMS Offline
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Originally Posted By Indy Banker
Make sure to complete the FRB's online survey and share your thoughts. I added comments to my survey that instead of scripted readings of the regulations in their answering of questions, it would be much more helpful if they discussed the issues in plain English and used examples, illustrations and added comments to help guide us through some of the ambiguities contained in the regulations and commentary. Maybe if enough bankers speak up they will improve their presentation format to be more helpful.


I wouldn't hold my breath... they are very careful to not say anything that provides clarity.

Heck, even if they did they would still lead with the "Nothing we say should be taken as advice" disclaimer.

We might as well buy Regulations on tape ... maybe morgan freeman could narrate them.
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The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

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#2074058 - 04/14/16 04:02 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
CompliantOkie Offline
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And then I could just sleep with headphones and the regs looping on my phone.
smile

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#2074065 - 04/14/16 04:18 PM Re: FRS post-TRID webinar 4/12/16 CompliantOkie
Carolina Blue Offline
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Lost in a regulatory fog
Actually, I have to say I thought they did a pretty good job yesterday in giving actual examples to support the cites they gave. They'll never hand over their playbook, but I think they're taking a step in the right direction.

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#2074067 - 04/14/16 04:22 PM Re: FRS post-TRID webinar 4/12/16 Truffle Royale
rlcarey Offline
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For those of you that are complaining, I think that the CFPB has answered a lot of questions through these on-going presentations.

Of course the webinars presented by HUD after the 2010 revisions to the GFE and HUD-1 were really so much better sick
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#2074230 - 04/15/16 12:51 PM Re: FRS post-TRID webinar 4/12/16 rlcarey
Sinatra Fan Offline
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What I really wish the CFPB would understand and acknowledge is that the overwhelming majority of financial institutions and their employees really want to comply with regulations. We really do! We're not scouring the regulations for loopholes; we're seeking guidance and clarity.

Every day those of us in line positions have multiple constituencies to satisfy: customers, compliance staff, enterprise risk, internal and external auditors, examiners. We really want to do right by all of them, particularly the customers. I really hope the CFPB would not look at us as the evil empire, but as ordinary working people whose best interest lies in serving the customer as best we can, and who (for the most part) strive to do that every working day.
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