The CFPB recently updated its TILA-RESPA Integrated Disclosure (TRID) FAQs with guidance related to providing a Loan Estimate to consumers.
The first FAQ focuses on what triggers the requirement for a creditor to provide a Loan Estimate to a consumer. For loans subject to TRID, a creditor is responsible for ensuring that a Loan Estimate is delivered to a consumer or placed in the mail to the consumer no later than the third business day after receipt of the consumer’s “application.” 12 CFR §1026.19(e)(1)(iii).
For loans subject to TRID, the minimum information required to constitute the submission of an “application” is:
- The consumer’s name;
- The consumer’s income;
- The consumer’s social security number to obtain a credit report;
- The property address;
- An estimate of the value of the property; and
- The mortgage loan amount sought.
12 CFR 1026.2(a)(3)(ii).
A key part of the definition for an application includes “submission” of the six pieces of consumer information. The requirement to provide a Loan Estimate is not triggered by a creditor maintaining consumer information from a previous transaction or by information entered into an online application, but not submitted to the creditor.
The second and third FAQ confirm that creditors cannot require a consumer to provide more than the six pieces of information that constitute an application or verifying documents in order to receive a Loan Estimate. If the creditor represents that a Loan Estimate will not be provided without additional information, the CFPB could investigate the occurrence as a violation of the Dodd-Frank Act. 12 U.S.C §§ 5531, 5536.
The CFPB confirms in the fourth FAQ that if a consumer provides the six key pieces of information to a creditor, the requirement for a Loan Estimate is triggered, even if the consumer is not applying for a mortgage, e.g., obtaining a pre-approval or pre-qualification letter. The fifth FAQ states a creditor is not prohibited from requesting and collecting additional information, beyond the six key pieces of information needed to trigger a Loan Estimate. Creditors may request any needed verifying documentation but cannot condition provision of the Loan Estimate on the consumer submitting the additional information.
To view the TILA-RESPA Integrated Disclosure (TRID) FAQs, click here.
Please note, DocMagic will not make any changes related to the publication of the additional FAQs, as the guidance simply restates current TRID requirements.
