CFPB Issues TRID Update: Clarifies Loan Rate Lock Concerns

The Consumer Financial Protection Bureau “CFPB” announced an update to the TILA-RESPA regulatory implementation materials today (3/19/2015) which modified the 2013 TILA-RESPA Final Rule.

The update to the TRID rule extends the timing requirement for revised disclosures when consumers lock a rate or extend a rate lock after the Loan Estimate is provided and permits certain language related to construction loans for transactions involving new construction on the Loan Estimate.

Section 8.7: May a creditor use a revised Loan Estimate if the rate is locked after the initial Loan Estimate is provided? (§ 1026.19(e)(3)(iv)(D))

Yes. If the interest rate for the loan was not locked when the Loan Estimate was provided and, upon being locked at some later time, the interest rate as well as points or lender credits for the mortgage loan may change. The creditor is required to provide a revised Loan Estimate no later than three business days after the date the interest rate is locked, and may use the revised Loan Estimate to compare to points and lender credits charged.

The revised Loan Estimate must reflect the revised interest rate as well as any revisions to the points disclosed on the Loan Estimate pursuant to § 1026.37(f)(1), lender credits, and any other interest rate dependent charges and terms that have changed due to the new interest rate. (§ 1026.19(e)(3)(iv)(D); Comment 19(e)(3)(iv)(D)-1)

Additionally, the Bureau is making non-substantive corrections, including citation and cross-reference updates and wording changes for clarification purposes, to various provisions of Regulations X and Z as amended or adopted by the 2013 TILA-RESPA Final Rule. Because this rule also amends the 2013 Loan Originator Final Rule to provide for placement of the Nationwide Mortgage Licensing System and Registry ID (NMLSR ID) on the integrated disclosures, we’ve also updated the Loan Originator Rule Small Entity Compliance Guide.

Section 5.6 Page 3: Additional information about the loan
Page 3 of the Loan Estimate contains Contact information, a Comparisons table, an Other Considerations table, and, if desired, a Signature Statement for the consumer to sign to acknowledge receipt. (See § 1026.37(k), (l), (m), and (n)).

In transactions involving new construction, this page may include a clear and conspicuous statement that the creditor may issue a revised disclosure any time prior to 60 days before consummation, pursuant to § 1026.19(e)(3)(iv)(F) if the creditor reasonably expects that settlement will occur more than 60 days after the provision of the initial Loan Estimate