Freddie Mac Issues Bulletin Regarding TRID Disclosures
By Anna DeSimone
June 30, 2015, Freddie Mac Issued Bulletin 2015-10, CFPB Integrated Disclosure Forms. Key highlights of the bulletin are provided in this newsletter.
The TRID Rule initially had been slated to take effect on August 1, 2015. On June 17, 2015, the CFPB announced its intention to propose and invite comment on a new effective date of October 1, 2015. To assist Seller/Servicers in their implementation preparations for the date on which the TRID Rule ultimately takes effect, as finally communicated by the CFPB (i.e., the “TRID Rule Effective Date”), we have amended the Guide as set forth below. All of the changes announced in this Bulletin are effective immediately unless otherwise noted.
Updates for New Terminology
In response to the TRID Rule, Freddie Mac is updating the Guide to reflect the new terminology. With respect to the settlement-related disclosures, Guide references to the old forms are basically replaced with references to a new Glossary term, Settlement/Closing Disclosure Statement, which includes, as applicable, both the HUD-1 Settlement Statement and the new Closing Disclosure.
The Settlement/Closing Disclosure Statement is defined as any settlement statement or closing disclosure required by applicable federal, State or local law. With respect to an all-cash short sale or other Servicing transaction for which no settlement and/or closing disclosure is required by applicable law, the term Settlement/Closing Disclosure Statement means (i) a HUD-1 Settlement Statement prepared for any transaction closing prior to the TRID Rule Effective Date, or (ii) a Closing Disclosure completed in accordance with the CFPB disclosure rules on or after the TRID Rule Effective Date, or (iii) any other settlement statement or closing disclosure that would have otherwise been required by applicable State or local law, in each instance as determined by the Servicer, and notwithstanding the inapplicability of such rules or prior law or regulation to the particular transaction.
The latter part of the Glossary definition is intended to capture unique situations confronted by Servicers where applicable law does not mandate a particular settlement statement or closing disclosure (e.g., cash-only short sales). In such a circumstance, if the Guide requires a Servicer to provide that type of document, then a Servicer must determine which of the following it will provide to Freddie Mac:
- The HUD-1 Settlement Statement
- The new Closing Disclosure, or
- A similar State closing disclosure or settlement statement
As applicable, Guide references to the HUD-1 Settlement Statement and settlement statement and/or closing statement have been updated. Loan Prospector® will be updated by August 1, 2015 to reflect this new terminology. During the Guide review for updates related to the TRID Rule, Freddie Mac reviewed the documentation requirements for sale of assets. Freddie Mac streamlined these requirements and consolidated them from Guide Section 37.20(a) into Sections 37.22(b) and 37.23(b) for ease of customer use.
Collection of Signatures
The CFPB provides lenders with the discretion to determine whether they will require Borrowers to sign the new Loan Estimate or Closing Disclosure forms, and limits the purposes for which those signatures may be obtained. The CFPB also has provided a framework for collecting additional forms, such as customary attestations, which may accompany the Closing Disclosure, provided that certain requirements are met.
Freddie Mac will not require signed Settlement/Closing Disclosure Statements or additional forms on and after the TRID Rule Effective Date. However, Seller/Servicers may wish to consider collecting (or continuing to collect) signatures and/or forms given their potential evidentiary value, consistent with current widespread industry practices.
Future Updates
Consistent with the changes described above, updates to the following will be made with a future Bulletin once the TRID Rule Effective Date is confirmed:
- Applicable ULDD Data Point delivery instructions in Guide Chapter 17
- Deletion of references to “signed/executed” from applicable Guide sections
- Section 46.24, which applies specifically to the Truth-in-Lending Disclosure Statement
- The Glossary definition for Application Received Date
- Guide Exhibit 7, which specifically mentions Good Faith Estimate
Uniform Closing Dataset
Freddie Mac will not require the delivery of the Uniform Closing Dataset (UCD) in 2015. The UCD was developed jointly with Fannie Mae under the direction of the Federal Housing Finance Agency to support the CFPB’s Closing Disclosure. Additional information regarding, among other things, the required delivery date of the UCD will be provided in a separate communication.
Please refer to the Bulletin for other revisions.
About the Author
Anna DeSimone is President and Founder of Bankers Advisory and Principal of CliftonLarsonAllen LLP. She can be reached at anna@bankersadvisory.com
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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