TRID AND DAYLIGHT SAVINGS TIME

Daylight Saving Time (DT) begins on March 12, 2017. What does that have to do with TRID? The TRID rules under Regulation Z require creditors to disclose the time zone applicable to its location when disclosing the date and time the interest rate lock and estimate of closing costs will expire on the loan estimate. As a result, financial institutions located in areas that observe DT need to remember to change the time designation used under the Rate Lock section on their loan estimates.

Verify that your loan origination software updates the time designation properly. In addition, loan estimates issued during the period just prior to the change to DT, when Standard Time (ST) is still in effect, may expire after the time designation has changed to DT and must reflect that change when inputting the expiration date and time. For example, if a lender in the Eastern time zone delivers a loan estimate on  March 6th, while EST is still in effect, and the interest rate lock and estimate of closing costs expire on or after March 12, the lender must show the expiration time zone as EDT, since DT will be the time designation in effect when the rate lock and estimated closing costs expire.

This is a small item that can be easily overlooked; it is also an easy violation for an examiner to identify. Please take a few minutes to make sure your disclosures have the correct time zone.

 

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