Skip to content
BOL Conferences
Thread Options
#2263154 - 12/03/21 06:06 AM TRID - Cross-Collateralization
Inspector Offline
Gold Star
Joined: Apr 2016
Posts: 283
I was presented with an interesting scenario today that I wanted to get other perspectives on. It seems to me like I am missing something but can't put my finger on it.

Scenario came up in the discussion of the implications for flood insurance from cross-collateralization provisions in a deed-of-trust. Essentially, a commercial loan with real estate is made with a DOT that includes a cross-collateralization provision. Later some other kind of closed end loan, consumer loan is made to the same borrower. Someone is saying this is now TRID covered. It sounds strange to me but it also makes sense because it checks all the boxes: consumer, closed-end, secured by RE.

Does this create a TRID disclosure requirement? Or am I missing something?
_________________________
Opinions expressed are my own and do not reflect legal advice or the opinions of my employer.

Return to Top
TRID - TILA/RESPA Integrated Disclosures Rule
#2263155 - 12/03/21 10:26 AM Re: TRID - Cross-Collateralization Inspector
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Sounds like you have a handle on it. It would be subject to TRID and the Flood insurance requirements.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2263188 - 12/03/21 06:18 PM Re: TRID - Cross-Collateralization Inspector
TMatt87 Online
Diamond Poster
TMatt87
Joined: May 2011
Posts: 1,984
Idaho
With the flood issue and now a possible TRID issue, it seems like we should just get rid of the cross collaterization agreements altogether. It doesn't seem worth it to me.
_________________________
All opinions are my own, not my employer's

Return to Top
#2263191 - 12/03/21 06:26 PM Re: TRID - Cross-Collateralization Inspector
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Why anyone would bother with CC agreements on loans made to individuals has always been a little beyond me anyways. On entities, it is another story and then you have no worry about consumer purpose loans and you can put exclusionary language in your security agreements that void any cross-collateralization clauses if the property is located in a SFHA.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2263195 - 12/03/21 06:36 PM Re: TRID - Cross-Collateralization Inspector
TMatt87 Online
Diamond Poster
TMatt87
Joined: May 2011
Posts: 1,984
Idaho
We have a lot of farm customers that have several loans in their personal names. We would get significant pushback from credit admin if we tried to remove CC agreements for those customers. I think I'll suggest additional carve out language to exclude any consumer loans from the CC agreement.
_________________________
All opinions are my own, not my employer's

Return to Top