TRID – Understanding the TILA-RESPA Integrated Disclosure (“TRID”) Volume 7

29 Jan

We will pass along a number of questions and clarifications of TRID every day for the next several days.

The information provided is for informational purposes only and should not be used or relied upon for any other purpose. This information is not intended nor should it be construed as providing legal advice. Tradition Title Agency does not guarantee, and assumes no responsibility for, the accuracy, timeliness, correctness, or completeness of the information. Always seek the advice of competent counsel with any questions you may have regarding any legal issue.

This is volume 7 – there was no Volume 6

FHA Publishes FAQ on Allowable Changes to Settlement Agent Certification Due to TRID The Federal Housing Administration (FHA) recently published new FAQs in its Single-Family Handbook. Question 374 addresses allowable changes settlement agents can make to the new settlement agent certification which replaces the current addendum to the HUD-1. FHA released its new certification earlier this summer, stating:

To the best of my knowledge, the Closing Disclosure which I have prepared is a true and accurate account of the funds which were (i) received, or (ii) paid outside closing, and the funds received have been or will be disbursed by the undersigned as part of the settlement of this transaction. I further certify that I have obtained the above certifications which were executed by the borrower(s) and seller(s) as indicated. (Emphasis added.)

As most lenders have decided to prepare the Closing Disclosure, the certification creates possible instances in which settlement agents could be falsely signing the certification or delaying transactions for the FHA’s low income and first-time homebuyers. In the FHA’s FAQ 374, it advises that settlement agents could simply delete or cross out the “which I have prepared” language in instances in which settlement agents did not prepare the Closing Disclosure. FHA’s FAQ 374 further states:

A: FHA does not wish for anyone to make a false certification. Because this is a model component, FHA will accept the tailoring of this phrase to the actual circumstances. Thus, if the Settlement Agent does not prepare the closing disclosure, he or she should remove or strike through the statement “which I have prepared” before executing the Settlement Certification. (Emphasis added.)

This is the FHA’s only guidance at this time, as it has not revised the certification, nor clarified the instructions on the certification itself. Old Republic Title will continue to keep you updated on any further




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