What Has and Hasn't Changed? TRID's Effect on the Process of Mortgage Lending Vermont Mortgage Bankers Conference: October 13, 2016 Presented by: Carrie B. Cote Underwriting Counsel

Are we on Change BLVD or Same Old ST? Today's presentation is going to focus on some key areas of the mortgage lending process that have changed since TRID. We will also review some other aspects of Mortgage lending that despite there being no change with the implementation of TRID, continue to pose challenges to the closing process.

Some areas of focus Creditor responsibilities and Creditor expectations Information gathering and sharing Settlement agent responsibilities Consumer privacy Buyer and Seller CD separate or combined? Electronic delivery and what it means for meeting regulatory timeframes

Creditor Responsibilities Accuracy and Delivery of LE The creditor is responsible for the accuracy as well as the delivery of the Loan Estimate (the initial as well as any revised Loan Estimates). Accuracy and Delivery of the CD The creditor is responsible for the accuracy as well as the delivery the Closing Disclosure (the initial as well as any corrected Closing Disclosures).

Information Exchange Information gathering- Close collaboration between lenders and settlement agents is increasingly important to getting a transaction to the closing table. Determining who is responsible and how the information will be shared Understanding that settlement agents work with many lenders, your way needs to be clearly communicated, upfront and often to ensure a smooth and timely closing.

Obvious? or Oblivious? Err on the side of Caution and state the Obvious! Every file, Every time! Title fees, Settlement Agent name and file number Explaining Tolerance Violations and Reimbursements: REMEMBER: Did Not Shop = required use by creditor Did Not Shop= chosen from creditor's Written List of Providers Shopped= allowed to shop and borrower chooses a service provider NOT on the List Don't Delay the closing, unless: Change in loan product APR becomes inaccurate under MDIA rules A prepayment penalty is added

Settlement Agent Responsibilities Providing the CD to the seller- § 1026.19(f)(4) establishes that the settlement agent is responsible for providing a Closing Disclosure to the seller. The creditor continues to be responsible for the accuracy and delivery of the Closing Disclosure to mortgage borrowers. .

Settlement Agent Responsibilities Providing the CD to the borrower: if a settlement agent is delegated-they are responsible! § 1026.19(f)(1) states that it is the creditor's responsibility for the accuracy and delivery of the CD to the mortgage borrower, but states that the creditor may arrange for the settlement agent to do so on its behalf. If the settlement agent agrees to provide the Closing Disclosure to the borrower, the settlement agent must do so in accordance with the requirements of the rule. Lenders must check and double check as this does not absolve you from your liability.

REMEMBER: These penalties do not go away, just because you have shifted the task of preparing or delivering the CD to the settlement agent. $5000.00 per day for failure to follow the laws or regulations $25,000.00 per day for gross negligence $1,000,000.00 per day for a knowing violation.

Consumer Privacy The rule did not change consumer privacy protections under Gramm Leach Bliley (1999) The CD contains more information than before and therefore has received greater protection

What is the CD going to look like? In a purchase transaction will the CD be separate or combined? The TRID rule permits the creditor to separate the disclosure of the buyer and seller information. The creditor decides whether these documents should be separated per their privacy policy. Some information must be provided to both the buyer and the seller. For, example- Real Estate commissions. Lets take a look at how some of these sections may be separated!

Keep them Separated! The information required to be disclosed on the Buyer's side of page 2 of the CD can be left blank on the Seller's CD, but the fees disclosed on the Seller's side of the CD on Page 2 must also show on the Buyer's CD.

CD Separation cont…. On Page 3 of the CD, the information required to be disclosed under the "Summaries of Transactions" may be disclosed on separate pages for buyer and seller

Electronic Delivery TRID did not change the general requirements for establishing when delivery has been made using electronic methods. Generally, the E-Sign Act (passed 6/30/99) allows the use of electronic records to satisfy any statute, regulation, or rule of law that requires information be provided in writing, if the consumer has affirmatively consented to the use of electronic delivery methods and has not withdrawn such consent. .

Electronic Delivery TRID allows in-person delivery and also relies on the longstanding "mailbox" rule which creates a presumption that a consumer has received a disclosure three business days after that disclosure was delivered or placed in the mail. Regardless of how the delivery is made, whether in-person, regular mail, overnight mail, electronic delivery, or otherwise, if there is sufficient evidence that the consumer received the document then actual receipt has been established and the utilization of presumed receipt is unnecessary. Assuming compliance with E-Sign, the “mailbox rule” and its three business day presumption of delivery applies to email delivery.

Final Thoughts and Questions