TRID has been in effect for nearly four months, and lenders are still adjusting to the new rules. Though title companies like Champion Title have been helping lenders meet TRID requirements for months, many lenders have not been so fortunate. TRID violations have occurred, and all the violations have been completely avoidable. Today we’ll look at five common TRID violations identified by two attorneys, one of whom used to work for the CFPB.
1. Issue Dates for the Loan Estimate and Closing Disclosure
A common violation that’s been plaguing lenders has to do with the issue date on the Loan Estimate and Closing Disclosure. Many lenders are producing Loan Estimates and Closing Disclosure forms with the same issue date, and this is a clear violation of TRID’s new required timelines.
2. Not Providing the Seller’s CD
CFPB regulations require the settlement agent to provide a closing disclosure to the seller. He or she must also provide the lender with a copy if the borrower and seller information is on a separate form. Unfortunately, many lenders have reported that the settlement agents they work with are failing to provide the seller’s Closing Disclosure, or provide inappropriate forms, like the HUD-1 or ALTA Settlement Statement. These forms cannot replace the Closing Disclosure.
3. Optional Designation
Many violations are occurring because the ‘optional’ designation is not being used correctly. Often, it is not being included for separate insurance, guarantee, warranty, or event-coverage products listed in the “Other” category, like credit life insurance, debt cancellation coverage, home warranties, and optional owner’s title insurance.
4. Fee Names
Fee names must be the same on the Loan Estimate and the Closing Disclosure. Settlement agents may only use their own fee names when they are listed as the title company and/or when key circumstances have changed.
5. Incorrect Contact Information
Lastly, omissions and formatting errors in applicable contact information have caused numerous TRID violations. Real estate and/or brokers’ license numbers must be included. If the particular contact is not licensed or not required to have a license, the space for the License ID may be left blank.
Compliance, Expediency, and Efficiency with Champion Title
Champion Title is a title agency that works with realtors in Washington, D.C., Maryland and Virginia to streamline closings, increase compliance, and reduce costs. For more information on our services, please visit our homepage or contact us today.