President & Managing Director
Lenders Compliance Group
This is the fourth article of a six-part
series devoted to TILA/RESPA Integration Disclosure. Although the series,
structured as White Papers, was initially established with four parts, I have
added a fifth and sixth part to discuss additional features of the Closing
Disclosure. In this article, I will take you through a review of Page One
and Page Two of the Closing Disclosure. In the fifth part, I will
discuss Page Three. The sixth and final part of the series will provide an
outline of Page Four and Page Five. Through a review of important highlights, I
invite you to join me in a deep dive into the intricate features of the Closing
Disclosure.
In the first article, I discussed
the mission of TILA-RESPA Integration and the Loan Estimate (LE).[i]
The second article introduced and treated the numerous features of the Closing
Disclosure (CD).[ii]
In the third article, I provided the salient features of the Loan Estimate, in
considerable detail.[iii]
The first two articles were accompanied by detailed tables to be used for
certain itemized categories and action requirements.
I would suggest that you read all
the articles in this series in order to better understand the TILA-RESPA
Integration Disclosure (TRID) rule promulgated by the Consumer Financial
Protection Bureau (CFPB).
One of the reasons I have written
this series is to cut through the information noise. My concern stems from the nearly
profiteering stance of the flourishing punditry to opine on TRID. This approach
to learning seems to have become the norm recently at conferences, conventions,
webinars, seminars, lectures, and pricey city-to-city forums. Indeed, also, people
with no real experience in directing regulatory compliance, though having some
training background, seem to hang out their TRID webinar shingle. I view the
latter as but shills for generating leads for their affiliated pundits.
I happen to think that TRID is
too important, being a generational change in disclosure, to hog the helpful information
about TRID by charging a fee just so somebody could attend and possibly learn
something about it. With that in mind, my firm recently established two
proactive paths to a TRID knowledgebase:
(1) We
established the TEAM TRID™ task force,[iv]
a relatively inexpensive, cost-effective way to get TRID integration
implementation done efficiently (viz., www.teamtrid.com); and importantly
(2) We
established TRIDHotline.com,[v]
an entirely free online service,
manned by our task force, to assist people with their questions about TRID. We
want to listen to their compliance needs (viz., www.tridhotline.com).
Hopefully, you will have read the
previous three articles. Now we will continue a detailed review of the new
disclosures, by providing this fourth article on the Closing Disclosure. As indicated
above, a fifth and sixth article will further elucidate the Closing Disclosure
analysis.
In focusing on the Closing Disclosure,
I will offer a perspective of its pertinent and critical highlights. As I have
stated throughout this series, I caution you to realize that this review is not
exhaustive or comprehensive, given that the TRID rule contains very complex disclosure
requirements, and there are on-going updates and interpretations involving its
implementation, some of which are borne of the CFPB’s own issuances as well as
the areas that may be subject to litigation.
Please consider my analysis carefully.
Follow along with a copy of the Closing Disclosure. I will provide, where
helpful, some information as Suggested
Guidance. Allow at least two hours to consider this explication.
And as I have admonished all along, make notes, raise questions, and seek answers
from competent compliance professionals!
There are five pages to the
Closing Disclosure. We will visit each of them, with particular interest in
understanding their key features. Although I will take the CD somewhat in
order, it should be noted that this method of explanation is not meant to
suggest that each Closing Disclosure contains five pages or that in all
instances the information described appears on that page in the same order. For
example, Regulation Z allows an alternative “Calculating Cash to Close” table
for transactions without sellers.[vi]
Page One
The first page of the Closing
Disclosure includes General Information, the Loan Terms table, the Projected
Payments table, and the Costs at Closing table. The CD begins with the title
“Closing Disclosure” and a form purpose statement, followed by three columns of
basic information headed “Closing Information,” “Transaction Information,” and
“Loan Information.”[vii]
The page then includes three tables: “Loan Terms,” Projected Payments,” and
“Costs at Closing.”[viii]
The text itself is required for federally related mortgage loans subject to
TILA-RESPA disclosure integration. Note should be taken that the model form is
for transactions subject to TILA only and not RESPA.
