Your comprehensive guide to CFPB’s newest TRID compliance updates

by James McClister

Disclosing and determining good faith for services the borrower may shop

(Changes to sub section) Section 7.4 – When is a consumer permitted to shop for a service? (§ 1026.19(e)(1)(vi)(C))

In addition to the Loan Estimate, if the consumer is permitted to shop for a settlement service, the creditor must provide the consumer with a written list of services for which the consumer can shop. This written list of providers is separate from the Loan Estimate, but must be provided within the same time frame—that is, it must be provided to the consumer no later than three business days after the creditor receives the consumer’s application—and the list must:

  • Identify at least one available settlement service provider for each service; and
  • State that the consumer may choose a different provider of that service. (§ 1026.19(e)(3)(ii)(C) and (e)(1)(vi)(C))

The settlement service providers identified on the written list must correspond to the settlement services for which the consumer can shop as disclosed on the Loan Estimate. (Comment 19(e)(1)(vi)-3). See form H-27(A) of appendix H to Regulation Z for a model list. A creditor is permitted to add language to the written list indicating that the inclusion of a service provider on the written list is not an endorsement. (Comment 19(e)(1)(vi)-6). However, there is no specific language required to be provided when the creditor wishes to do so. The general requirement that the creditor must provide the information clearly and conspicuously on the disclosures under § 1026.17(a) would apply to any language the creditor adds to the written list.

The creditor may also identify on the written list of providers those services for which the consumer is not permitted to shop, as long as those services are clearly and conspicuously distinguished from those services for which the consumer is permitted to shop. (Comment

(Changes to sub section) Section 7.5 – What charges are subject to a 10% cumulative tolerance? (§ 1026.19(e)(3)(ii))

Charges for third-party services and recording fees paid by or imposed on the consumer are grouped together and subject to a 10% cumulative tolerance. This means the creditor may charge the consumer more than the amount disclosed on the Loan Estimate for any of these charges so long as the total sum of the charges added together does not exceed the sum of all such charges disclosed on the Loan Estimate by more than 10%. (§ 1026.19(e)(3)(ii))

Added sub section 

  • Section 8.8 – May a creditor use a revised Loan Estimate if the rate is locked after the initial Loan Estimate is provided? (§ 1026.19(e)(3)(iv)(D))

These charges are:

  • Recording fees (Comment 19(e)(3)(ii)-4);
  • Charges for third-party services where:
    • The charge is not paid to the creditor or the creditor’s affiliate (§ 1026.19(e)(3)(ii)(B)); and
    • The consumer is permitted by the creditor to shop for the third-party service, and the consumer selects a third-party service provider on the creditor’s written list of service providers. (§ 1026.19(e)(3)(ii)(C); § 1026.19(e)(1)(vi); Comments 19(e)(3)(ii)-3, and 19(e)(1)(vi)- 1 through 7)).

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