General TRID FAQs

NO; Renovation Escrows do not get entered on the LE. Charges associated with the loan are what is entered on the LE (i.e. final inspection fee, Correspondent Supplemental Origination, etc.)

All parties of the Trust must be disclosed. Some forms of ownership are a percentage as trustee and/or individually. All owners must be disclosed.

A Non Borrowing Owner (NBO) is someone who is vested on Title, but is not present on the loan.

A Non Titled Spouse (NTS) is the spouse of the borrower – who is not vested on Title and is not present on the loan.

It can be blank on the initial LE, but it should include AFR’s information since they are locking directly with the Creditor.

Providing there were no interest rate dependent charges that changed, you can use the LE issued at the time of the lock.

Yes. If the borrower requests a change in program, then it is permissible to issue revised LE. If the borrower’s eligibility for a certain program changes during underwriting (i.e. borrower was delinquent on a debt and is not eligible for FNMA but is for FHA), then it is permissible as well.

Yes, this is permissible because it affects the value of loan security and could not be known at the time of the initial Loan Estimate.

If in good faith you believe a final inspection is required, then it should absolutely be included on the initial Loan Estimate.

The initial LE must be delivered within 3 general business days after receiving the borrowers complete application and seven business days before Consummation.

A revised LE must be delivered within 3 general business days after receiving information sufficient to establish a valid changed circumstance and within 3 general business days of the interest rate lock.

A complete application consists of the following 6 pieces:

• Property Address
• Loan Amount Sought
• Borrower’s Income (stated, not verified)
• Estimate of the Value of the Property
• Borrower’s Name
• Borrower’s Social Security Number to obtain a credit report (could also be a Tax EIN)

Yes, however it cannot resemble the LE and it must contain the following disclaimer is at the top of the first page in 12-point font or greater: “Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan.”

There are two waiting periods for the LE:

• The initial LE must be provided to the borrower 7 specific business days before consummation.
• A revised LE must be received by the borrower 4 specific business days before consummation.

For delivering the LE, general business days are defined as days in which the lender’s offices are open to the public for carrying out substantially all of its business functions. AFR business days are Monday through Saturday, except AFR observed holidays.

For purposes of consummation and rescission, specific business days are defined as all calendar days except Sundays and legal public holidays: New Year’s Day, Martin Luther King Birthday, Washington Birthday, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, and Christmas Day.

When the LE is not delivered in person, the borrower is considered to have received the LE 3 specific business days after it is delivered electronically or placed in the mail (unless evidence is provided demonstrating earlier receipt).

If the borrower does not have an e-mail address, AFR will provide the Client with a CD and will require the Client obtain the borrower’s signature. AFR will start counting days from the signature date.

The waiting period may be waived if the consumer has a bonafide personal financial emergency. This is determined by the facts surrounding the consumer’s individual situation and will be reviewed on a case-by-case basis.

Yes.

The LE must be provided to the borrower before you are permitted to request any documentation (ex: paystubs, bank statements, etc.). For example, before providing the LE, you may ask the names, account numbers and balances of a borrower’s checking/savings account; however you may not require a copy of the bank statement or similar document for verifying the information. To provide another example, you may ask for the sales price and property address; however you cannot require the purchase/sales contract to be provided before delivering the LE.

Pre-approvals: the LE can be issued without a property address and verifying documents are not required in order to provide it. The property address can be listed as TBD and a zip code must be provided. If the borrower is not shopping for a home in a specific area, multiple zip codes could be provided as the property address.

The borrower may only be charged a reasonable and bona fide charge for a credit report. This is the only permissible time to request the borrower’s payment information prior to the borrower receiving the LE and indicating intent to proceed, which means if the credit report fee is not charged to the borrower until closing, then no payment information can be obtained from the borrower.

The borrower cannot be charged another credit report fee until receiving the LE and indicating intent to proceed. For example, a third-party originator submits an application to Creditor B after receiving a decline notice from Creditor A. The credit report fee was charged previously during the application process with Creditor A. At this point, a new credit report fee could not be charged before Creditor B supplies the LE. The borrower has already paid one reasonable and bona fide credit report fee. Another cannot be charged until after receipt of the LE and indicating intent to proceed.

The borrower must receive the LE and indicate intent to proceed before the appraisal fee can be charged or a credit card number is obtained.

It is permitted to retain the credit card number on file after charging for the credit report, however the appraisal fee cannot be charged until after the borrower has received the LE, indicated intent to proceed AND the borrower must provide new authorization for the use of the credit card for the appraisal fee.

TIP is the total amount of interest the borrower will pay over the whole life of the loan as a percentage of the loan amount.

On the LE, general and specific Lender Credits will show as a lump sum under section “J. Total Closing Costs”. This lump sum will include credits given to pay for a specific fee (i.e., the lender is paying for the appraisal) and general credits (i.e., credit for the interest rate chosen).

On the Closing Disclosure (CD), the credit for a specific fee will show under the “Closing Costs Details” table as “Paid by Others” – (L) can be included to indicate paid by Lender. General lender credits will show under section “J. Total Closing Costs”.

The appraisal can be ordered once you have an executed Intent to Proceed.

The appraisal desk will require the executed Intent to Proceed and the Client’s Loan Estimate (LE). AFR will release the hold on the 4th day from the LE issuance.

If the Borrower uses the services from a Service Provider that is listed on the Settlement Services Provider List that is disclosed to the Borrower, the Loan Estimate (LE) and the Closing Disclosure (CD) must reflect that the Borrower DID NOT shop for this service fee.

Yes. If the borrower selects a service from the disclosed Service Provider List, the fee should be in the “B. Services You Cannot Shop For” section of the Closing Disclosure (CD).

No; a COC is not permitted.

Check the Loan Information screen in LoanCenter; if the borrower accepted eConsent – the eConsent Accepted Date will be completed.

Zero tolerance now also includes fees paid to an unaffiliated third party, if the borrower was not permitted to shop for the service provider (e.g. Appraisal, Credit Report, and Flood Cert), and fees paid to an affiliate of the lender or mortgage broker.

The appraisal fee itself can still increase with a valid changed circumstance. For example, the appraisal was ordered for a single family residence per information provided by the borrower, however when the appraiser visited the property, it’s actually a condominium and thus a different schedule of appraisal fees applies. This is a valid changed circumstance.

However, there will also be situations that will not be a valid changed circumstance. Fee increases for the location of the property is not a valid changed circumstance since the property location was known when the LE was disclosed. AMCs/appraisers that need to charge more for specific ZIP codes must identify this on their fee tables to ensure the highest customary appraisal fee is disclosed upfront.

It is still a valid changed circumstance if information specific to the borrower or transaction that the lender relied on when providing the LE was inaccurate or changed after the LE was provided. In the case where the need for a field review or final inspection was only discovered after the underwriter reviews the initial appraisal that would be a valid changed circumstance.

There are two ways to look at credit supplements in regards to if it’s a valid changed circumstance:

1. If we received new information since delivery of the LE that would affect the borrower’s credit score so a credit supplement was ordered to verify the new information, this would be a valid changed circumstance. Examples include: validating new debt discovered during the undisclosed debt monitoring process and evidencing debt was paid in full and closed by the borrower in order to lower the DTI for credit approval.
2. If the credit supplement was ordered only to clarify information on the credit report, this may not be a valid changed circumstance since other documentation could be obtained to confirm this information.

If the borrower did not indicate intent to proceed within 10 business days, you can change the LE however you want. However, if the borrower did indicate intent to proceed and then the short sale approval takes a very long time while in the interim default fees changed for the lender, AMC, etc., then this would be a valid changed circumstance due to the length of time. Each individual circumstance, though, should be reviewed by the AFR Compliance Department to ensure it is documented accurately.

If there is a valid changed circumstance affecting the 10% tolerance category, the LE is only redisclosed if the total fees in that category increase over the 10% threshold. For example, the title agent discovers a lien on title that needs to be cleared and adds a $100 fee to clear it. If the borrower and lender were unaware of this lien in order to accurately disclose the title fees upfront, then this new information can be considered a valid changed circumstance, however you will only redisclose the LE if this fee caused the total category to increase over the 10% threshold. If the total fees in the 10% category were $800, so the total has now increased to $900, that is a 12.5% increase and the LE can be redisclosed showing the new title clearance fee. On the other hand, if the title clearance fee was only $50 that is a 6.25% increase and the LE would not be redisclosed. The LE cannot reflect increased fees until it’s surpassed the 10% threshold.

We will send the CD to the Title Co at the same time it is sent to the Client.

If the borrower accepts eConsent, a “wet” signature will not be required.

Yes, if AFR issued the Closing Disclosure (CD), we will provide the Settlement Agent the Final Approval.

AFR will request the Title Invoice through Encompass.

No.

No; if the APR falls out of tolerance or there is a loan program change such as changing from ARM to fixed or a pre-payment penalty is added, AFR will re-disclose the CD.

AFR will not issue a CTC until we have a Final CD. Once the file is CTC’d, the Closing Scheduler will review the disclosure dates and you will schedule your closing based on the first available date after the adequate waiting period has passed.

The borrower must receive the CD no later than 3 business days before consummation. This applies to both purchase and refinance transactions. For example, if the loan is scheduled to close/sign on Thursday, the borrower must receive the CD at least by the Monday before the closing/signing.

Consummation means the time that a consumer becomes contractually obligated on a credit transaction, which is the date the Note is signed.

For the CD, specific business days are defined as all calendar days except Sundays and legal public holidays: New Year’s Day, Martin Luther King Birthday, Washington Birthday, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, and Christmas Day.

When the CD is not delivered in person, the borrower is considered to have received the CD 3 specific business days after it is delivered electronically or placed in the mail (unless evidence is provided demonstrating earlier receipt).

The lender can contract with the settlement agent to provide the CD on the lender’s behalf; however the lender is still legally responsible for the accuracy as well as any errors or defects. AFR will prepare the CD on all Wholesale transactions.

Either the lender or the settlement agent can prepare the Seller’s CD, however, AFR will have the settlement agent prepare and deliver it to the seller. The closing agent will then have to provide AFR with a copy of the CD and any documents used to prepare it.

The waiting period may be waived if the consumer has a bonafide personal financial emergency. This is determined by the facts surrounding the consumer’s individual situation and will be reviewed on a case-by-case basis.

No, consummation occurs when the Note is signed, so the 3 business day waiting period must be satisfied prior to the signing/closing.

There are three categories of changes that require a revised CD to be delivered to the borrower:

1. Changes before consummation that require a new 3 business day waiting period:
   • Disclosed APR becomes inaccurate
   • Change in loan product (i.e. Fixed to ARM)
   • Addition of a prepayment penalty
2. Changes before consummation which do not require a new 3 day waiting period:
   • Costs change which do not cause the APR to become inaccurate (e.g. HOA due, escrow, attorney fee)
   • Note: Although the waiting period was not reset, the borrower has the right to inspect the revised CD during the business day prior to consummation.
3. Certain changes which occur after consummation require issuance of a revised CD:
   • If there is a tolerance violation, the creditor must provide the refund and deliver or place in the mail a revised CD within sixty calendar days after Consummation
   • If there is a change in the amount paid by a consumer from what was disclosed (i.e., adjustment on transfer taxes/recording fee), the creditor must provide the refund and revised CD within 30 calendar days after establishing the event occurred
   • If there is a change in the amount paid by the seller from what was disclosed, the closing agent must provide the revised CD within 30 calendar days after establishing the event occurred
   • Non-numeric clerical errors can be cured within sixty calendar days after Consummation (i.e., wrong settlement service provider listed). Listing the incorrect property address is not a clerical error.

In a rescindable transaction, the CD must be provided separately to each consumer that has the right to rescind, so in this case, the NBS or any Title holder would need to sign. In transactions that are not rescindable, the CD may be provided to any consumer with primary liability on the loan. It is permissible for the lender to add signature lines, so AFR may require the NBS sign if vested on title or in a community property state. Note: The AFR Loan Submission Form has been updated; we will require this to be completed at the time of submission to prevent any last minute delays.

AFR will disclose the Closing Disclosure once we have all the accurate figures. This will be obtained via the Title invoice and the lock confirmation. NOTE: AFR cannot issue the CD until the loan is locked.

AFR will disclose the CD on all files where we draw Closing docs.