What’s Refunded If My Loan Is Higher Than My Estimate?

 

If the amount you pay at closing exceeds the amounts disclosed on the Loan Estimate – beyond tolerance limits for each category – the creditor must REFUND the excess to you no later than 60 calendar days after loan consummation.

For charges subject to a 10% cumulative tolerance fees greater than 10% of the Loan Estimate for the same charges must be refunded.

For fees paid for 3rd party services which the creditor did NOT permit you to shop the FULL amount over the estimate must be refunded.

For charges subject to ZERO tolerance including fees paid to the creditor mortgage broker or their affiliates any amount beyond the Loan Estimate must be refunded.

Could My Loan Costs Exceed The Loan Estimate?

 

Yes, within defined limits.

Service charges for which YOU shop and select a provider may change; the creditor is NOT responsible for providers who are NOT on their written list.

In addition, prepaid interest, property insurance premiums and escrow or reserve deposits may change without legal tolerance limits.

Charges for recording services, and 3rd-party services ON the creditor list, grouped together may not exceed the Loan Estimate total for the same charges by more than 10%.

Transfer taxes, fees paid to the creditor, mortgage broker or an affiliate of either and fees paid to a 3rd party for services the creditor does NOT permit you to shop are ZERO tolerance and must match the Loan Estimate.

What Will The TRID Loan Estimate Tell Me?

 

The Loan Estimate documents the essential facts and terms of an approved real estate loan. It includes:

  • loan terms
  • projected payments and loan costs
  • cash and costs at closing time
  • the services for which you CAN and CANNOT shop in relation to the loan
  • summary information with which to compare this loan to others

and other important details such as appraisal, insurance, late payment, refinancing, loan assumption policy and whether this lender intends to service this loan.

The Loan Disclosure is a dynamic form; it will include information that IS related to YOUR loan and may leave out information that is NOT so forms from different lenders or for different loans may not look identical.

How Long Must Creditors Keep Real Estate Loan Records?

 

Under the TRID rule, creditors must retain Escrow Cancellation and Partial Payment Policy disclosures for two years; Loan Estimate records for three years after loan consummation and Closing Disclosures for FIVE years.

If a creditor sells or transfers their interest they must provide a copy of the Closing Disclosure to the new owner or servicer and both parties must retain it for the remainder of the 5-year period. Records CAN be stored digitally but it is NOT required.

TRID does not define how long consumers should keep disclosure records.

 

What Is A ‘Business Day’ For Real Estate Loan Disclosures?

 

“Business day” is defined slightly differently for Loan Estimates and Closing Disclosures.

For Loan Estimates, each day on which a creditor’s offices are open to the public count as a business day. Loan estimates must be delivered or placed in the mail no later than the 3rd business day after receiving your loan application.

For Closing Disclosures, a business day is defined as all calendar days except Sundays and the Federal public holidays The Closing Disclosure must be provided to you at least 3 business days PRIOR to loan consummation.

Do Creditors Have To Approve TRID Loans In 3 Days?

 

If your loan is approved, on the terms you requested the creditor is required to provide a Loan Estimate within 3 business days.

If they determine that your application will not or cannot be approved they do not have to provide a Loan Estimate.

Likewise, if you withdraw your loan application within that period they do not have to provide the Loan Estimate.

However, if the creditor does NOT supply the Loan Estimate in the required time approving and issuing the loan later under your original application terms will make them non-compliant with TRID Regulation Z.

Can Creditors Collect Information Beyond The 6 Required Pieces?

 

In addition to the required pieces:

  • Name
  • Income
  • Social Security Number
  • Property Address
  • Estimated Property Value
  • Mortgage Amount Sought

a creditor may collect whatever additional information they deem necessary.

However, as soon as you have provided the 6 required pieces, the creditor has 3 business days to provide a Loan Estimate for approved loans.

What 6 Pieces of Information Make A TRID Loan Application?

 

Submitting these 6 pieces of information:

  • Name
  • Income
  • Social Security Number
  • Property Address
  • Estimated Value of Property
  • Mortgage Loan Amount sought

constitutes a valid loan application under the TRID rule.

You may apply and submit these in writing OR in oral form; a live conversation, or a phone call, backed by a written record of the conversation is a legitimate application.

Once these 6 pieces of information are submitted a creditor MUST supply a Loan Estimate for approved loans within 3 business days.

What Disclosures Are Used For Loans Not Covered By TRID?

 

Creditors must continue to use the Good Faith Estimate, Truth-In-Lending Disclosure and the HUD-1 form for reverse mortgages, HELOCs, mobile home or other non-attached dwelling loans and others NOT covered by TRID.

Housing assistance loans for low- and moderate-income consumers are partially exempt from TRID disclosures, and have specific rules.

Creditors are not required to provide Loan Estimate and Closing Disclosure forms and related booklets and statements for these loans.

What Do Lenders Have To Tell You About Your Real Estate Loan?

 

Federal “disclosure” forms define the information that creditor businesses MUST provide to consumers applying for real estate loans.

As of Oct 1, 2015 lenders must provide TWO New “TRID” disclosure forms. for the most common kinds of real estate loans First, the Loan Estimate, which covers the key features, costs and risks of a mortgage loan.

For an approved loan this must be returned to the consumer within 3 business days of loan application. If the loan goes forward, the Closing Disclosure form, covering key transaction costs, must be delivered at least 3 business days before loan consummation.