On June 9, 2020, the Consumer Financial Protection Bureau (“CFPB”) released a compliance aid Factsheet and updated Frequently Asked Questions (“FAQs”) related to the TILA-RESPA Integrated Disclosure (“TRID”) rule.
The TRID Title Insurance Factsheet discusses the differences between lender’s title insurance and owners’ title insurance and how each should be disclosed on the Loan Estimate (“LE”) and Closing Disclosure (“CD”). Additionally, the factsheet provides guidance on how to disclose a “single” rate versus a “simultaneous” rate which is when a consumer purchases both lender’s and owner’s title insurance from the same company for a single premium.
When the consumer obtains a simultaneous rate, the full cost of the lender’s premium must be calculated and disclosed. The factsheet provides examples of how to calculate both the lender’s title insurance premium and the owner’s title insurance premium from a simultaneous rate, including when disclosure of a negative owner’s title insurance cost would be appropriate.
The updated FAQs cover topics which highlight sections of the TRID, without providing a new interpretation of the rule or related commentary. The first new FAQ details how to calculate the Total of Payments for the CD, and that it must include any negative prepaid interest amount.
DocMagic, by default, considers negative prepaid interest in our Total Interest Percentage calculation and in all related calculations such as Total of Payments, finance charge and APR. Optional settings are available upon request to (i.) consider negative prepaid interest in calculating total interest and total payments only; (ii.) exclude negative prepaid interest from pre-term APR; (iii.) exclude negative prepaid interest from APR and also put negative fees into non-prepaid charges instead of pre-paid fees; and (iv.) include negative prepaid interest for total of payments and total interest percentage calculation but not pre-term APR.
Another FAQ covers when a signature can be optional on the LE and CD, noting the TRID rule provides creditors the option to include a line for consumer signatures to acknowledge receipt. The FAQ states that a creditor may only include a signature line on the LE or CD if the consumer receives the disclosure in a form that they may keep.
DocMagic provides the option to remove consumer signature lines from the LE and CD, which then adds Loan Acceptance language on the disclosure which states “you do not have to accept this loan because you have received this form or signed a loan application.” Additionally, a second copy of the LE or CD can be added to packages upon request. Please contact DocMagic's Customer Service for assistance.
A third new FAQ advises that if separate closing disclosures are provided to a consumer and seller, the consumer’s CD must disclose seller-paid Loan Costs and Other Costs on page 2.
If you have any questions, please contact DocMagic's Compliance Department.
