Thursday, October 1, 2015

TRID - Process Management - From Scratch

GFE/HUD-1 Are NOT Extinct - merely deprecated

Of the many TRID change challenges, one curve ball that continues to confuse: GFE and HUD-1 still remain in use! TRID doesn't apply to all transaction - some retain the the GFE/HUD-1 process. Ensuring the correct disclosures at the right part of the process is an important component of compliance.


Your old GFE Process doesn't get deleted, it gets denigrated from a primary to a secondary process (depending on your business model). If your business focuses primarily on reverse mortgages, home equity lines of credit or mobile homes, your business continues as usual; the TRID process applies as secondary in the event you pick up a customer to which it applies. Also, business loans, farm loans, temporary financing, such as construction only loans, lot loans and conversions remain exempt.

Loan Estimate Process and Closing Disclosure Process

The procedures remain relatively unchanged. The major difference causing concern among the industry, revolves around the idea that any changes to the Closing Disclosure result in a 3 day closing delay. This will only happen if 

  1. The APR (annual percentage rate) increases by more than 1/8 of a percent for fixed-rate loans or 1/4 of a percent for adjustable loans. A decrease in APR will not require a new 3-day review if it is based on changes to interest rate or other fees.
  2. A prepayment penalty is added, making it expensive to refinance or sell.
  3. The basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest-only payments.
Theoretically, if we strip out all of the day-to-day processing time frames for documents, appraisals, title work and other time-consuming verification, a loan could still close within 7 Precise Regulatory days of application (because the customer must receive the initial disclosure at least 7 Precise Regulatory business days - in lieu of Actual Business Days - prior to closing.) 

Don't Forget the Home Loan Toolkit!!

The Home Loan Tool Kit replaces the "Settlement Costs Booklet" that we have been busy not giving to customers for the last 40 years. This is a foundational piece of the Know Before You Owe process. We have some problems with the information disseminated within the Tool Kit - specifically some mis-information with regard to locking in, but it generally represents a more customer friendly read and it references all of the other TRID material.

Your FREE Know Before You Owe Policy

Of course, remember we have been providing you with a FREE TRID policy since the beginning of the year. Now is the time to examine the easy way to manage your compliance policies and procedures with our Compliance VP Document Management System. 

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