Model TRID Policy

Below is a preview of our Model TRID Policy. If you are interested in purchasing the policy for your company's use, please contact info@MortgageBanking.law

TILA/RESPA Integrated Disclosure Policy

Entity sets forth the following policies with respect to its operations and loan products that fall within the Truth-In-Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure Rule, as amended (the TRID Rule). These policies become effective October 3, 2015, or such date as the TRID Rule takes effect.

 

Entity firmly believes it benefits when its consumers make informed choices about their mortgage loans. The TRID Rule is therefore in accord with a core company principle; inasmuch as the general purpose of the Loan Estimate and Closing Disclosure required by the TRID Rule is to clearly inform consumers of their loan’s anticipated and final closing costs. These policies are established to ensure Entity originates mortgage loans and provides consumer disclosures required by and in compliance with the TRID Rule.

 

[Replace “Board of Directors” and “Board” with “Managers” or “Partners” if LLC or Partnership, respectively]Entity’s [board of directors/managers/partners] (the "Board") has adopted these policies. The Board delegates the day-to-day operations of Entity to its officers. Entity’s officers in turn staff a Compliance Department with oversight responsibilities that include compliance with and monitoring changes in applicable laws. Entity’s officers and/or the Compliance Department may submit recommendations to the Board to amend these policies.

 

The Compliance Department and senior operations management are jointly responsible for developing operational procedures, and instituting training for compliance and adherence to these policies and any such procedures.

 

Every employee with loan transaction responsibilities, in accordance with his/her duties, shall be trained regarding these policies and appropriate operational procedures to implement them. Such training shall be mandatory for existing staff and all new hires. Entity will appropriately incorporated these materials into Entity’s annual compliance training regimen.

 

All operations staff and sales staff must comport their behavior to the specific requirements as well as the general intent of these policies, their respective procedures, and the TRID Rule. Communication with consumers must at all times support and reinforce any required statements, written disclosures, and prescribed behaviors contained in any law, policy, procedure, or guideline.

 

Loans Covered by these Policies

These policies apply to closed-end consumer credit loans secured by real property, except reverse mortgage transactions. Most loans to non-natural persons are exempt, except certain loans to trusts formed for tax or estate planning purposes.

 

These policies apply to the following loans otherwise exempt under Regulation X from the Good Faith Estimate (GFE) and HUD-1 settlement statement (HUD-1) disclosure requirements:

 

  • Loans secured by property of 25 or more acres;

  • Loans secured by vacant land; and

  • Temporary financing including construction-only loans (not permanent financing).

 

These policies do not apply to:

 

  • Open-end credit (i.e., home equity lines of credit);

  • Reverse mortgage transactions;

  • Mortgages secured by a mobile home or dwelling that is not attached to real property;

  • Loans for business purposes (e.g. investment property loans); or

  • Loans to entities other than natural persons or irrevocable trusts (e.g. loans to LLCs or Corporations).

 

[CHOOSE ONE – {Entity will not apply these policies to transactions exempt from the TRID Rule, including business purpose loans.} OR {To maintain a consistent consumer experience and for Entity’s better adoption through uniform processing and training procedures, the Compliance Department may decide to apply these policies to transactions exempt from the TRID Rule, including business purpose loans. Loan Estimates and Closing Disclosures provided in exempt transactions must clearly state the disclosures are for informational purposes only. The Compliance Department will establish procedures to insure such use is not done in conflict with transactions that are otherwise subject to the Truth-In-Lending Act or Real Estate Settlement Procedures Act, such as reverse mortgages and HELOCs.}]

 

Effect on Quality Control and Vendor Management

Entity’s quality control and vendor management policies and procedures address Entity’s pre- and post-closing loan quality reviews and due diligence of third parties that provide material settlement services to Entity, including Settlement Agents that close loans subject to the TRID Rule.

 

Heightened Monitoring Period

During the...

Pre-Disclosure Activities

Pre-Disclosure Written Estimates

Senior management shall exercise its discretion in determining whether employees may provide a written worksheet approved by the Compliance Department that describes a consumer’s specific terms or costs before the Entity is required to provide a Loan Estimate. If provided, these worksheets may not resemble or have the headings of the prescribed forms of either a Loan Estimate or a Good Faith Estimate. All Entity worksheets must state clearly and conspicuously the following at the top of the first page in no smaller than 12-point font:

Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan.

Wholesale Considerations

Mortgage brokers may...

 

 

Pre-disclosure Fee Restrictions

For loans subject to the TRID Rule, Entity may charge consumers, upfront, an amount not to exceed the actual charge for a credit report fee. No other charges may be made until the consumer has both received the Loan Estimate and subsequently expressed his/her intent to proceed with the transaction...

 

Wholesale Considerations

A mortgage broker’s practices must...

 

Loan Estimate

TRID Application

The following six specific points of information constitute a “TRID Application” when submitted by a consumer for the purpose of obtaining an extension of credit:

 

  • The consumer’s name;

  • The consumer’s income;

  • The consumer’s social security number (to obtain a credit report);

  • The property address;

  • An estimate of the value of the property; and

  • The mortgage loan amount sought.

 

A TRID Application is deemed received when...

 

Wholesale Considerations

The TRID Rule allows the provision of the Loan Estimate by mortgage brokers...

 

 

Form and Method of Delivery

...

 

Wholesale Considerations

...

 

 

Collecting Additional Information

Because the six items alone that constitute a TRID Application may not provide sufficient information to identify a loan product...

 

 

Wholesale Considerations

...

 

Documenting Consumers’ Intent to Proceed

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Wholesale Considerations

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Pre-Qualification and Pre-Approval

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Wholesale Considerations

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Verifying Documentation

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Wholesale Considerations

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Loan Estimate Timing

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Wholesale Considerations

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Withdrawal and Denial of a TRID Application

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Wholesale Considerations

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Written List of Settlement Service Providers

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Wholesale Considerations

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Loan Estimate Record Retention

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Wholesale Considerations

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Good Faith Cost Basis of Estimates and Permissible Cost Variances

Cost Variance Categories

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The No Variance Category

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Wholesale Considerations

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The 10% Variance Category

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The Unlimited Variance Category

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Third-Party Vendor Estimates

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Wholesale Considerations

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Permissible Revisions to the Good Faith Cost Basis

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Wholesale Considerations

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Exceeding Permissible Variances

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Closing Disclosure

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Wholesale Considerations

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Consummation Timing

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Closing Disclosure Timing

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Revising a Closing Disclosure

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Delayed Consummation

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Consumer’s Waiver of Waiting Periods

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Protection Against Deficiency Judgments

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Loan Servicing Partial-Payments Policy

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Consumer Acknowledgment

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Post-Closing Corrections

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Closing Disclosure Record Retention

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Loan Servicing Considerations

Escrow Closing Notice

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Mortgage Transfer Notice

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