TRID Update 1-19-2017€¦ · TRID UPDATES [email protected] (509) 216-3220 A Washington...

TRID UPDATES

[email protected]

(509) 216-3220

A Washington State Approved Real Estate School for Clock Hour Education under R.C.W. 18.85.

TRID Update, Copyright@ClockhoursbyAngie, October 2016

pg. 1

CORRESPONDENCE CLOCKHOURS

INSTRUCTIONS:

1. Print out the class.

2. Read the class material.

3. At the end of the material there is a quiz (all the answers are in

the material that you have read).

4. Answer the questions.

5. Return to me the Quiz, evaluation and a check for the class

payable to CLOCKHOURS BY ANGIE, or complete your

credit/debit card information on the sheet provided

6. Upon receipt, I will email you a certificate.

Disclaimer: I try very hard to have the latest known information on a

subject in these classes, but, the real estate industry is forever changing

with new updates all the time. The class materials are not to be used for

legal advice. In our State, some items are handled different in the

different regions. If you have any concerns, please do not hesitate to

contact me at 509-216-3220 or at [email protected]


pg. 2

COURSE OBJECTIVE

The students of this class will be able to identify many of the problems

that have occurred during this “learning curve” called TRID that

commenced 10/3/15. They will have a better understanding of some of

the possible “red flags” to look out for when there is a same day

signing/funding happening. This class will allow students to recognize

how lenders and settlement agents are trying to work together to see that

their closings are done in a timely manner.


pg. 3

CURRICULUM

Session/Hours Topics Method of

Instruction30 Minutes History of RESPA/TILA Read

material/discussion15 Minutes CFPB new updates Read

material/discussion30 Minutes Review of what was

promisedReadmaterial/discussion

30 minutes Review of newdocuments

Readmaterial/discussion

15 minutes Owners title-ongoingproblems

Readmaterial/discussion

45 minutes Horror stories 1-5 Readmaterial/discussion

15 minutes Review of survey/portals Readmaterial/discussion


pg. 4

TRID UPDATES:

The new rule was first unveiled

to the industry back in November

2013, and after several changes to

implementation date, including

the initial deadline of August 1,

2015 and October 1, 2015 landed

on October 3, 2015, giving

everyone in the industry a little

less than two years to adjust.

The critical changes required

by the new rule involve the

delivery timing of the Loan

Estimate and the Closing

Disclosure forms to the

borrowers. The intent was to help

consumers “understand their

options, choose the deal that’s

best for them, and avoid costly

surprises at the signing table,”

the bureau stated.

One of the first indicators of the

rule’s impact was time to close,

which climbed to a high of 51

days in January 2015. By March

2016 that time to close loans

dropped to 44 days, but started

inching back up over the

summer months.

NOW, here we are, more than

a year under our belt with all

these new changes.

HOW IS TRID WORKING

FOR YOU?????? It was

only 1,666 pages. Did you

happen to read it?

In the real estate industry, it is also known as:

THE REASON I DRINK (TRID)


pg. 5

R.I.P. HUD-1

I wrote a class called RIP HUD1

that was three credit hours and

was FREE! I taught this class 49

times (couldn’t do it one more

time to make 50!) and taught this

class to 990 agents in the Spokane

area. We wanted our agents to be

the best-informed agents out

there

CLOSERS WERE EXCITED!

Here are some of the things we

were told that would happen:

1. Lenders would be

responsible for creating the

Closing Disclosure (CD) not

the settlement agent as was

the norm.

2. Lenders would send a copy of

the Closing Disclosure to

both the purchaser and the

closer 3 days prior to

consummation.

3. Lenders would send loan

documents to closers ahead

of time! Imagine getting the

document 3 days ahead of

time for those FHA/VA

transactions where the

sellers need to sign before

the purchasers, or way ahead

of time due to vacation or

being out of town for other

reasons. Closers hate it when

the have sellers come in to

sign who are leaving town

and they have to ask them if

they will have access to

computer or fax. They would

need to arrange to have those

few documents sent to them

to sign and send back in

order to complete the loan –

many lenders will not give

them to the closers ahead of

time in these situations.


pg. 6

AND DID THIS ALL

HAPPEN????? Some of it

did, most of it did not!

A survey was done with over 100

of the Spokane area Limited

Practice Officer’s (LPO) and here

are some of the issues they are

dealing with instead:

Closing Disclosures

prepared by the lenders

were incomplete and with

wrong information. The first

CD sent to the closer would

have the highest possible

lenders policy, inflated

recording fees and many

times the pro-rates would be

incorrect. And, seller

concessions were often

wrong or entirely missed by

lender working up the CD

Closers would have trouble

“balancing” the CD’s with

their settlement statements.

Title rates and how that had to

be entered were a problem

and so many did not

understand

Privacy issue on the Closing

Disclosure

Documents were not sent to

closers ahead of time, usually

the same day of signing.

If you did get documents

ahead of time, they were

either “time sensitive” or had

“water marks” that would

automatically be removed on

the date of signing. They

were basically useless if you

wanted to have the seller sign

ahead of time.

If you had a seller who

needed to leave town ahead

of time and wanted to sign

documents you knew, if it was

FHA or VA, there would be

some documents in the file

for the seller to sign that

many lenders would not send

ahead of time. There, crept

up in the mix, another

document that some lenders

needed called “addendum to

Closing Disclosure” that had

to be signed by the seller and

many lenders wanted an

original signed document

back (see next page for

sample)


pg. 7

The seller’s CD had no “signature

line” on it so it had to be created

by the closers. Many closings

when the rule first rolled out did

not have the sellers sign any form

of a closing statement. Some

lenders adopted a form that

looked like this and included it in

their loan documents for the

seller to sign at closing.


pg. 8

PORTALSSome lenders were

using “portals”….

For instance, Wells Fargo, Bank

of America, and USAA are using

REALEC (we have this one

integrated into our closing

software. Other lenders, such a

Quicken, are using “stand alone”

portals (not integrated to our

closing software).

The portals are used to

communicate securely with the

lender and collaborate regarding

fees. Unfortunately, lenders want

all fees within a day or two of

opening the file and that is

difficult to obtain with HOA’s, etc.

We have to make sure that we

update the fees in the portal if

anything changes.

When these portals are used

correctly (especially the one that

integrates with our software) it

can be a great thing. The lender

sends us a link that uploads all of

their fees directly to our system

so we don’t have to re-type the

fees from a hard copy of their

closing disclosure, and then we

add our fees and send the Closing

Disclosure back to them.

Unfortunately, this is a rare

occurrence. Some lenders are

poorly trained on how to do this

and still need us to type all of their

fees into our system and then

email them a Closing Disclosure,

just like we used to with the HUD-

1.

If training gets up to speed,

which I am sure it will in time,

these portals can be a time saver

in the future.

DO WE REALLY NEED TO

SIGN THREE CLOSING

STATEMENTS THAT ALL

SAY THE SAME THING?

Another HUGE change we were

not aware of until the practice was

under way for a while was that a

number of lenders wanted to have

a duplicate Closing Disclosure

signed at closing by the

purchasers and sellers, as well as

an ALTA settlement statement.

So, if it was the practice of the

company you were closing with,

many times the seller and

purchaser would sign three

statements that all had the same

information, just a different

format.


pg. 9

1. One page settlement statement that shows the debits and credits and

is very easy to read

2. ALTA settlement statement – usually two pages, also very easy to read

with debits and credits, just more line items to fill where they instruct.

3. Closing Disclosure which is 5 or more pages and delivered to the

purchasers at least 3 days prior to executing their loan documents.

I have attached samples for you to review:

ALTA SETTLEMENT STATEMENT


pg. 10


pg. 11


pg. 12


pg. 13


pg. 14


pg. 15


pg. 16


pg. 17


pg. 18

Title InsuranceDisclosures…..

Instructions from the CFPB to

lenders and settlement agents

on how to enter the fees:

“The Title Insurance Premiums

branch on the tree-view is where

information on the Lender’s and

Owner’s policies is entered. The

CFPB’s rule governing the

presentation of title insurance

premium pricing, in a

simultaneous issuance (Lender’s

and Owner’s) situation, is very

precise and is not the historic

presentation of most of the

Western US marketplace. Rather

than presenting the simultaneous

rate for the Lender’s Policy

(generally a low additional

charge), the rule mandates

presenting the full Lender’s

Policy price, as though it were

not a simultaneous issue

situation, and then the Owner’s

Policy pricing is presented as the

combined simultaneous cost of

both policies, less the full Loan

Policy price. In a situation, typical

in the Western US, where the

seller is paying for the Owner’s

Policy, and the borrower is

paying just the incremental add

for the Lender’s Policy, the rule’s

mandated presentation of pricing

results in an overstatement of

what the buyer/borrower is

responsible for and an

understatement of what the seller

is responsible for. The Title

Insurance Premiums screens

take this matter into

consideration and provide for a

Seller Credit to address the

discrepancy presented by the

pricing presentation mandate, in

simultaneous issue situations

where the seller is paying for the

Owner’s Policy and the

buyer/borrower is paying for the

Lender’s Policy.”

What language is this

written in????


pg. 19

Owners Title Policy

(Here is a better

explanation, I hope)

If a buyer opts not to purchasean owner’s policy, they would notreceive the benefit of asimultaneous issue discountapplied to loan policy premium.Currently, in a typical residentialtransaction, a lender quotes thediscounted rate on a LoanEstimate.

However, any increase in thispremium would result in atolerance violation or increasedannual percentage rate.Therefore, the CFPB wrote intothe rules any simultaneousissue discount will must beapplied to the owner’s policypremium and NOT the loanpolicy premium

Therefore, the lender will needto disclose the full lender’s policypremium on the Loan Estimateand the preparer of the ClosingDisclosure will charge the fullloan premium. The new formulafor calculating the owner’spremium with the simultaneouslyissue discount applied is asfollows:

Owners + Simultaneous – StandAlone = New Owner’s to becharged

This new calculation methodapplies regardless of which partyto the transaction is paying theowner’s policy premium. Forexample, the premiums on thepurchase of a $206,000.00residence with a $204,100.00 loanclosed simultaneously with actualpremiums are as follows:

Owners $814

Lender stand alone $838

Lenderssimultaneously

$318

Owner’s computed as followsbecause of TRID:

$814 + $318 - $838 +520 = $814

Lenders computed as followsbecause of TRID:

$838 –$ 520 = $318


pg. 20

The following is a worksheet that was created to come

up with the figures the lenders need on the LE and CD:

Because of the different ways owners and lenders title insurance is paid

for throughout the country, this formula had to be created for the CD and

how it would be disclosed. And, in some areas of the country, where

purchasers pay both the owners and lenders policy, they were opting out

of not getting owners title policy.


pg. 21

THIS IS SOME INFORMATION

FROM A SEMINAR IN SEATTLE

THAT I ATTENDED:

ESCROW ASSOCATION OF

WASHINGTON (EAW)

Approximately 65% of all

closings require one or more

addendums extending the

dates

Over 50% of all closings are

SAME DAY SIGNINGS/

SAME DAY FUNDINGS

IS THIS THE NEW

NORM???

On the next few pages, there are

some closing/signing stories that

will curl your toes. Hopefully

none of you will recognize the

closings as “oh my, that one

sounds like my horror story”. The

names have been changed to

protect the parties and I will

NEVER, disclose who the lenders

are. These things happen in any

industry forced to change how

things are done with time

limitations. Don’t forget we were

all thrown into this “learning

curve” and are trying to still

figure things out. Some of us

caught on sooner than others.

In defense of our wonderful

lenders in town, the majority has

TRID nailed and they totally

understand the process and their

loans are usually without incident

and they end up with very happy

clients.

But, we have some, who just don’t

get it and are still struggling to

get a grasp.

It is getting better. It really is,

there is a light at the end of the

tunnel.

These stories are closings that

happened around our area by

local settlement agents who have

been kind enough to share their

stories with me.


pg. 22

STORY # 1VESTING PROBLEM

One recent case was where the

purchasers were two single

women. Purchase and sale

agreement did not specifically

say anything about vesting.

Closer prepared the warranty

deed and has the women vested

as both single. Sellers were

leaving town and came in early to

sign their documents. Closer was

promised they would have loan

documents by Thursday late in

the afternoon and lender asked if

the purchasers could come in

Friday morning at 8:00 to sign and

get documents back to lender by

9:30 so it would be a same day

signing/funding.

Appointment was set.

Documents did not come in by the

time the closer left the office at

6:30 on Thursday. Closer got to

the office on Friday around 6:30

and still no documents on

computer. Closer called lender

who was also in early (luckily, she

had the loan officers cell

number). Loan officer said

documents should be there

anytime. It was now 7:50 and the

purchasers were in the lobby

waiting with their agent. The

documents came in to the closers

delight. Closer made copies

immediately for the purchasers

and put in their folder with the

other documents previously

made and went to the lobby and

introduced herself and asked for

copies of their identification in

order to notarize the documents.

The closer signed 8 or 9 of the

documents in the order normally

presented. When she came to the

deed of trust, she noticed the

vesting on the deed of trust said:

“Mary A. Smith and Donna L.

Green, as tenants in common

with the right of survivorship”

Closer was a little shocked to

see the vesting, but being the

professional she was she didn’t

alarm anyone just yet. She let the

clients continue talking to each

other and went back through the

file and first checked the deed

again, as she was pretty sure she

had then as, “both single

women”, but had to check

because with all the closings

done in a month and the rushes

she could have forgotten she was

instructed and did it. It did not

say that. She immediately went to


pg. 23

the purchase and sale agreement

to see if there was direction there.

There was nothing! At that point

she told the clients that she was a

bit confused because of the

vesting they had on their deed of

trust that the lender had on there.

The two women said, yes, that it

was their intention and that they

told their lender. The real estate

agent said she was not aware of

that and asked if there is a

problem. The closer looked at

the closing instructions again to

see if perhaps it was in the

instructions and she missed it. It

was not.

In order to accommodate this

vesting a statement had to be

inserted on the warranty deed

and executed by the purchasers.

This statement needs to say:

“The grantees by signing theacceptance below, evidencetheir intention to acquire saidpremises as joint tenants withthe right of survivorship andnot as community property oras tenants in common.”

Now, remember it is now 8:20 in

the morning and this closing is a

same day signing/funding and

the seller had already executed

their documents ahead of time.

The closer excused herself from

the room and went into her office

and prepared the first page of the

deed with what needed to be on it

and saved the second page which

had the sellers signature and the

notary on it.

She went back into the closing

room and told the purchasers this

was the game plan. As soon as

they were done signing

everything she was going to

contact the seller (hopefully they

are near a fax machine or

computer) and send the new first

page to them to initial and return

back by either scan or Fax. She

would then ask the sellers to

overnight the original page back

to the closer. With the seller’s

permission, the closer will

continue with this transaction and

record, but once that original with

the initials came back the deed

would be re-recorded.

The closer was able to reach the

sellers and they had not left for

their vacation yet and were

getting ready to get on the road.

They said they could stop by the

office and initial the document on

the way out of town in about one

hour! Wow, what luck that was!


pg. 24

This transaction closed on time

and the purchasers got the

vesting they wanted.

At the end of the day the closer

shared the story with some of the

other closers and said, can you

imagine what would have

happened if she had missed this

and closed it with the vesting on

the deed being both single

women. They would not have the

intended vesting. What if one of

them died and the other thought

she would get all of the property,

but instead the deceased’s 50%

went to her heirs. What a mess

this could have been in the future.

Now, this problem happened

because the information did not

get to the closer, but perhaps if

the closer got the documents

ahead of time and had a chance to

review them prior to signing, this

may have been caught.

Maybe…..we’ll never know.

On the next page is a review of

the different types of vesting’s

that are commonly used in the

State of Washington.

Be sure your purchasers

understand the vesting. This is

something that should be

discussed, but encourage them to

ask an attorney for legal advice.

With this class I will be enclosing

the following information as a

flyer for you to have to give your

clients.

THINK ABOUT THIS….. IT IS UP

TO YOU TO ASK THEM ABOUT

VESTING, NOT TO GIVE THEM

LEGAL ADVISE, BUT TO PLANT

THE SEED SO TO SPEAK, SO

THEY CAN ASK THE CORRECT

QUESTIONS OF THE RIGHT

PEOPLE AND SEE THAT IT IS

DONE ON THEIR DOCUMENTS.

DIFFERENCES IN VESTING IN

WASHINGTON STATE

FEE SIMPLE:

A fee simple absolute lasts

forever and is the greatest

possible estate in the land. The

owner has the right to occupy the

land, to use it as he pleases, and

to prohibit others from coming

onto the land, subject only to the

rights of others which have been

previously reserved or granted,

such as easements or mineral

rights. It is the most common form

of land ownership.


pg. 25

COMMUNITY PROPERTY &

SEPARATE PROPERTY:

In this state, property owned by

a married person may be

“community property,” owned

equally by both spouses, and

“separate property” which is

solely owned by either spouse.

The character of an individual

item is determined at the time it is

acquired and will not change

unless both spouses agree to the

change in writing, the marriage is

dissolved or separate property

becomes so “co-mingled” with

community property that it can no

longer be traced to its separate

source.

Separate property includes any

property owned before the

marriage, acquired by

one spouse during marriage by

gift or inheritance

Community Property includes

all property acquired during

marriage by either spouse or

both, except that which is

classified as separate property.

LIFE ESTATE:

A “life estate” is created by a

deed or other conveyance which

specifies that the estate will

continue only during the life of

some specified person, who may

be the grantee, the grantor, or

someone else. The estate that will

ripen into possession upon the

termination of a life estate may be

a “reversion” or a “remainder”.

Reversion is created when the

land will return “revert”, to the

grantor or his heirs upon the

end of the life estate.

Remainder is created when the

land will pass to someone other

than the grantor or his heirs

upon the termination of a life

estate.

TENANTS IN COMMON:

Multiple owners are “tenants in

common” unless the land is held

as community property in a joint

tenancy by partnership, or by a

personal representative or

trustee. Although all of the

owners’ interests undivided, they

need not be equal, and each

tenant in common may sell or

convey his interest or pass it

along to his heirs without the


pg. 26

consent of the other owners

(examples: marital community

who are divorced, two couples,

two corporations).

JOINT TENANCY WITH

RIGHT OF SURVIVORSHIP:

Occasionally, multiple owners

will want their individual interest

in a parcel of land to automatically

pass to the survivors upon death.

This form of ownership is called

“joint tenancy with right of

survivorship,” and must be

created in written instrument that

expressly declares that the

interest is a joint tenancy. Also,

the interests of all joint tenants

must be equal in four respects:

Time:

All of the interest must be

created simultaneously, in the

same document.

Title:

The legal title to the property

must be held in the names of all

of the joint tenants.

Right of Possession:

All of the tenants must have

equal rights to possession of the

land.

Ownership:

The percentage of ownership of

each joint tenant must be equal.

It is important that this consent be

disclosed by the public records

on the deed over the signature of

the grantees as follows:

“The grantees by signing

acceptance below, evidence

their intention to acquire said

premises as joint tenants with

the right of survivorship and not

as community property or

tenants in common”

STORY#2 –NON-BORROWINGSPOUSE

This one is another rush. Same

scenario – appointment made and

purchaser arrived just as closer

was printing loan documents

received moments before. Seller

had already come in to sign.

Purchasers were John and Mary

Smith husband and wife. Closer

prepared deed as such. When

the documents came in they all

said John Smith, a married man

as his sole and separate

property. Closer looked at

lenders instructions, nothing was


pg. 27

said. Normally in the case of the

non-borrowing spouse the closer

will have instructions that said to

prepare a quit claim deed from

the wife to the husband to

establish separate property. The

non-borrowing spouse would

typically have to acknowledge

the deed of trust and perhaps a

couple of other documents for the

lender. Closer called the lender

and questioned this and asked for

revised instructions. Lender (and

lender was not a local lender)

said they would not be revising

the instructions for the closer to

just close based on the

documents provided. Closer told

lender that the title company

would require a quit claim deed

from the wife. Lender told closer

they do these all the time and to

just proceed.

Property was in another county

and documents were sent to that

county to be recorded. Upon

receipt, Title Company called

and said they would need to have

the non-borrowing spouse

acknowledge the deed of trust.

Lender was contacted by the title

company and agreed to do this.

Purchasers had to come back into

the closing office to execute a

new deed of trust. Closing was

delayed….

When purchasers are husband

and wife and apply for a loan and

it is found out that one of the

parties does not have credit to

apply for this loan, many times the

lender will have the loan in just

the name of the one with the

better credit. Then the closer is

given instructions to prepare a

quit claim deed and excise tax

affidavit. The lender typically has

the non-borrowing spouse

execute the deed of trust and a

few other documents.

That seems to be the standard,

but we have seen other lenders

have different ways to handle this

same situation. Some work, some

don’t.


pg. 28

The following is a copy of the form we have the parties

sign at closing when we are instructed to prepare a quit

claim deed:


pg. 29


pg. 30

STORY # 3 – MISSINGDOCUMENTS

Of course, this was another rush!

Purchaser was getting a 1st and

2nd. The Closing Disclosure that

the lender sent to the closer

showed it was a “combined”

form. This meant it listed both the

1st and the 2nd on the form.

Documents were sent at 2:10

pm. An appointment was set

ahead of time assuming we would

get the documents early in the

morning to be ready for an

appointment outside the office at

3:00. Loan officer met the closer

at that location which was for the

convenience of the purchasers

because funding had to occur

tomorrow as the lock expired and

the seller would not sign a 4th

extension! Purchaser was

executing the documents and was

almost all done with she said she

was not seeing any documents on

the second note and trust deed.

Closer went through all the

documents and the instructions

again and agreed, there was a

mention of the principal amount

of second on the closing

disclosure as a credit to the

borrower, but no other

documents in the file. Loan officer

called her office who then called

the document drawer who said

there were two separate emails

sent to the closer. The set of the

first deed of trust were sent at 2:10

and the documents for the second

were sent at 2:25. Closer said as

she was getting the copies made

and getting ready to be on time

for the 3:00 appointment outside

the office she noticed another

email in from the document

drawer clicked on it and saw it

was the loan documents she

already downloaded. She did not

realize they were documents on

the second and apologized to the

clients.

Lender had the documents sent

to her and asked the agent (the

signing was at the agent’s office

as it was nearer to the purchaser’s

workplace) if she could use a

computer and then print the

documents that needed to be


pg. 31

signed. Documents were printed

and were signed by the

purchasers.

The transaction all closed on time-

everyone was happy.

Wow, that was a close call!

STORY #4 –

DO WE HAVE A BETTER-INFORMED CONSUMER?

The following is from the class I

wrote two years ago, and quoted

from the Consumer Financial

Protection Bureau:

“For more than 30 years, the

federal law has required all

lenders to provide two disclosure

forms to consumers when they

apply for a mortgage and two

additional short forms before

they close on the home loan.

These forms were developed by

different federal agencies under

the Truth in Lending Act (TILA)

and the Real Estate Settlement

Procedures Act (RESPA). To

help simplify matters and avoid

the confusing situations

consumers have often faced

when purchasing or refinancing a

home in the past, the Dodd-

Frank Act provided for the

creation of the Consumer

Financial Protection Bureau

(CFPB) and charged the bureau

with integrating the mortgage

loan disclosures under the TILA

and RESPA.”

It’s important to remember that

these changes are being done to

empower the consumer to make

the best financial decisions.

“The goal of these new forms is

to increase consumer

understanding. They didn’t think

consumers had a very good idea

of what they were getting into,

especially first-time


pg. 32

homebuyers. They don’t

understand the terms, they don’t

understand how a mortgage

works, how payments can

change. The CFPB really tried to

make the consumer aware of

what is going on. They want to

know that when a consumer sits

down to sign for a loan, they

understand all sides of that

loan.”

“It’s important to understand

that this new regulator’s (CFPB)

primary obligation and mission

is consumer protection.”

“It’s a very different reality with

them today than with regulators

of the past. It’s the right thing

and our industry is supportive of

it, we simply have to be aware

that the focus isn’t going to be

on the ease or facilitation of

industry operational concerns.

Accountability to consumers is

the singular lenses through which

all topics are viewed.”

So, here we are,

DO WE HAVE A BETTER-

INFORMED CONSUMER?

Yes, we do have a better-

informed consumer, especially if

they want to be better informed.

We still have the consumer that

doesn’t pay any attention to

anything sent by the lender. That

type of consumer didn’t pay

attention with the HUD-1

settlement nor will they pay

attention to TRID. Many times,

when the purchasers arrive at

closing, they don’t remember

reviewing any prior documents

(because they didn’t review

them) but, those are very few.

And, many times it depends on

how proactive the lender was

with the client from the

beginning.

Here is an example of a very

confused consumer because of

the lenders practices:

When I am in a signing

appointment, I always start with

the closing disclosure in front of

the purchasers and say here is the

closing disclosure that you should

have received at least 3 days ago,

from your lender of which you

would have reviewed and signed

it and sent back to the lender.


pg. 33

Normally, the purchasers look

at it and immediately say yes. In

this particular signing the

purchaser said, yes, I saw it and I

am very confused. The husband

had a file folder with him and

opened it and proceeded to toss

out on the table 6 different closing

disclosures that were sent to them

in a two-week period with

different bottom line amounts

needed to close. The amounts

ranged from differences between

$5.00 and $1,500.00, so I could

understand why they were so

confused. I looked at the oldest,

comparing it with the newest and

saw that the lenders title policy

was the “stand alone rate” being

the highest it could possibly be.

Also, the recording fees were

$300.00 when on the latest one

they were only $156.00. The

insurance was quoted as $900.00

and on the latest it was $499.00.

So, I brought all these differences

to their attention and explained

how the lender had to quote the

highest that the charges could

possibly be and each time they

were able to confirm a lower one

they did a new closing disclosure.

They said can you see why were

so confused. When someone

called to say how much money

would be needed by way of

cashier’s check or wire, they

were very excited because it was

the lowest amount quoted. But,

they were still prepared to bring

in more money because they

assumed someone would catch a

problem at the last minute. They

definitely were prepared for

change. Their real estate agent

was also at the signing

appointment and said she was not

aware of this until just last week

when the purchasers called and

said how confused they were and

reviewed these amounts over the

phone. She also explained that

she felt she was kept out of the

loop by the lender and the closer,

as she was never sent these

copies that were sent to her

purchasers. The closer

explained that she does not see

any of these closing disclosures

sent to the purchaser either, she

only gets the final closing

disclosure usually the day before

the signing or in many cases the

day of signing.

So, in this case, you could see

why we had such a confused

purchaser.


pg. 34

STORY #5DOES THIS ADD UP TOYOU?

Total due from borrower at

closing

$219,585.26

Total paid already by or on

behalf of borrower

$207,949.00

Cash to Close

$5,315.00

See attached copy of an

actual Closing Disclosure.

Would you be concerned?

Here is what happened:

Purchase and Sale Agreement

said seller will contribute

$5,500.00 towards purchases loan

costs. This amount was reviewed

with the loan officer as a pretty

close amount to what the costs

were. It was Friday, and the drop

dead date was Monday and the

seller would not sign a 2nd

extension. This had to fund and

record on Monday. Lender said

we would get loan documents

early in the day on Friday, but the

purchaser could only sign when

they got to town tomorrow at

noon. A week-end closing was

arranged. Seller came in Friday

at 3:00 to sign. In that signing

seller wanted to confirm the

purchasers were coming in

tomorrow at noon and that this

would fund on Monday. We told

her that is the plan, but we still

don’t have loan documents.

Loan documents arrived about

4:00 and the closer was trying to

balance the closing disclosure

that was provided – see next

page…. The numbers were not

balancing. It was way off. The

lender changed the seller credit

to the buyer to be only $1,475.05

which did not make sense at all.

Closer called the funder to talk

about the problems. Funder said

that we must use the figures that

were provided that they are

correct. Loan officer earlier in the

date told the purchasers to wire


pg. 35

approximately $9,000.00 and if it

was less, the closer could give

them a refund. Loan officer also

told the closer this was being

done and it was confirmed that

the wire for $9,000.00 was

received.

Closer told funder that the

bottom line numbers do not add

up, just to take a look at it and you

can see that they are off as it adds

up the purchaser bringing to

close $11,637.26 with the seller

credit reduced down to $1,475.05

Fund disagreed with closer. This

went on until about 6:00 then

funder went home and no more

emails came the closers way.

Loan officer emailed closer and

said a new Closing Disclosure

was sent and we are ready to sign

the purchasers at noon on

Saturday with a Monday

funding/recording.

Closer arrived at office 11:00 on

Saturday to this same Closing

Disclosure that said only a

$1,475.05 credit to the purchaser

from seller.

Closer had purchasers sign

everything, loan officer was at

closing and told the clients that

this would be adjusted at time of

funding???? Really???? The

closer was very uncomfortable.

Monday morning comes and

documents are scanned back to

lender. Another funder comes on

because the previous one is not

in. Lender wires funds and

releases recording based on

those numbers previously

supplied.

Closer knows there is a

problem. Seeks help from

manager who reviews entire file

one more time. Purchaser has to

bring more money in and was not

happy and complains to their loan

officer who tells purchaser that an

adjustment needs to still be made

– really, by who, the closer thinks.

Seller gets their money.

Tuesday comes and first thing in

the morning an email comes from

previous funder closer had so

many problems with and it says:

Did you cut a check to the seller;

we need to use the entire

$5,500.00 seller credit!!!! Closer

emailed back to funder, it closed

and funded on Monday!


pg. 36


pg. 37

ACES RISK MANAGEMENT SURVEY:

A report was recently issued that was derived from reviewing post-

closing quality control data from more than 60 lenders and covers more

than 50,000 loans.

1. TRID compliance violations were found in 90% of the loans

2. Most error identified in these reports were merely technical in

nature and not serious

3. But on the other hand, serious mortgage defects are rapidly rising

4. In this review, one key issue is the Closing Disclosure

5. A large number of defects are directly attributed to the creation of

the Closing Disclosure by lenders rather than settlement agents.

The current report that was done by Aces states that the lending industry

now understands the cause of the defects and they can implement

corrective action plans and then we will see more compliance defects to

trend downward once more.

There is a light at the end of the tunnel:


pg. 38

Quiz for “TRID UPDATES”1 October 3, 2016 was the date that the CFPB took over the settlement

industry.True False

2 CFPB means: Consumer Financial Protection Bureau True False

3 Consummation date is the date the purchasers applied for the loan. True False

4 TRID stands for: Tila Respa Internal Disclosure. True False

5 The transition from HUD-1 to TRID was such an easy process with nochanges.

True False

6 There are no new documents created due to TRID. True False

7 All lenders use “portals” to communicate securely with settlement. True False

8 “CD” is an acronym for the form called Closing Disclosure True False

9 Many times at the signing appointment the client will sign more thanone CD.

True False

10 Title premiums on the closing statements can be listed more than oneway.

True False

11 A special “formula” had to be created for title insurance premiums. True False

12 Most closings do not require an extension to be signed more thanonce.

True False

13 Settlement agents encourage same day signing/funding transaction. True False

14 The settlement agent can always correct the vesting at the time ofsigning.

True False

15 There is only one way a purchaser can take title to a property. True False

16 A non-borrowing spouse for purchase of primary residence signsnothing.

True False

17 If a borrower misses a signature on a document it can be signed afterfunding.

True False

18 Because of the CFPB, all consumers are better informed. True False

19 Purchasers have no problem with waiting 3 days after signing the CD. True False

20 Sellers paid costs are shown on the CD the same for all lenders. True False

I hereby attest that I have read the material and answered the questions.

______________________________________

Signature

________________

Date completed


pg. 39

Name/ Company:

_______________________________________________________________________________

Address:

_______________________________________________________________________________

City, State, Zip:

_______________________________________________________________________________

Phone:

(personal) ___________________________________(work)____________________________

Email:

_______________________________________________________________________________

License Renewal Date:

_______________________________________________________________________________

Signature: _____________________________________________________________________

Date: __________________________________________________________________________

1. What are 3 things that you learned from this course?

1. _________________________________________________________________________

2. _________________________________________________________________________

3. _________________________________________________________________________

2. Do you feel the clock hour material was easy to follow?

________________________________________________________________________________

3. Did the material give you information to help you in your profession?

________________________________________________________________________________

4. Will the material help you with future transactions?

________________________________________________________________________________

5. Why did you choose to take this course? Topic ___ Time ___ Cost___ Ease ___ Other__

6. How long did this class take you to complete? ______________________ (a “clock hour” is

50 minute)

How will you pay for this correspondence class?

_____cash _____check ______debit/credit information needed:

Card number_______________________________exp date_______

3 digits on back______ zip code of where bill is mailed_______

Mandatory Evaluation for TRID

UPDATES

Please fill out the following form and

return with your completed clock hour

class quiz.

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