Fidelity/Riverside CLE on TRID

Riverside is always on the forefront of changes in the title industry. We were honored to host Mary Jane Keyse, State Regulatory Counsel and Senior Agency Counsel for Fidelity National Title Group.  She gave a very informative CLE seminar on the new Loan Estimate and Closing Disclosure as well as other aspects of the upcoming TRID legislation that is scheduled to go into effect on October 3rd, 2015. Below are some major points that were discussed.Click on the links to download samples of the Loan Estimate and Closing Disclosure as well as the Seminar handout. You can watch the entire presentation here. 

Owner Policy Disclosure

The CFPB requires us to list a Fee (Owner’s) Policy as an optional cost. Besides for this requirement, they want us to disclose the fees in a way that portrays the fees for this “optional” policy in a way that shows a borrower what it would cost them if they chose NOT to buy title insurance for themselves.

For example Supposing “Jane Smith” is buying a house for $200,000.00 with a $100,000.00 mortgage. In New Jersey the fee (owner) policy costs Jane $950 and the loan policy as a simultaneous rate is just $25. If Jane says she doesn’t want the “optional” fee policy and will just take the (bank required) loan policy she doesn’t pay just $25.00, she would pay a loan policy premium of $525.00. The CFPB now wants us to disclose this to Jane as the amount due for a loan policy, regardless of what “option” she chooses not the actual $25.00

 

Old Way:          Owner’s Title Insurance                          Hud Line 1103               $950.00

                        Lender’s Title insurance                          Hud Line 1104               $  25.00

 

New Way:         Title – Lender’s Title Insurance                CD Section C                  $525.00      

                        Title - Owner’s Title Insurance (optional)   CD  Section H                $450.00

 

The total is the same but it has to be split differently and actually somewhat inaccurately.

Waiting Periods

Lenders are required to submit a loan estimate to a borrower within 3 days of receiving an application. We discussed a little about the loan estimate and how it replaces the old First TILA and the GFE.

Once the CD (what the new HUD is called) is approved by all parties, this disclosure must be delivered to the borrower. This used to be done at closing along with a Final TILA. Now, it has to be delivered to the consumer 3 days prior to closing or what is now being called, consummation. CFPB assumes it takes at 3 days to deliver (it is not clear if hand delivery or email confirmation of delivery from the borrower will suffice ). Then an additional 3 days are required for the borrower to review the closing disclosure. This represents a huge departure from the common practice of hammering out details of closing figures the day of closing.

Preparing the new documents

The main thrust of the presentation are that actual difference in preparing a CD and Loan Estimate as opposed to HUD, TILA and GFE.

 

You can watch the entire Presentation here. Check out the CFPB complinace manual here