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Do We Finally Have Clarity on TRID?

The industry has long called for clarification of the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosure rule—or TRID—and today, the Bureau finally delivered. The CFPB released its final updates to the “Know Before You Owe” rule Friday morning.

Today’s updates offer clarifications and technical corrections to the existing TRID rule, which went into effect on Oct. 3, 2015. The rule created a streamlined series of forms that aims to help consumers better understand their mortgage loans and avoid surprise costs and fees come closing time.

“A mortgage is one of the largest financial decisions a consumer will ever make, and CFPB’s rules help ensure consumers have the easy-to-understand information they need before making a decision that will significantly impact their financial lives,” CFPB Director Richard Cordray said. “Our updates will clarify parts of our mortgage disclosure rule to make for a smoother implementation process for lenders and consumers.”

The biggest issue addressed in today’s updates were tolerances for the total of payments. The updates read, “Before the Know Before You Owe mortgage disclosure rule, the total of payments disclosure was determined using the finance charge as part of the calculation. The Know Before You Owe mortgage disclosure rule changed the total of payments calculation so that it did not make specific use of the finance charge. The Bureau is now finalizing updates to include tolerance provisions for the total of payments that parallel the tolerances for the finance charge and disclosures affected by the finance charge."

The updates also added clarity on issues surrounding housing assistance lending, cooperatives, and privacy and sharing of information.

“The Know Before You Owe mortgage disclosure rule requires creditors to provide certain mortgage disclosures to the consumer," the updates read. "The Bureau has received many questions about sharing the disclosures provided to consumers with third parties to the transaction, including the seller and real estate brokers. The Bureau understands that it is usual, accepted, and appropriate for creditors and settlement agents to provide a Closing Disclosure to consumers, sellers, and their real estate brokers or other agents. The Bureau is finalizing additional commentary to clarify how a creditor may provide separate disclosure forms to the consumer and the seller.”

Read the full updates to TRID at ConsumerFinance.gov.

The CFPB has also announced a follow-up proposal to TRID, which will address when creditors can use Closing Disclosure forms rather than Loan Estimates to determine if estimated closing costs were disclosed in good faith and within tolerance. The Bureau will accept comments on the proposal for the next 60 days. View the full proposal at ConsumerFinance.gov.

About Author: Aly J. Yale

Aly J. Yale is a longtime writer and editor from Texas. Her resume boasts positions with The Dallas Morning News, NBC, PBS, and various other regional and national publications. She has also worked with both the Five Star Institute and REO Red Book, as well as various other mortgage industry clients on content strategy, blogging, marketing, and more.
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