Final TRID Rule

It is out:

https://www.consumerfinance.gov/about-us...age-disclosure/

So it's a final with another proposal attached?

....and only 560 pages of light reading!

I just saw a headline that says the final rule does not resolve the black hole issue.

I think they kicked it down into the other proposal - but I wasn't going to read that until I finished the final rule. 400+ pages to go....

So you'll have a nice executive summary for us when you arrive 7/30?!

Read through sections of the NEW proposed rule, specifically those relating to the black hole.. still don't understand why they couldn't have just finalized as proposed. I understand the concern that lenders will start sending out CD's much earlier in the process if the four day restriction is removed but we still have to abide by the CC rules triggering redisclosure/tolerance resets..

my head hurts...

I got up to page 131......I have fallen into the black hole!

I understand the concern that lenders will start sending out CD's much earlier

We have lenders in this area that provide the CD the same or next day as they do the LE. As I've read the proposal, and I'm only about half way through it, I no longer see the purpose of the LE.

Do ya'll read all 560 pages.....??? What parts are good to skip, if any?

I haven't started the revision yet. I just skimmed through the 40 + pages of the proposal. I'm doing quarterly audits and I'm on vacation the week of the 24th so I won't start reading the revision until at least the first of August when I get back.

Exactly! More quantity over quality! This group is the black hole!

Perfect case of analysis paralysis!

This makes no sense to me:

In the case of a construction-permanent loan that a creditor
chooses to disclose as multiple transactions, the creditor must allocate to the construction
transaction finance charges under § 1026.4 and points and fees under § 1026.32(b)(1) that would
not be imposed but for the construction financing. If a creditor charges separate finance charges
under § 1026.4 and points and fees under § 1026.32(b)(1) for the construction phase and the
permanent phase, such fees and charges must be allocated to the phase for which they are
charged. All other finance charges under § 1026.4 and points and fees under § 1026.32(b)(1)
must be allocated to the permanent financing. Using the “but for” allocation for these amounts
when separate disclosures are provided for the phases of a construction-permanent loan will
allow creditors to determine more accurately whether the permanent phase is a high-cost
mortgage or higher-priced mortgage loan or qualified mortgage.



It seems to be saying "finance charges and points and fees must be disclosed on the construction phase"...but then "finance charges and points and fees must be disclosed on the perm phase". I'm sure i'm missing something.

Ok...i guess the key phrase is "but for the construction financing".

The point they are making is that you should allocate the fees based on the phase they pertain to. I think people were circumventing limits by charging fees on the permanent loan at time of construction, if I had to take a WAG at it.

I am VERY happy to see we will be able to use the land PLUS improvements on construction phases. Only disclosing land until the CD of the permanent phase never has made any sense to me. I wish they'd do the same for titled manufactured home/land deals. I understand titled = chattel property and not RE, but still, it would make more 'logical' sense.

I think they were doing the opposite.....putting all the fees on the construction phase, which if for 12 months or less was exempt from ATR and HOEPA. That paragraph is just a bit confusing to read.

Oh...i just re-read your sentence....that's what you said too. Sorry.

That's how I essentially read it... We have always stressed the importance of NOT sending out the CloD too soon... it will be interesting to see what happens after this is finalized.

Never a dull moment...

There has been some discussion on the boards regarding construction-only loans and where the construction holdback funds go on the LE/CD. In reading pages 172-175 of the new rule, can someone tell me if the CFPB is now stating that the construction holdback fund should no longer go in Section H as other costs?

Yup - that is what they are saying

Dagnabit! That is what I thought it said. Now to change my process back to the way we were doing it previously. Got to love 'final' rules. Thanks Randy!

I haven't gotten that far...so they are saying it needs to go in K., right?

I hope so...that's where we already put them.

I hope so too, but I could sure swear I had read the opposite and have not been happy about it either. I sure hope it was just my dyslexia at work!

What did you think it said?

I came to the conclusion to use Section K previously as well, but one issue with that is where does that correspond on the LE? Should the LE just basically act like the holdback funds do not exist, or should this amount show up in "Adjustments and Other Credits" on the LE? I think when I tried to implement that method our LOS couldn't make it work.

It is shown in payoffs and payments and balances out perfectly for true funds to close. Then on the CD, it's shown in K as "held for construction' or "held for improvements' whatever the case may be.


RJ, I thought the new 'opinion' was to put it in H...which is ludicrous in my very own personal opinion.

That was the CFPB proposal (Section H) and they did a 180 in the final.

So, if in the case of a construction perm loan being disclosed as a single transaction, would this change also apply? We are currently using H for our construction holdback funds on the LE.

Awesome!

Joker - are you just using the standard form for your construction loans then?

Model H-25(J) typically.

[page55-57]

Construction and Permanent financing, or not.

Would you conclude that this is saying that you would not prepare a disclosure package for a permanent loan unless the borrower indicated they plan on getting their perm with the same FI? IOW, you would not need a take-out letter from elsewhere and can go on what the borrower's stated intentions are when they apply for a construction loan?

"The Bureau understands that it is usual, accepted, and appropriate for creditors and settlement agents to provide a Closing Disclosure to consumers, sellers, and their real estate brokers or other agents."

Does this mean that we have the green light to share CDs with Realtors?

Always could share the respective information with the buyer's and seller's agent - there has been no change.

Was there clarification on if a revised LE is required after rate lock if fees aren't increasing?

Yes - it is required.

That's what I got out of it but it was a bit confusing. Thanks!