The time has finally come, the proposed revisions to the 2015 Integrated Disclosures Rule (TRID) were released in final form today, July 7, 2017. The proposed amendments to TRID were released in July 2016 and gave all compliance professionals a glimpse into the direction the CFPB was headed with the amendments; the proposal provided much needed clarification on many confusing aspects of TRID, including construction loans.
The 560 pages of the 2017 TILA-RESPA Amendments are effective 60 days after the date of publication in the Federal Register with a mandatory compliance date of October 1, 2018. This will allow financial institutions, in short order, to begin relying upon regulation rather than information that was only received through informal guidance and ambiguous provisions. The mandatory compliance date will also allow for the time needed for software updates, testing, policy and procedure updates, and training prior to October 1, 2018.
The final rule provides clarification on the following:
- Creates tolerances for the total of payments: The final rule establishes express tolerances for the total of payments to parallel the existing provisions regarding the finance charge.
- Adjusts a partial exemption for housing finance agencies and nonprofits: The final rule includes two amendments to expand the scope of the existing partial exemption and provide additional flexibility when loans satisfy the partial exemption.
- Provides a uniform rule regarding application of the integrated disclosure requirements to cooperative units: The final rule requires provision of the integrated disclosures in transactions involving cooperative units, whether or not cooperatives are classified under State law as real property.
- Provides guidance on sharing disclosures with various parties involved in the mortgage origination process: The final rule incorporates and expands upon previous webinar guidance in the Official Interpretations to the regulation to provide greater clarity.
Probably the most important elements of the final rule to many financial institutions will be the technical corrections and amendments that provide much needed clarification in the following areas:
- Affiliate charges;
- Calculating Cash to Close table;
- Construction loans;
- Escrow account disclosures;
- Expiration dates on the Loan Estimate;
- Lender and seller credits;
- Post consummation fees;
- Simultaneous second lien loans;
- Rate locks; and
- Many more.
So, while it is more change that we will have to study, implement, and train, the 2017 TILA-RESPA Amendments will hopefully provide the needed clarification we have all been seeking for the past two years. Keep a close eye on our website, jackscomplianceresource.com, as we are in the process of developing programs to get you fully versed on these 2017 Amendments!