Compliance Roundup – TRID 2.0 Focus

TRID 2.0 News

As the hard deadline with the new 2018 TRID rules approaches, a number of updates were made last month that will impact lenders going forward and help them remain in full compliance.

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The first of these relates to how a principal reduction should be disclosed on the Closing Disclosure. As a result, we modified our generic copies of the CD to support the formats of the principal reduction disclosures outlined in this Principal Reduction Formats document. In addition, we modified a series of fields to support the new formats. More.

Also, under the new TRID 2.0 rules, a rule required under TRID 1.0 that required “$0” to be disclosed on Line F.03 of the Closing Disclosure if no prepaid interest existed in a transaction has now been changed to “$0.00.” To comply with this change, we will modify both the generic English and Spanish versions of the Closing Disclosure (Cx18566 and Cx18991) to print “$0.00” instead of “$0” in BOTH the “per day” and “total” amounts for Line F.03. “$0.00” for the total will appear in the Borrower-Paid At Closing Column. More.

Finally, one of the TRID 2.0 amendments allows creditors to exclude recording fees and transfer taxes when determining if the total costs payable by the consumer are less than 1 percent for home-buyer assistance loans partially exempt under Regulation Z. This required us to remap some fields. The “Total Fees Paid By Borrower Percent of Loan Amount” field will continue to be used to map the “Integrated Disclosure Loan Indicator.” field for non-TRID 2.0 loans. For TRID 2.0, “Total Fees Paid By Borrower Minus Taxes and Other Government Fees Percent of Loan Amount” (FI 121945) will be used instead. More.

This change also required us to rewire certain data integrity checks, which has now been completed. The “Total Fees Paid By Borrower Percent of Loan Amount” field will continue to be used to trigger data integrity checks for TRID 1.0 loans and loans with application dates before October 1, 2018.  For TRID 2.0 loans and loans with application dates on or after October 1, 2018, “Total Fees Paid By Borrower Minus Taxes and Other Government Fees Percent of Loan Amount” (FI 121945) will be used instead.  Any logic that is in-place for these checks with the date of “10/3/2015” has been completely removed. More.

State and Investor Compliance News

A number of states and one federal agency updated compliance requirements in August. Full details are available on our compliance blog, and here are the highlights.

Maryland. The “Maryland Financial Consumer Protection Act of 2018,” previously announced, authorizes a lender to elect to make a certain loan to a borrower under certain circumstances. After a careful review, we found a lack of demand from our clients for elections that would require document changes. We will not, therefore, proceed to create any new election documents based on the new provisions of the Act, unless clients specifically request them. More.

New Jersey. Gov. Phil Murphy signed A.N. 2035 (2018) into law last month. The new law amends several provisions of the “New Jersey Residential Mortgage Lending Act,” including what types of fees mortgage brokers may charge and enhanced definitions of such charges. The effective date is November 22, 2018. We are reviewing. More.

Vermont. The state’s Department of Financial Regulation has recently revised sections of its Admin. Code, including Regulation B-98-1, affecting commitment letters. The effective date of these changes is October 1, 2018. We are reviewing. More.

Internal Revenue Service. The IRS has announced that on September 23 it will post an updated Form 4506-T and Form 4506T-EZ, Request for Transcript of Tax Return, that will have a new Line 5b for a 10-digit Customer File Number. As of September 23, third parties or taxpayers can create any 10-digit number, except for the taxpayer’s SSN, for use as an identifier. More.

Document Changes

A few documents underwent small changes in the month of August. The modifications are summarized here with links to the full descriptions of the revisions.

  • Marital status on Louisiana Security Instruments (Cx327, Cx485, Cx19376) has been modified. More.
  • Cx18893 has been updated to match the latest change in the Department of Agriculture’s form RD 3555-21. More.
  • PMI Disclosure Modifications for California, Connecticut, and Washington.
  • The first of several Construction and Renovation changes to FHA Security Instruments have been made. More.
  • Conditional Commitment Direct Endorsement forms (Cx4566, Cx4733, Cx4734) have been revised. More.
  • Updates to Maryland Security Instruments (Cx329, Cx487, Cx3040, Cx19378). More.
  • We are updating four Data Integrity Checks to flag potential data problems on the Calculating Cash to Close table on the Closing Disclosure (our Cx18566 and Cx18991 – Spanish). The Data Integrity Checks are specifically looking at the Total Closing Costs (J), Down Payment/Funds from Borrower, Seller Credits, and Adjustments and Other Credits. More.

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