How to deliver the Closing Disclosures to borrowers who don't have e-mail
"No, I don't have access to a computer." "I don't want my private information sent out over the interweb." How do we handle these borrowers with TRID?
If you're delivering the Closing Disclosure (CD) electronically, that's great! You won't have to wait the extra 3 mailing days before you close a loan under TRID. (Just make sure you comply with E-Sign, which I'm sure your system will take care of pretty easily).
Problem = No E-Disclosure
But what happens when you have a borrower that doesn't have email, or won't give it to you? How do we get the CD to the borrower as soon as possible- are we just stuck with waiting those extra 3 days?
Here are your other options:
Regular Mail
First, you can just send the CD regular mail. After the 3 days under the "mailbox rule," it's presumed that the borrower received it, and the 3-day TRID waiting period begins. Of course, we all cringe because that's adding an extra 3 days to the already scary long process of closing a loan post-August 1, 2015.
In Person
Of course you could also deliver it to them in person. But is this realistic? It's probably not cost-effective to have loan officers driving all over the place delivering disclosures. And I'm not sure that forcing borrowers to come in to sign another round of disclosures is going to help earn you top marks in the JD Power Mortgage Origination survey in Customer Satisfaction.
Overnight Mail
The third option- the main point of this newsletter- what if you overnight it? Remember, technically, you don't need to wait the full 3 days for the "mailbox rule" if you can prove the borrower received it sooner.
Here's what the official comment says on this (1026.19(e)(1)(iv)-1):
Mail delivery. [TRID] provides that, if [the Loan Estimate is] not provided to the consumer in person, the consumer is considered to have received the disclosures three business days after they are delivered or placed in the mail. (*this is the mailbox rule) The creditor, may, alternatively, rely on evidence that the consumer received the disclosures earlier than three business days. For example, if the creditor sends the disclosures via overnight mail on Monday, and the consumer signs for receipt of the overnight delivery on Tuesday, the creditor could demonstrate that the disclosures were received on Tuesday.
But let's hit the brakes.
While this sounds pretty good ("hey, we're down to 1 day instead of 3!"), there are some concerns.
First of all, remember that every borrower with a right to rescind needs to separately receive the CD. That basically means that on refinances (assuming a principal dwelling, not second home), every borrower with a security interest in the property (on the deed), even if not on the mortgage, needs to receive a copy of the CD 3 days before closing. So you have to deliver the CD to someone who may not be as involved with the mortgage process as the borrower. You see this come up when you have a husband and wife refinancing their home- one has bad credit and is not on the mortgage- but both are on the deed. Or you have a parent living in Florida who owns the home with the borrower, but is not liable on the mortgage.
Note: In non-rescindable transaction (e.g. all purchases), any co- borrower needs to receive the CD to start the 3-day TRID clock.
Second- notice the CFPB's example assumes the consumer will sign for the overnight package. That makes delivery a lot more difficult. Does UPS always deliver at night? What if one or both of the consumers is working? Do you try to send it to their work address? The problem is that this looks like you can't just overnight it and use the proof of delivery as the proof of receipt (so that they can't just leave it at the house during the day and assume they got it when they arrived home that night).
And that's not to note the cost of overnighting these disclosures all the time.
So that's not to say it's impossible, but if you're going down this road, just wanted you to beware of a few speed bumps.
Whatever you take away from this, I think we can all agree that coaching loan officers to encourage more borrowers to go through the mortgage process with electronic disclosures makes this process a whole heck of a lot easier. It will go a long way towards our retaining our sanity if loan officers can let them know- at the beginning- "Hey, you don't have to do this electronically, but I'm telling you right now it's going to be a faster process. Expect it to take longer to close if you insist on regular mail."
**Special Note on Pre-Approvals**
So we finally received public, semi-official, guidance from the CFPB on the pre- approval issue. For once it's good news ... we finally got them to come out and confirm that we do not need to deliver a Loan Estimate prior to gathering the verifying docs necessary to underwrite a pre-approval. Of course, this came only a few minutes after we wrote a newsletter taking the more conservative approach on this issue (Murphy's law), which we felt forced to do because of the lack of guidance up to that point. For anyone interested in more information, please feel free to call or e-mail myself and I can explain this in full and point you in the right direction to the supporting material--it was from a Federal Reserve webinar on Monday the 26th.
In other news:
Looks like the MMBA's second TRID seminar is coming upon the 26th ... the first was very well received, so keep an eye peeled for the invite to this one (beats going to DC or Florida to learn about the systems you pay for)
Hey I guess I can put up with the TSA if they're keeping us all safe ... wait, what? TSA failed 95% of recent tests, with secret agents getting through security with fake weapons and bombs. Yikes.
Are you shooting for growth or profitability? Here's an interesting spin on this from the HBR.
The CFPB is getting Provident Funding for fair lending violations- over a span of years, statistics show that Provident charges, on average, in the range of $600-800 more to minority borrowers in broker fees
What's important to you? Do you have time to reflect on your personal values, goals, beliefs? If you don't- there's a risk your life will unfold accidentally- more affected by momentum and happenstance than by deliberate efforts. Someone might randomly ask you to join a charity that changes your life. But you're much more likely to find this opportunity if you're actively looking for it. They say more people create their dream jobs rather than just fall into it.
One tool that people apparently use for self-reflection is the so-called wheel of life. Here's an example I found online. Basically, the idea is to look at different things that a happy/successful life may include, and try to judge how well you're doing in each area. Everyone is different, so 50% in one area may be enough for one person to consider their time here a success, while another might not be happy with less than 100%. There may be trade-offs - you may be less happy with friends/family as a trade-off for being more happy with your career. Not sure what the different parts are that you should look at? Here is one list:
Fitness and health
Wealth and money
Fun and recreation
Personal and spiritual growth
Love
Physical environment and home
Lifestyle and possessions
Career
Friends and family
Creativity and self-expression
"I have to constantly juggle being a writer with being a wife and mother. It's a matter of putting two different things first, simultaneously."
- Madeleine L'Engle
Thanks so much for reading our weekly newsletters. We're not always going to be perfect, but because we always do our best and try not to overpromise, we hope that we're always going to be trustworthy. Your calls and e-mails are very helpful - please keep contributing.
**These are our opinions. We're not authorized, or willing, to express those of others.**