This article is not intended to be an in depth review of the federal regulation known as TRID. Rather, its purpose is to highlight the rules and requirements that are pertinent to Capital City Bank (CCB) lenders and administrative assistants (AAs). 

What is TRID?

In the past, lenders were required to provide clients with somewhat overlapping yet inconsistent information under the Truth in Lending Act (TILA), or Regulation Z, and under the Real Estate Settlement Procedures Act (RESPA), or Regulation X.  These forms have since been combined and simplified under a single consumer protection law known as TILA-RESPA Integrated Disclosures (TRID). 

Under TRID lenders are required to provide certain key information to borrowers within specific timeframes. The information is disclosed to borrowers through the use of 2 disclosures.

• Loan Estimate (LE)
• Closing Disclosure (CD)

Applicable Loan Types

TRID rules apply to all closed-end consumer credit transactions secured by real property. 

• For CCB, the only consumer mortgage loans we currently offer are lot loans.

Timing is very important with TRID loans. The timely request for documents and careful planning of closing is key, as disclosures must be delivered within the established time frames. 

• 3 business days within receipt of application - 
  • LE must be mailed/delivered
• 7 business days before closing the loan - 
  • LE must be mailed/delivered (See 7 Day Rule)
• 3 business days prior to closing - 
  • CD must be received by the client

Key things to remember when calculating dates:

• The clock starts the day following the receipt of the application.
• Saturdays count as a business day.
• Holidays and Sundays do not count in your date calculations. 
• Use the TRID Date Calculation Spreadsheet for additional guidance.
• Allow extra time for adjustments when working with title companies or closing agents to ensure CD's match.

There are 2 disclosures the must be sent to borrowers under TRID, the Loan Estimate (LE) and the Closing Disclosure (CD). Both disclosures are prepared by the Loan Doc Prep team. 

Loan Estimate, First Disclosure

The LE provides consumers with a good faith estimate of credit costs and transaction terms. The following required information is included in the LE:

• General information related to applicants, property, loan, and rate lock status
• Loan terms
• Projected payments
• Costs at closing
• Fee estimates
  • List of fees client cannot shop for
  • Written list of fees and providers the client can shop for (Shopping List)

The LE is mailed and uploaded to Synapses by the Loan Doc Prep team.

Closing Disclosure, Second Disclosure

The CD is a closing statement that lists all fees and payments, the actual terms and costs of the transaction.

• Loan Doc Prep prepares the CD, they do not send it. The CD is delivered by, or sent to, the client by either the lender or the AA.

• If closing with a title company or closing agent, their CD MUST match the Bank's CD with no exceptions. We must ensure that all fees are properly disclosed on the LE, and any differences between the LE and CD are within tolerance levels. 
  • If a loan is closed with fees charged over the tolerance level the Bank is responsible for reimbursing the client for the difference. 

There are 3 variation (tolerance) categories related to fee changes from the LE to the CD.

• General Rule: No variations are permitted
  • Cannot charge more than the LE amount unless there is a valid change of circumstance.
  • A Change of Circumstances includes:
    • Fees paid to the bank
    • Fees paid to an unaffiliated 3rd party the client could not shop for
    • Transfer taxes
• Variations permitted for certain charges: The Bank is allowed to charge more, but only for specific things.
  • Prepaid interest
  • Property insurance premiums
  • Property taxes
  • Amounts in escrow
  • Services required by the Bank that the client was allowed to shop for AND the client selected a provider that was not on our written list of service (the shopping list provided with the LE).  
• Limited increases permitted for certain charges (10% aggregate): The Bank is allowed to charge more than the LE amount as long as the difference is no more than a 10% aggregate.
  • Recording fees
  • Charges for 3rd party services where:
    • Charge is not paid to the Bank or Bank affiliate
    • Client is permitted to shop and selects a 3rd party service provider not on the Bank's written list of service providers (not a bank affiliate)
    • Owner's title insurance not required by the Bank
    • Can cover mistakes/omissions: “This is true even if an individual charge was omitted from the estimate provided…and then imposed at consummation.”

A change of circumstance occurs when there is a fee change or an additional fee after the LE has been sent to the client and the change falls under the General Rule or the 10% Aggregate Rule. If a change of circumstance happens the tolerance levels can be reset by sending a revised LE. 

The change of circumstances must fall under 1 of the following 6 reason to allow a reset.

• Changed circumstance affects settlement charges. The circumstance causes the aggregate amount of settlement charges to increase more than 10% after the LE has been provided.
  • “Extraordinary event beyond the control of any interested party or other unexpected event specific to the consumer or transaction.”
  • Information that the creditor relied upon was inaccurate or changed after the disclosures were provided
  • New information that the creditor did not rely on when providing the original disclosures
  • Note: Although you can provide a revised LE if the change does not exceed 10% in the aggregate, the baseline will not reset.
• Changed circumstance affecting eligibility. A circumstance occurs after the LE has been provided that affects the consumer's eligibility for the loan.
  • For terms for which the consumer applied or the value of the security for the loan
  • For example: Credit score changes, appraised value comes in lower than expected
• Revisions requested by the consumer. 
  • Such as a different loan product
• Rate lock (float-to-lock) causes points or lender credits disclosed on the LE to change
  • In this case, the creditor must provide a revised LE within 3 days in this case. 
• Expiration: The client did not indicate intent to proceed within 10 business days after the LE was provided
• New construction loan and settlement is delayed. 

If a change of circumstances has occurred, the client must fill out and sign a Changed Circumstance form. Once complete, send the form to Loan Doc Prep. Doc Prep will prepare and send a revised LE to the client and upload it to the pending loan file in Synergy. 

• Note: Once the revised LE has been sent, closing cannot occur for at least 7 business days