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#2186184 - 07/19/18 09:43 PM No Prepaid Interest
B2B Offline
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Am I reading this right?

If there is no prepaid interest for a loan, the LE would not disclose any prepaid interest by leaving the line completely blank?
However on the CD you would disclose $0.00 in borrower paid column but also leave the label portion blank?

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TRID - TILA/RESPA Integrated Disclosures Rule
#2186345 - 07/20/18 08:42 PM Re: No Prepaid Interest B2B
John Burnett Offline
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You don't put anything on the prepaid interest line, not even $0.00 (LE), but you leave the label intact. (comment 37(g)(2)-4)

On the CloD, , same as LE except you do indicate $0.00 in the borrower paid column. Leave the labels there.
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#2186353 - 07/20/18 09:11 PM Re: No Prepaid Interest B2B
rlcarey Online
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rlcarey
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Galveston, TX
John, Thoughts please?

In the preamble to the final regulation, I made an argument that this disclosure should be left blank as all other disclosures are required when they are not applicable. They indicated “In response to the commenter that suggested that prepaid interest should be left blank, the label for prepaid interest on the Closing Disclosure form shows components of the prepaid interest equation, including the amount of prepaid interest to be paid per day, and thus the Bureau declines to offer an option to leave blank the amount required to be disclosed by § 1026.38(g)(2).” Comment 1 in 1026.38(g)(2) indicates “1. Guidance. For additional guidance on prepaids, see comments 37(g)(2)-1 and -2.” In the commentary to 1026.37(g)(2), the ability to leave these fields bank is found in Comment 4 and not in either Comment 1 or 2. As such, it appears that these fields must populate on the CD, even if it reflects 0 days.
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#2186524 - 07/23/18 07:58 PM Re: No Prepaid Interest B2B
John Burnett Offline
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Cape Cod
Thoughts? The Bureau didn't do a good job here. They ought to have also referred to 37(g)(2)-4 and permitted the entry and blank parts of the label to be left blank, just as permitted for the same item on the LE.

That said, there is some value, I suspect, to having a $0.00 entry here, and that may have been the CFPB's intent. It can show that the field wasn't missed; it was intentionally disclosed as $0.00

So, in answer to Randy's question, the technically correct way to complete this entry under TRID 2.0 appears to be to put a per diem amount in the label and the closing date in both the "from" and "to" spots and "$0.00" in the borrower-paid at closing column.
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#2186702 - 07/25/18 12:50 PM Re: No Prepaid Interest B2B
RR Joker Offline
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The Swamp
Right or wrong, currently, my CD leaves the label, but $/day and from/to are blank and the column populates with $0.

This may change as my vendor begins/continues it's 10-18 updates.
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#2193763 - 09/25/18 08:09 PM Re: No Prepaid Interest John Burnett
RVFlyboy Offline
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Soaring over Georgia
Originally Posted By John Burnett
On the CloD, , same as LE except you do indicate $0.00 in the borrower paid column. Leave the labels there.
John, where do you find an indication that it needs to be disclosed in the borrower paid column. And even with that, should it be in the At Closing or Before Closing column, or does it matter? Also, in a subsequent post in this thread to the one quoted, you indicate that the label should be completed with a per diem amount (I presume still $0.00) and the closing date in both the "from" and "to" spots. Where do you find this citation?
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#2194431 - 10/02/18 03:31 PM Re: No Prepaid Interest B2B
RVFlyboy Offline
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Soaring over Georgia
Just as a follow up - I submitted the question to the Bureau and here's the gist of the phone guidance I received:

The intent for the $0.00 disclosure requirement when the borrower is not paying prepaid interest was only intended to apply to situations where there was prepaid interest, only it was being paid by someone else. It was not intended to apply to situations where there simply wasn't any prepaid interest. That said, though, he admitted the wording did leave something to be desired and did not convey that intent and also left other issues muddy as well. His advice for when there is no prepaid interest was to put $0.00 in the "Paid by Borrower at Closing" column. He said he didn't have any guidance on whether or not we should complete anything with regard to the label and indicated he didn't think it was likely we'd be cited by an examiner for either leaving the label blank or filling anything into the label.
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