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#2159068 - 01/03/18 08:38 PM Initial CD sent before Locked
workerbee Offline
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Joined: Oct 2015
Posts: 61
Can a CD be sent when the loan is locked instead of a revised LE? A CD was sent in error by closing instead of a LE.

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TRID - TILA/RESPA Integrated Disclosures Rule
#2159071 - 01/03/18 08:42 PM Re: Initial CD sent before Locked workerbee
rlcarey Online
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rlcarey
Joined: Jul 2001
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Galveston, TX
Yes - unless you have an investor involved - they don't normally accept that.
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#2160938 - 01/18/18 08:30 PM Re: Initial CD sent before Locked workerbee
Christine M Offline
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Joined: Aug 2017
Posts: 11
This is my first post, so please bear with me. I am very grateful to be able to access everyone's wisdom.

Regarding "Yes - unless you have an investor involved - they don't normally accept that"

You mean if we are selling to counter-parties? We are a correspondent lender, funding on our lines and selling to counter-parties.
We are trying to issue our CloD earlier in the transaction. We were thinking that the file should be locked prior to issuing the CloD. Can anyone either 1) give me the regulation or 2) share the procedure they are currently using regarding issuance of Initial CD.
I was also wondering how in-depth the initial CloD needs be, regarding seller fees.

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#2160951 - 01/18/18 09:04 PM Re: Initial CD sent before Locked workerbee
John Burnett Offline
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John Burnett
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Cape Cod
On your last question -- seller fees -- the closing disclosure is to include all fees paid in connection with the larger transaction -- the purchase of the real estate -- whether paid by the borrower, the lender, the seller or anyone else. Under TRID rules, disclosures cover more than simply the loan transaction when a seller is also involved. The initial CloD should have all the information you can reasonably gather by the time it's issued. The final CloD -- if there is another one -- should be complete.

And congratulations on your first post. We look forward to "seeing" you here again.
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#2161021 - 01/19/18 03:26 PM Re: Initial CD sent before Locked workerbee
Truffle Royale Offline

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Why are you trying to issue CDs earlier? You're risking your ability to go in and capture any fee changes by issuing a CD prior to locking a rate or getting within days of the actual closing.

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#2161033 - 01/19/18 04:16 PM Re: Initial CD sent before Locked Truffle Royale
Christine M Offline
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Joined: Aug 2017
Posts: 11
We are looking to issue the CloD after the rate is locked, appraisal is in and fully underwritten and QC'd to burn the 3 day wait. It seems that is the way the companies in our market are handling it. Currently we are issuing it after final signoffs with all demands in(including sellers) and it is creating stress on our loan officers and closing department. The loan officers are being told by their counter parties that we don't understand TRID. I disagree but we are investigating moving it forward to accommodate. It seems that HOA demands (being paid by seller) and home warranties are our delaying factor.

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#2161051 - 01/19/18 05:18 PM Re: Initial CD sent before Locked workerbee
Truffle Royale Offline

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Are you waiting for HOA demands and home warranties to be paid prior to closing or just putting them on the CD on the seller's side to be paid at closing? If you're marking all conditions as needing to be cleared prior to closing, that's the issue you need to address rather than try to issue the CD early.

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#2161125 - 01/19/18 07:55 PM Re: Initial CD sent before Locked workerbee
Christine M Offline
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Posts: 11
Not to be paid but to be obtained.

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#2161147 - 01/19/18 08:47 PM Re: Initial CD sent before Locked workerbee
PJeanG7 Offline
Member
Joined: Apr 2011
Posts: 51
We communicate the Rate Lock on the LE before the CD goes out. In certain States the LE Rate Lock replaces the Rate Lock Agreement.

In addition this establishes the timetable that the rate is good thru.

Real Estate Lending is what it is. Extensions are required as we have very little control over many factors. But if there is a slight delay and an extension is needed and we close within 7 days of the initial CD issuance, then we have company coverage for that increase and the change beyond our control.

The growing industry trend is to produce the CD's as early as possible. This opens the company up to the cost of the Black Hole, if that extensions are needed and the transaction closes later than 7 days. I know the compliance crew will chime in passionately, but until the companies experience large losses in this area, then this trend will continue to apply pressure on those that do not have this in practice. Highly Competitive Industry is about all that can be said.

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