Regardless of which set of disclosures the creditor chooses to providethe Loan Estimate and Closing Disclosure or, alternatively, the GFE, HUD-1, and TIL disclosuresthe creditor must comply with all applicable disclosure requirements pertaining to those disclosures. No. What do you mean by a changed circumstance? General lender credits also include premiums in the form of cash that a creditor provides to a consumer in exchange for specific acts or as an incentive. If the exact amount of the costs is not known, the creditor must estimate the costs based on the best information reasonably available to the creditor at the time that it provides the Loan Estimate to the consumer. Yes. For the Closing Disclosure, they are H-25(A) and (H) through (J), and H-28 (F) and (J). In such cases, the absorption of the cost or charge would not offset an amount paid by the consumer. A changed circumstance affecting settlement charges, including: An extraordinary event beyond the control of any interested party or other unexpected event specific to the consumer or transaction. WebIt depends on whether you have established a valid changed circumstance and done so within the time frame allowed for a revised Closing Disclosure (see comments below). 4. In that example, if the consumer consummates the mortgage loan on September 20th, interest starts to accrue on September 20th and at consummation the consumer will typically prepay interest for the 11-day period through the end of September, and that amount must be disclosed under 1026.38(g)(2) as a positive number. hb``e``2d uT, bP)q+q?pAfaH T For more information on high cost mortgages, see Regulation Z, 12 CFR 1026.31, .32, and .34. For purposes of the TRID rule, a changed circumstance includes, among other situations, an extraordinary event beyond the control of any interested party, and the Commentary to the TRID rule indicates that a war or natural disaster is an example of such an extraordinary event. Changed Circumstance Reasons WebAn X in the column indicates that the information may be changed due to the outlined changed circumstance. Payments of mortgage insurance are the total the consumer will pay towards mortgage insurance or any functional equivalent and includes amounts for prepaid or escrowed mortgage insurance. What if a creditor needs to collect additional information (other than the six pieces of information that constitute an application for purposes of the TRID Rule) or verifying documents to process a pre-approval or pre-qualification request? WebFor example, the appraisal was ordered for a single family residence per information provided by the borrower, however when the appraiser visited the property, its actually a condominium and thus a different schedule of appraisal fees applies. 12 CFR 1026.38(d)(1)(i)(D). For the Closing Disclosure, they are H-25(B) through (G) and H-28(G) and (H). What is the difference between a specific lender credit and a general lender credit? A change of circumstances refers to the showing required by a party seeking to modify a prior child support, spousal support, or custody order. The commentary explains that a changed circumstance may also be information specific to the consumer or transaction that the creditor relied upon when providing a Loan Estimate and that was inaccurate or changed after the LE was provided. 5 What is a changed circumstance under Regulation Z? 12 CFR 1026.19(e)(3). Yes. 10 0 obj <> endobj The regulators assume It depends. www.consumercomplianceoutlook.org/2011/first-quarter/mortgage-disclosure-improvement-act/. For example, assuming that the interest rate for the transaction being disclosed is four percent, the creditor could claim the safe harbor by disclosing 4.00% (consistent with the model form) although it also could disclose 4% (consistent with the regulatory text and commentary). Comments 17(c)(1)-19, 19(e)(3)(i)-5, 37(g)(6)(ii)-1, and 38(h)(3)-1. Change of Circumstances or Good Cause Required to Revisit However, even if covered by the TRID Rule, housing assistance loan creditors may opt to meet the criteria for one of two partial exemptions from the requirement to provide the Loan Estimate and Closing Disclosure. 12 CFR 1026.37(d)(1)(i)(D) and 1026.37(g)(6)(ii). For discussion of which disclosures are required, see TRID Housing Assistance Loans Question 4. X=Apo o 4 5. In the example above, if the consumer instead consummates the mortgage loan on October 4th but the first scheduled periodic payment is due on November 1st and will cover interest accrued in the preceding month of October, then at consummation the creditor will typically credit the consumer for the preceding 3 days in October to offset some of that first scheduled periodic payment. 15 U.S.C. 1. Prepaid interest under 1026.38(g)(2) is typically disclosed as a positive number when interest is due at consummation for the period of time before interest begins to accrue for the first scheduled periodic payment. Comment 19(e)(3)(i)-5. endstream endobj 15 0 obj <>stream RESPA Integrated Disclosure Rule Frequently Asked Questions ss?=j 1j'cJo^s} 0Q0=PPY@|cimEEK;?%5w66mEJV4OFH^(^gt4-9!>\r\ t>_WZ;/Qm~1Euv[OSWK?uK w Yes. Is a change in loan amount a changed circumstance? Comment 38(o)(1)-1. The total of all general and specific lender credits is disclosed as a negative number, and labeled as Lender Credits in Section J: Total Closing Costs on page 2 of the Loan Estimate. Regardless of which disclosures the creditor chooses to provide, the creditor must comply with all Regulation Z requirements pertaining to those disclosures. For more information on the six pieces of information that constitute an application for purposes of the TRID Rule, see TRID Providing Loan Estimates to Consumers Question 1.