Two issues we're seeing with NH loans and TRID: title insurance and trade-off tables.
There's so much confusion out there over new regulations. Here, we are just trying to quiet that down and help you survive the governmental winds of change.
There's so much confusion out there over new regulations. Here we are just trying to quiet that down and help you survive the governmental winds of change.
With fewer lenders doing business in only one state, it's increasingly important to understand the different issues in different states. Since we've looked at Massachusetts a couple of times lately, how about New Hampshire today?
Since new Federal laws will always force changes at the state level - let's look at a couple of issues that might pop up on your New Hampshire loans because of the new TRID (ahem - Know Before You Owe) Rule.
Two Issues
So the two issues we see on NH loans because of TRID are this:
How to handle title insurance if you're closing the list down in other states. Can you close this down as well? Or did you hear something about a NH law that gives borrowers the right to choose title insurance?
What about those pesky GFE tradeoff tables required by NH law? Now that there is no more LE, are the tradeoff tables still required?
Let's jump in!
#1) Title Insurance
So, you are not crazy - there is a law in New Hampshire that gives borrowers the right to choose title insurance. Here it is:
417: 4 (XVI) Coercion in Requiring Insurance
(a) No creditor or lender engaged in the business of financing the purchase of real or personal property or of lending money on the security of real or personal property may require, as a condition to such financing or lending,... that the purchaser or borrower ... shall negotiate through a particular insurance company ... any policy of insurance or renewal of a policy insuring such property.
But this is only talking about Owner's Title Insurance - a lender is still
permitted to select the provider of Lender's Title Insurance. So if you want to "close" the list for title insurance in New Hampshire (which many lenders consider beneficial for a number of reasons, not in small part because of TRID), you're allowed to do that. In that case, you'd disclose the title fees in Section B. of the Loan Estimate.
Of course, nothing's stopping you from giving borrowers the right to shop anyway, in which case you'd need an SSPL to accompany the LE and you would disclose the title fees in Section C. of the LE.
#2) Tables
Currently, there's a NH law (NH RSA 397A-15, IX) that requires originators to complete the GFE Tradeoff table whenever they're not the party that is funding the loan. (So this would apply to table-funders ... not to traditional lenders).
Of course, the GFE is being replaced by a new Loan Estimate. The NH law doesn't show any flexibility here, but neither does TRID - which prohibits us from making nearly any changes to the LE's format (such as to add a tradeoff table). What can we do - not provide the tradeoff table? Prepare a tradeoff table to attach as an addendum?
Good news. The answer is to not disclose the tradeoff table at all. The tradeoff tables are gone. Apparently, people are anticipating a legislative proposal in 2016 to clarify the language of the current law to make this crystal clear.
In Other News:
Like to see a company standing up for something - did you see REI is closing on Black Friday and giving employees a paid vacation day? But don't think there isn't some profit analysis behind this - interesting to hear the CEO comment "that it's more valuable for REI to bring in new, passionate members than to compete for holiday bargain hunters."
"Did you get a haircut? No, I got them all cut." ... dad jokes continue
By now I'm sure you've heard of the Massachusetts Solar Loan Program - but have you seen the gigantic solar farm they're building in Morocco? It will be bigger than its capital city! .. meaning 50% of the country's energy will come from renewable resources by 2020. (A pretty big deal for a country currently importing a massive amount of oil).
Like arbitration or not, the CFPB's about to make some changes in this area - here's an interesting take on the CFPB's plans in this arena.
Looking for more help with TRID? Join us next Thursday out in Worcester for a two-part MMBA event to help -- a morning session to help with any last minute issues related to preparing Closing Disclosures, and an afternoon session to work through issues related to Construction Loans. Here's the information if you haven't heard already.
In his book, How to Argue and Win Every Time, Gerry Spence essentially (in my opinion) makes the argument that, "winning" an argument sometimes means not having the argument at all. The book has an entire chapter devoted to Arguing with Kids, here is a passage that you might like:
Arguing is the process by which we achieve what we want from the engagement. What is it that we want from the arguments we have with our children? Do we want to merely win, that is, to force the child to succumb?
Do we want them to mind us, to bow to our power, to do as we say, when we say it? Do we want our reasoning to be so beautiful and unimpeachable that the child withers in its presence? Do we want the child to mimic our ideas, our beliefs, our tastes, our goals? Do we want the child to be a miniature of us, a mere poor copy? Do we want the child to respond like a servant, a slave, so that our desire is their duty? .... Before we can determine what argument to make we must determine
what we want. ...
We want them to be successful as human beings. We want them to excel in the art of being persons--to live with joy, to grow, and to become who they are--to fulfill themselves.
To freely bloom
--that is my definition of success.
We are, of course, concerned that our children not run afoul of the law. That is the universal concern of society. I am saddened as I watch the oldsters facing, fearing, shuddering at the spectacle of the monsters they have created out of the fabric of their own hatred and rejection. It is like a sadistic man who locks his dog in a cage after which he pokes sticks through the bars--pokes, and prods, and causes the helpless dog to howl in pain. Not satisfied with his torture, the owner then starves the dog, and throws a dark cloth over the poor dog's cage so that no light shines through. One day the dog is freed. The owner now holds out his hand, claiming that the master should be loved and respected for having provided food and shelter for the dog. But the ungrateful dog bites him, and in punishment, the dog is put into an even smaller cage where he is whipped and beaten even further. Little wonder that the dog would, when again released, now attack. Can we remember when the dog was a puppy and would lick our faces?
I think we ought not be as concerned with our children violating the law as with ourselves violating our children. We want our children to be law- abiding, to be sure. But assaulting our children with fear--fear of rejection, fear of punishment, fear of reprisals, fear of criticism, and fear of banishment--is an assault upon the child that will be returned in kind. On the other hand, we cannot bribe our children to be good. "If you are a good boy you can go to the show." Later, "If you are good you can have a new car." Goodness becomes associated not with goodness but with material reward, and that is not goodness. Children ought not learn about bribery as such an early age.
"The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function."
- F. Scott Fitzgerald
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**These are our opinions. We're not authorized, or willing, to express those of others.**