10 Common (and specific) TRID findings
Here are 10 things your post-closing team should be checking up on
A lot of people hide behind technical language when talking compliance ... one thing we try to do at SCA is tell it like it is. And at the risk of allegations that I'm posting Buzzfeed-like "Click-bait" (people LOVE top 10 lists), here are some common findings in our early days of compliance file review on TRID.
1.LE and CD Don't Match (Standard vs Alternate Forms)
You're aware there is both a Standard and an Alternate version of both the LE and CD? Well, be careful to match the CD to the LE ... you shouldn't use an Alternate CD if you already disclosed a Standard CD. Why? Because the calculating cash to close table won't make any sense!
See the difference?
Standard Version:
Alternate Version:
2. Homeowner's Association Dues not populating
Where there is a condo, there will be condo fees. We often see errors with this carrying over to page 1 correctly. Even where the dollar figure is correctly included, there also has to be a description of "Homeowner's Association Fees" next to Other as shown here:
3. Inaccurate "Contact Information"
Almost every loan has SOMETHING wrong in this section. Do attorneys have license numbers? Yes! Do we need to fill in the real estate broker's e-mail? Yes! What about the individual broker involved? Yes! ...do you see a trend? Someone should be QC'ing these - these are easy to fix.
4. Seller's CD Does Not Match Bank's CD
I can't explain why it's happening, but a quick comparison between the Seller's and Bank's CD will uncover errors on both sides. The "File #" is very often different, but we find differences in spelling, property addresses, and consumer names. Hey, it can only be one or the other! It can't be both Trinkle Road and Trinkle Lane.
5. Seller CD Missing
Often (okay always) the Seller's CD has something wrong with it. But the bigger problem for lenders is where the Seller's CD isn't in the file at all! Remember this should be delivered to the seller at closing by the attorney, and the lender needs to keep a copy for its files.
And NO, the HUD-1 or ALTA Settlement Statement cannot be used instead.
6. Recording Fees Not Lumped Together
It's hard to accept, but only the Deed and Mortgage recording fees will be itemized on the CD. All other recording fees should be lumped into the same line (E01). And yes, this means that borrowers who actually read the disclosure will think that we added the Deed and Mortgage incorrectly.
7. Missing Parties Receiving Payment on Closing Disclosure
The party receiving payment for various fees needs to be disclosed in many cases on the CD. For example, all fees in Sections B., C., and H. should show the party receiving payment. We're seeing plenty of loans where those parties are incorrect or missing altogether.
8. No Proof that Borrowers Received Closing Disclosure Separately
Just like rescission, all consumers (for a refinance of a primary residence), will need to receive the CD separately. E-Sign systems seem to be handling this quite well. But how do you demonstrate this when borrowers sign the CD in person? We're seeing too many CDs signed by both parties that leave us with no proof that the borrowers separately received the CDs as required.
9. "Date Issued" Not Updated
When a revised CD is delivered, the "Date Issued" needs to be updated. Further, if your attorney delivers the final CD to closing, the Date Issued should be the closing date (not the day before when you printed off the CD to give to the attorney).
10. Fee Descriptions Don't Match LE to CD
If you call it a "Closing Fee" on the Loan Estimate, you're not supposed to call it a "Settlement Fee" on the Closing Disclosure.
In Other News:
CFPB enforcement actions keep increasing (which we all expected) - almost doubling in 2015
Boston welcomes General Electric!
When it comes to municipal deposits, are you on the credit union side (article here), or the bank side (article here)? The B&T has both sides of the issue covered. (subscription required)
Interesting article from National Mortgage News talking generally about vendor management from the mortgage banker's perspective.
Does your company's values align with your own? Consider this example from Peter Drucker's book "Managing Oneself":
[W]hether, a pharmaceutical company tries to obtain results by making constant, small improvements or by achieving occasional, highly expensive, and risky "breakthroughs" is not primarily an economic question. The results of either strategy may be pretty much the same. At bottom, there is a conflict between a value system that sees the company's contribution in terms of helping physicians do better what they already do and a value system that is oriented toward making scientific discoveries.
"To be trusted is a greater compliment than being loved."
- George MacDonald
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.**