TRID – Understanding the TILA-RESPA Integrated Disclosure (“TRID”) Volume 13

2 Feb

Clarifications of TRID continue….

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 13

If the creditor/lender requires a service only because it was mentioned in the Contract for Sale, does it trigger the creditor/lender’s need to supply a list of service providers for that service?

CFPB’s verbal response was, “yes.” If the creditor/lender includes the requirement on their commitment, then it is deemed a loan requirement and the lender must comply with providing a list of service providers for that service. We asked, “what if the creditor/lender includes a simple requirement that the consumer must meet all of the requirements of the Contract of Sale but does not mention any specific services?” The CFPB representative said, “Nice try.” He went on to explain that it doesn’t matter how the creditor/lender learned about the service requirements or how it’s worded on the commitment, they must comply with the additional provisions of the Rule if their loan is conditioned on meeting the requirement.

Example: If the Contract of Sale requires the consumer to purchase a home inspection and then the creditor/lender mentions it directly or indirectly in the loan commitment, the creditor/lender must supply a provider list of home inspector(s).

If a creditor/lender on a commercial transaction requires a mortgage on one of the parties’ residences, does that mortgage fall under the provisions and requirements of TRID?

This was verbally answered by a CFPB attorney who said that as long as the “primary” purpose of the mortgage on the residential property is NOT for “personal, family or household purposes,” it does not fall under the provisions of TRID.

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