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Frequently Asked Questions CFPB’s TILA-RESPA …

The information provided is for informational purposes only and should not be used or relied upon for any other purpose. Thisinformation is not intended nor should it be construed as providing legal advice. Old Republic National Title Insurance Company doesnot guarantee, and assumes no responsibility for, the accuracy, timeliness, correctness, or completeness of the information. Alwaysseek the advice of competent counsel with any Questions you may have regarding any legal 13, 2016 Page 1 Frequently Asked QuestionsCFPB s TILA-RESPA IntegratedDisclosure (TRID) RuleTo use the index, click on a topic below to be taken to that topic location in the 1:General QuestionsSection 2:Exempt TransactionsSection 3:Loan Estimate (LE)Section 4:3-Day Review PeriodSection 5:Closing Disclosure (CD)Section 6:Communicating with CreditorsSection 7:Owner s Title Insurance PremiumSection 8:SellerSection 9:Simultaneous IssueSection 10:APRS ection 11:Day of ConsummationSection 12:Post-ClosingSection 13:Industry IssuesThe information provided is for informational purposes o

The information provided is for informational purposes only and should not be used or relied upon for any other purpose. This information is not intended nor should it be construed as providing legal advice.

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Transcription of Frequently Asked Questions CFPB’s TILA-RESPA …

1 The information provided is for informational purposes only and should not be used or relied upon for any other purpose. Thisinformation is not intended nor should it be construed as providing legal advice. Old Republic National Title Insurance Company doesnot guarantee, and assumes no responsibility for, the accuracy, timeliness, correctness, or completeness of the information. Alwaysseek the advice of competent counsel with any Questions you may have regarding any legal 13, 2016 Page 1 Frequently Asked QuestionsCFPB s TILA-RESPA IntegratedDisclosure (TRID) RuleTo use the index, click on a topic below to be taken to that topic location in the 1:General QuestionsSection 2:Exempt TransactionsSection 3:Loan Estimate (LE)Section 4:3-Day Review PeriodSection 5:Closing Disclosure (CD)Section 6:Communicating with CreditorsSection 7:Owner s Title Insurance PremiumSection 8:SellerSection 9:Simultaneous IssueSection 10:APRS ection 11:Day of ConsummationSection 12:Post-ClosingSection 13.

2 Industry IssuesThe information provided is for informational purposes only and should not be used or relied upon for any other purpose. Thisinformation is not intended nor should it be construed as providing legal advice. Old Republic National Title Insurance Company doesnot guarantee, and assumes no responsibility for, the accuracy, timeliness, correctness, or completeness of the information. Alwaysseek the advice of competent counsel with any Questions you may have regarding any legal 13, 2016 Page 2 Frequently Asked QuestionsCFPB s TILA-RESPA IntegratedDisclosure (TRID) RuleOld Republic Title offers customized PowerPoint presentations for our agents so that you can Show What You Know to your lender and real estate agent clients.

3 We have information,guidance and materials available for you to be a knowledgeable resource for your following are what we have found to be commonly Asked Questions from Show What YouKnow and other TRID training to help you with TRID : The terms creditor and lender are used interchangeably in this 1: General QuestionsDo the provisions of the new Rule apply to private lenders?The answer is yes and are two new Rules private investors must understand; first is the TILA-RESPA IntegratedDisclosure (TRID) Rule and second is the Loan Originator (LO) TRID Rule has an exemption for any lender making five or fewer loans per year. As anexample, if it is a simple seller take-back or a parent/child transaction the TRID Rule will notapply; however, the LO Act may make this type of loan difficult to make.

4 The LO Act can befound the provisions of the Rule apply to second mortgages?Yes. There is actually an example of a form in the Rule showing that the proceeds from thesecond mortgage are brought over to Section L of the Closing Disclosure (CD) for the the Rule apply to five-year residential loans?The provisions of the Rule apply to most closed-end residential mortgages. Within the Rulethere is a discussion as to why the cfpb decided to include two-year temporary constructionloans so depending on the type of loan to which you are referring, the Rule may information provided is for informational purposes only and should not be used or relied upon for any other purpose. Thisinformation is not intended nor should it be construed as providing legal advice.

5 Old Republic National Title Insurance Company doesnot guarantee, and assumes no responsibility for, the accuracy, timeliness, correctness, or completeness of the information. Alwaysseek the advice of competent counsel with any Questions you may have regarding any legal 13, 2016 Page 3 Does the Rule cover vacant land and construction-to-permanent loans?The Rule covers all closed-end residential mortgages if the money, property or service is usedprimarily for personal, family or household purposes and the debt is secured by a closed-endtransaction secured by real property. Real property includes vacant land, construction-onlyloans and construction-to-permanent 1275 of the Rule cites: D. Coverage of the Final RuleThe integrated disclosure provisions do, however, apply to construction-only loans, vacant-landloans, and loans secured by 25 acres or more, although these transactions are currently exemptfrom RESPA coverage, because the Bureau believes that excluding these transactions woulddeprive consumers of the benefit of enhanced disclosures.

6 Page 1757 (a)(9)(iii) of the Rule cites: Construction. Section (a)(9)(iii)requires the creditor to disclose that the loan is for construction in transactions where thecreditor extends credit to finance only the cost of initial construction (construction-only loan),not renovations to existing dwellings, and in transactions where a multiple advance loan may bepermanently financed by the same creditor (construction-to-permanent loan). In a construction-only loan, the borrower may be required to make interest only payments during the loan termwith the balance commonly due at the end of the construction project. The following sections in the Rule offer creditors guidance on how to complete the LoanEstimate (LE) for construction-to-permanent loans: (c)(6)(ii), comments 17(c)(6)-2 and -3, and appendix D to this the form and related requirements apply to second homes and investmentproperties with 1-4 family units?

7 Yes it does if the property is deemed residential by the Provider ListsIf the creditor/lender requires a service only because it was mentioned in theContract for Sale, does it trigger the creditor/lender s need to supply a list of serviceproviders for that service? cfpb s verbal response was, yes. If the creditor/lender includes the requirement on theircommitment, then it is deemed a loan requirement and the lender must comply with providinga list of service providers for that service. We Asked , what if the creditor/lender includes asimple requirement that the consumer must meet all of the requirements of the Contract of Salebut does not mention any specific services? The cfpb representative said, Nice try.

8 He wenton to explain that it doesn t matter how the creditor/lender learned about the servicerequirements or how it s worded on the commitment, they must comply with the additionalprovisions of the Rule if their loan is conditioned on meeting the information provided is for informational purposes only and should not be used or relied upon for any other purpose. Thisinformation is not intended nor should it be construed as providing legal advice. Old Republic National Title Insurance Company doesnot guarantee, and assumes no responsibility for, the accuracy, timeliness, correctness, or completeness of the information. Alwaysseek the advice of competent counsel with any Questions you may have regarding any legal 13, 2016 Page 4 Example: If the Contract of Sale requires the consumer to purchase a home inspection andthen the creditor/lender mentions it directly or indirectly in the loan commitment, thecreditor/lender must supply a provider list of home inspector(s).

9 Section 2: EXEMPT TRANSACTIONSWhat types of transactions are exempt from the requirements of the new Rule?HELOC, reverse mortgages, loans made by creditors making five or fewer loans per year (butthey still have to deal with the Loan Originator (LO)Act), cash, commercial purpose loans,mobile home loans and no-interest second mortgages made for down payment assistance, andenergy efficiency or foreclosure avoidance are all exempt. Most every other residential 1-4family dwelling closed-end mortgage falls within the scope of the have a client who makes several purchase-money loans each year to investors whopurchase residential properties for repair/improvement and resale. Will the client slending activities fall under the Rule?

10 The Rule specifically exempts lenders who make fewer than five loans per year; however, yourclient will fall under the onerous Loan Originator (LO) Act if the loans are for LO Act can be found will the Rule affect commercial transactions? Under the Rule, will we berequired to have two separate and distinct sets of forms between commercialtransactions and residential transactions?Commercial transactions do NOT fall under the provisions of the Rule. The form used forcommercial transactions will most likely be dictated by the lender; however, check with yoursoftware provider to make certain that the current-HUD-1 and the ALTA Settlement Sheet are inyour system for your use with exempt information provided is for informational purposes only and should not be used or relied upon for any other purpose.


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