TRID – Understanding the TILA-RESPA Integrated Disclosure (“TRID”) Volume 9

1 Feb

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.

Volume 9

Data Exchange

With the TILA-RESPA Integrated Disclosure (TRID) Rule comes a greater need for communication and exchange of information. Old Republic Title wants to make sure you’re not only prepared for the changes ahead but that you’re equipped to engage in discussions on this topic. It’s important to be knowledgeable and conversant about the various means of communication as well as the terminology so that you can have conversations with your lenders and other partners in the transaction. Settlement agents will likely have to connect to multiple portals depending on specific lender requirements.

Options for Data Exchange

1) Third-Party Integrations: e.g. RealEC Closing Insight. Many large lenders are requiring integration with these types of platforms; however, 40% of lenders say they are not yet prepared for implementation and exchange of data is a big reason why.

2) Portals: The user will log into websitename and key their portion of information (or data) to produce a collaborative Closing Disclosure (CD). Agents and lenders can participate in multiple portals and even host their own portal.

3) Manual Entry: Similar to the current process, the settlement agent and the lender each enter the information into their respective systems then send out the form(s) via emails, fax etc. You may want to consider having an encryption system in place.

Electronic Collaboration Milestones

• When key milestones occur on the manual side, there may be outreach/customer contact to help with the overall process.

1) Order start

2) Search completion

3) Exchange of information

Seller-Only Disclosure

• Settlement agents continue to be responsible for the seller’s side; therefore, the data exchange between settlement agents and lenders needs to be two-way.

• Seller- paid Owner’s Title Insurance and adjustments that need to be made in both the settlement systems and the lender’s Loan Origination System (LOS). The inaccuracies of the disclosure of the title premiums on the Loan Estimate (LE) and on page two of the CD will need to be adjusted with either an allocation of the Lender’s Title Insurance Policy premium between the buyer and seller columns or debits and credits on Page 3. Creditors will need to be informed as early as possible about the financial responsibilities of the consumer and seller.

Separate Settlement Statements

• The ALTA Settlement Statement (ALTA SS) and other similarly formatted closing/settlement statements serve as a disbursement worksheet and have been embraced by many lenders. The ALTA SS will:
• Include signature lines for the borrower and seller which will serve to acknowledge their approval of the figures and to authorize disbursement,
• Allow for the accurate disclosure of the title insurance premiums to the party or parties responsible, in accordance with state or underwriter filings and any contractual agreements,
• Allow for the itemization of recording fees for all documents being recorded,
• Allow the settlement agent(s) and the title companies to distribute copies to the appropriate third parties involved in the transaction, and
• Eliminate the non-public personal information (NPPI) contained in the CD.
• The ALTA SS and other closing/settlement statements do NOT replace the need for the CD; rather, it should be used in addition to and in concert with the CD. Creditors will require that the borrower’s and seller’s bottom lines on the ALTA SS or other closing/settlement statements match the bottom lines of the CD and may require a copy for approval prior to consummation.

Other Considerations

• Not all loans will be subject to the new forms. From a systems standpoint, both the current forms (GFE and HUD-1) and the new forms (LE and CD) will be maintained and used and settlement systems should be prepared for this.

• Many lenders have added a new component to require new levels of security, data privacy and assessment under ALTA’s Best Practices or other compliance requirements. New and more robust security and privacy requirements should be expected from lenders.

• The third party portal model also handles security, privacy and evidence of compliance.

Training

• Training and change management are very important considerations. Mastery of the CD is critical to move ahead with the training on the various systems. It will also be key to stay in tune with what’s happening (i.e. what your lender partners want, etc.).

Glossary

Below is a Glossary to help you become fluent in the language of technological communication.

ALTA SS ALTA =  Settlement Statement

CD  = Closing Disclosure

LE  = Loan Estimate

LOS   = Loan Origination System

NPPI =  Non-public Personal Information

TPS  = Title Production Software

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