MBA President, David Stevens, wrote a letter to the CFPB about the industry wide concerns and unintended consequences of TRID. Well they responded to the MBA with somewhat favorable news.
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Here's another one – just happened to me. We provide initial disclosurses showing the lender covering most of the remaining closing costs for a loan and the seller providing somewhat substantial seller concessions. At the time of initial disclosure, the borrower was bringing a little more than her down payment. The costs go down due to tax prorations, and a few other items. We are required to still cover the same lender credit we initially disclosed – ok, I get that. But in this instance, now, the seller is contributing less than they had agreed to in the contract. So who gets mad? Pretty much all parties. Sure we can try to add items for the buyer like a home warranty, etc but because of this the full seller concessions weren't utilized.
And I did all of my homework, got a prelim CD from the title company, put in the correct closing dates, tax collection dates, etc. But this will happen again.
So, just like your example of the aggregate adjustment where the LO said – "just trust me" – am I now supposed to say "I'm going to give you a lender credit at closing to cover the remaining closing costs? But due to regulations, I'm not going to initially disclose it because I want you to fully utilize the seller concessions, and because costs can change (only on certain items of course) – you're just going to have to trust me that I'm covering all the closing costs when you get your CD 3 days prior to closing".
Oh, and the great part is right now, the Loan Estimate doesn't match the Fee Itemization due to the aggragate adjustments. Just trust me…these are the correct numbers, the Loan Estimate is wrong.
Good thing I have an honest look about me.
I M Fletcher.
PS Have a nice day.
God Bless you both in 2016. May it be filled with great prosperity, love, peace and joy! Thank you for all the information and guidance you have given us all in 2015 and I look forward to working with you more in 2016.
Bernie Dillon
The seller credit is absolutely essential on a transacation where the buyer only can come in, or wants to come in, with their minimum required down payment. Without the seller credit, you only have the rate credit to manage the borrower cash to close and the difference in a rate adjustment of only .125 can result in a wide swing in the cost to close. In tight borrower cash to close situations, It is often necessary to give the seller back some of thier negotiated credit to borrower unless there is enough time to relock the rate. The new TRID mandatory requirement for the borrower to STARE at their CD for a FULL THREE DAYS is just one more DELAY that makes it that much more difficult to make the adjustments to get all the numbers and credits correct between borrower and seller. As a result, to save valuable time in a rate adjustment relock due to the numbers not being correct, we did a principle reduction at closing. The CFPB NEEDS to give the consumer the right to waive the 3 day CD review as I see how these additional delays have cost my clients and all parties involved in the transaction with additional expense that we used to easily avoid.
Madness
That post explains a lot about the last minute problems TRID has caused. Every trid I've closed with seller paids is a nightmare. Either all the seller funds are not being used or the combination of lender credit and seller credits it can't all be used. You are correct everyone is angry at closing. Nothing like saying someone can have something and then take it back. Another problem is having 10% tolerance on the title fees box and box H. Why can't we just have 10% tolerance on the total fees. That is reasonable. If someone either at the lender point or the title company mistakenly moves something out of one box into another it is a problem, even when overall the costs have gone down.
The cfpb does not get it. Folks really want to know what the payment is, how much money do I need and when can I close. Oh, and btw, make it easy to read. Everything TRID is not.
Why is there no reason in our world anymore? The two page HUD1 listed all the costs in a easy to read and understand format. What was wrong with this?
Dora Griffin amen.