FDIC Issues Interagency Compliance Examination Procedures for TRID
June 30, 3014 the FDIC released Financial Institution Letter 27-2015.The letter provides a large number of resources and links to the updated Compliance Examination Manual. The revised interagency examination procedures pertain to the new Truth in Lending Act (TILA) – Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure Rule (TRID Rule), as well as amendments to other provisions of TILA Regulation Z and RESPA Regulation X.
To view the 4-page Financial Institution Letter which will provide all of the links and resources, click on the following link:
https://www.fdic.gov/news/news/financial/2015/fil15027.html
To access the complete compliance examination manual from the FDIC website, click on the following link:
https://www.fdic.gov/regulations/compliance/manual/index.html
The Consumer Financial Protection Bureau (CFPB) issued a proposal for a TRID Rule effective date of October 3, 2015. The examination procedures should be helpful to financial institutions seeking to better understand the areas on which the FDIC will focus as part of the examination process.
Statement of Applicability to Institutions Under $1 Billion in Total Assets:
This Financial Institution Letter applies to all FDIC-supervised institutions.
Highlights:
FDIC examiners will use the updated interagency examination procedures to evaluate financial institutions’ compliance with residential mortgage loan rules, including the following new or amended rules:
TRID Rule – replaces the requirements to provide the RESPA Good Faith Estimate and HUD-1 Settlement Statement and Truth in Lending disclosures for most closed-end mortgage loans with two documents: the Loan Estimate and the Closing Disclosure. (Proposed Effective Date October 3, 2015)
Mortgage Servicing Rules – provide an alternative definition of the term “small servicer” for certain nonprofit entities.
Ability-to-Repay / Qualified Mortgage Rule – amended to provide creditors or assignees meeting certain requirements a limited period of time in which to review a transaction and “cure” excess points and fees for purposes of maintaining QM status.
The updated procedures also reflect the additional exemptions from the Higher-Priced Mortgage Loans (HPML) Appraisal Rule, which were finalized prior to the January 2014 effective date, but after examination procedures were last issued.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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