TILA-RESPA rules of the road
Recapping the new regulations
This article is part of HW PartnerDirect™. What is this?
Last week we introduced you to the Closing Call Blog, and we hope you have found it informative!
We have covered a myriad of the ruling’s components that define some of the operating parameters we are all going to have to get used to. The one thing this begins to define is “all the rules are changing” and this is getting complicated already!
TILA/RESPA Records Retention
- Can use electronic formats but not required
- CDF Forms – 5 years after consummation
- Loan Estimate Forms – 3 years after consummation
- Escrow Cancellation Notice – 2 years from notice
- Partial Payment Policy – 2 years from notice
If loan is sold
- Originator – same retention period applies
- Buyer – for the term remaining from origination
- Cannot use the Loan Estimate and Closing Disclosure until 08/01/15
- No Consumer fees before the loan Estimate
- Consumer can indicate “intent to proceed” in any manner, unless the creditor specifies one
- Cannot provide written costs to consumer before loan estimate without disclosing they may change
- Cannot require submission of documents verifying information prior to Loan Estimate
TILA-RESPA does not apply to:
- Reverse Mortgages
- Chattel Dwelling Loans
- Creditor who does less than 5 loans a year
- Cash Deals
- Partial Exemptions associated with Housing Assistance loans for low- and moderate-income consumers.
These rules have a major impact on the way we do business and without major changes in technology we could all have a very hard time keeping track of everything. The unwritten business impacts include:
- Proving what we say happens actually happened
- Providing information for audits without it costing a fortune
- Providing a high level of security
- Tracking of events and documentation of the process
- Pragmatic business application of the rules preventing errors
- New shopping approaches that may help
In any case, I think everyone can see the benefits of solid technical solutions that will minimize the impact.
This week, we will dive into the Loan Estimate disclosure. In addition to discussing the high level impacts it will have, we'll also be exploring the sections of the form and how that will change the way we do business.
We also invite you to visit the TilaRespa Knowledge Center, where we will continuously post knowledge articles and white papers. You can also participate in forums to join conversations with others in the industry.
All information and views expressed or implied are provided without warranty and are only the opinion of Pavaso, Inc. Each participant should seek legal representation for legal interpretation of the ruling and the CFPB directly for final instruction and interpretation. The final rule can be found here.