Part 1: Rule Applicability

The following information is intended for general information purposes with the goal of assisting Ellie Mae’s customers in complying with the new KBYO regulations. This information is provided as a courtesy to Ellie Mae’s customers and Ellie Mae makes no representation or warranty regarding the accuracy of the information set forth herein, and you may not rely on this information to ensure your company’s compliance with the KBYO regulations. This FAQ should not be construed as legal advice or opinion on any specific facts or circumstances, including the application of the KBYO regulations. You are advised to consult your own compliance staff or attorney regarding your specific residential mortgage lending questions or situation to ensure your compliance with all applicable laws and regulations.
When do the new disclosures become effective and for which transactions?
The new disclosures are effective for applications received on or after October 3, 2015. They apply to all closed-end loans securing real property. The following loans are excl...
Do you define “exempt” to mean we are not “allowed” to use the new forms or not “required” to use them? Can we send the new forms on a HELOC for example in lieu of the old? Can we use the new disclosures on all transactions?
Exempt meaning not applicable under the requirements of §1026.19(e), (f) & (g) regarding the use of the Loan Estimate and Closing Disclosure. However, the use of the model for...
Can you confirm coops are excluded from the new disclosures since they are not secured by real property?
It would depend on whether an individual state has any provisions in which a cooperative unit is defined or considered "real property." Citation(s): §1026.28(a)(1...
Are transactions with 25 acres and more exempt?
No, the current provisions providing an exemption under RESPA (§1024.5(b)(1)) for properties of 25 acres or more is eliminated (reserved) under the rule. ...
When can we start the new disclosures?
The Loan Estimate, Closing Disclosure, and other relevant disclosures implemented by the rule are effective on October 3, 2015. They cannot be used until that date since the pr...
Do manufactured (mobile home) loans still require the use of the Good Faith Estimate, Truth in Lending Statement, and the HUD-1? Do we have the option to use the Loan Estimate and Closing Disclosure?
It depends. If the manufactured home is or will be attached to real property and therefore considered "real property" it would be considered a covered loan under the rule. If t...
So if we have a down payment assistance program that generates a 2nd lien do we disclose the first using the new disclosures or the old?
If the first lien is a closed-end transaction secured by real property, then you would use the Loan Estimate and Closing Disclosure. If the second lien is an exempt transaction...
What if a loan starts off as an Investment Property and old disclosures are sent but later changes to Owner Occupied. Can we then send new disclosures?
Yes. In this case you would refer to the policies established by your organization regarding such changes. Generally speaking, such a change would most likely trigger an advers...
We are a Non-Profit Lender that does Rehabilitation Loans/Grants. Do you know how these changes will affect us?
It depends on whether the specific transaction falls within the partial exemption provisions established under §1026.3(h) regarding certain mortgage loans that would be specif...
In a correspondent loan situation where the correspondent purchaser of the loan is performing the underwriting for the seller of that loan, does the correspondent purchaser have any obligation around the Loan Estimate or Closing Disclosure?
There is not sufficient information to completely answer this question. However, based on the wording of the question it appears as though the concern stems from determining wh...
If I issue a Loan Estimate or a Closing Disclosure am I obligated to make the loan?
Neither the Loan Estimate or the Closing Disclosure mandates an obligation to make a loan. The consumer must continue to qualify for the loan as determined by your approval/com...
Is there a penalty for providing both the current and new disclosures post October 3?
It would certainly be recommended that you not issue both sets of disclosures. Although the provisions under the rule do not specifically address this issue, it would no doubt ...
So for states that use an open-end mortgage this rule would not apply?
It depends on the provisions contained within the security instrument for the particular state. In many cases an open-end mortgage is simply a title used for the instrument, bu...
How does the rule apply to loans receiving adverse action or loan cancellation prior to issuing the Loan Estimate?
The Loan Estimate is not required under 1026.19(e)(1)(i) as long as the adverse action occurs prior to the expiration of the three general business day requirement after receip...
If our document provider is aware of the changes that are coming and provides for the correct docs to be used why do we need to prepare 3 months in advance of the actual change taking place? Can you enlighten us as to any concerns we should have?
There are many issues you should consider for advance preparation prior to October 3, including (but not limited to): service provider oversight of your LOS provider and approp...
Does part of this regulation pertain to appraisers? I didn’t hear any mention of an appraisal portion.
The responsibilities for compliance with the disclosure requirements do not affect the property appraiser, nor does the rule contain any revisions to valuation independence. ...
Disclaimer: The above information is intended for general information purposes with the goal of assisting Ellie Mae’s customers in complying with the new KBYO regulations. This information is provided as a courtesy to Ellie Mae’s customers and Ellie Mae makes no representation or warranty regarding the accuracy of the information set forth herein, and you may not rely on this information to ensure your company’s compliance with the KBYO regulations. This FAQ should not be construed as legal advice or opinion on any specific facts or circumstances, including the application of the KBYO regulations. You are advised to consult your own compliance staff or attorney regarding your specific residential mortgage lending questions or situation to ensure your compliance with all applicable laws and regulations.

CFPB announcement regarding the delay of TRID

The Consumer Financial Protection Bureau is delaying until October 3, 2015, the effective date of the TILA-RESPA Final Rule and the related TILA-RESPA Amendments. In light of certain procedural requirements under the Congressional Review Act (CRA), the TILA- RESPA Final Rule and the TILA-RESPA Amendments cannot take effect on August 1, 2015, as originally provided by those rules. To comply with the CRA and to help ensure the smooth implementation of the TILA-RESPA Final Rule, the Bureau is extending the effective date of both the TILA-RESPA Final Rule and the TILA-RESPA Amendments beyond the additional minimum period required by the CRA to October 3, 2015, as proposed. The Bureau is also making certain technical amendments to the Official Interpretations of Regulation Z to reflect the new effective date and technical corrections to two provisions of Regulation Z adopted by the TILA-RESPA Final Rule.

The full statement from CFPB Director Richard Cordray can be viewed here

Popular KBYO questions

When do the new disclosures become effective and for which transactions? Part 1: Rule Applicability What happens in October when your final forms are new but initials are old? Part 4: Loan Estimate – Timing & Consumer Receipt For electronic delivery of disclosures, after a borrower agrees to accept electronic delivery in compliance with the ESIGN Act must all disclosures be sent through an ESIGN compliant system, or can a lender email a scanned copy of a document through normal email? Can the borrower return the document by email as an attachment? Part 3: Loan Estimate – Miscellaneous Questions If an application is received prior to October 3, 2015 and a Good Faith Estimate was provided to a consumer should a HUD-1 Settlement Statement and Final TIL Disclosure Statement or a Closing Disclosure be provided to the consumer when the consummation date is on or after October 3, 2015? Part 1: Rule Applicability Do you define “exempt” to mean we are not “allowed” to use the new forms or not “required” to use them? Can we send the new forms on a HELOC for example in lieu of the old? Can we use the new disclosures on all transactions? Part 1: Rule Applicability Can you confirm coops are excluded from the new disclosures since they are not secured by real property? Part 1: Rule Applicability Are transactions with 25 acres and more exempt? Part 1: Rule Applicability When can we start the new disclosures? Part 1: Rule Applicability What if no lender credits are decided until the loan closing, does a new Loan Estimate need to be provided to reflect this? Part 9: Revised Loan Estimate – Revisions/Re-Disclosure (including Timing & Delivery) If loan amount changes, then can the lender credits change? Part 9: Revised Loan Estimate – Revisions/Re-Disclosure (including Timing & Delivery)