Now that TRID has been in effect for nearly four months, lenders have had a chance to adjust to the new requirements. By and large, title companies and lenders have done an exceptional job at meeting the new demands. These early successes, however, have not been universal. Over the last three and a half months, a number of lenders have found themselves in violation. Two attorneys, both of them RESPA experts, and one of them a former CFPB attorney, have identified the top five TRID violations.
1. Issue Dates for the Loan Estimate and Closing Disclosure
One common violation is when both the Loan Estimate and Closing Disclosure have the same issue date. This shows that they were issued on the same day—a violation of TRID’s new issue date requirements.
2. Title Fees
With 2,000 pages of rules and guidance, TRID rules are very specific. Violations have occurred when title fees do not have “Title – ” in the description. For example, “Title – Settlement Agent Fee”. The regulatory text has a space between “Title” and the hyphen, and the new closing documents must have a space as well.
3. Contact Information
Violations have occurred when the applicable contact information is not included in the correct format. The real estate/broker’s license number must be included. However, when the particular contact is not required to have a license, the License ID space may be left blank.
4. Alternative “Cash to Close”
Violations have occurred when refinances using the alternative Closing Disclosure form present subordinate financing math in an unclear way. The Office of Regulations at the CFPB has stated that if an alternative Closing Disclosure is used, there is no need to show subordinate financing at all. It is the settlement agents’ job to combine the cash to close totals themselves.
5. Settlement Agent File Number
For identification purposes, the settlement agent must include their file number on page 1. Some settlement agents have failed to so, and this has resulted in a violation. This number may include letters and numbers, and must correspond with the number agents use to identify files in their own systems.
Avoid Delays and Violations by Closing with Lakeside Title Company
Lakeside Title Company closes over 4,000 transactions a year from 14 locations across Maryland, Pennsylvania, and Virginia. We serve the D.C. metro area, Maryland, Southern Pennsylvania, and Northern Virginia with title insurance and closing services for residential and commercial refinances and sales, 1031 exchanges, and much more. For more information, please visit our homepage or contact us today. If you found this blog helpful, we invite you to share it on your company’s social media pages or with your friends and colleagues.
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