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TRID Guide for Correspondents

* C O N F I D E N T I A L * Duplication and/or distribution of this document without prior

written approval from BofI is strictly prohibited.

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Section Contents Page Number

TRID Overview: • What is TRID? 3

• Definition of an Application 4

Loan Estimate (LE): • Timing Requirements 6

• Business Day Definition 7

• FAQ’s 8

• Evidence of receipt of LE 9

• Submission Requirements 10

• Change of Circumstance 11

Closing Disclosure (CD): • Timing 13

• Re-disclosure 14

• Who must receive CD? 15

• Proof of Receipt 16

• Calendar 17

• FAQ’s 18

• Seller signed CD 19

• Tolerance Categories 20

Summary: • Summary 21

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What is TRID? TRID combines four (4) disclosures that are required under TILA and RESPA into two

forms.

The initial TIL and GFE will be replaced by the Loan Estimate (LE)

The final TIL and HUD will be replaced by the Closing Disclosure (CD)

The rule is under Reg. Z and goes into effect on October 3, 2015.

Loan Estimate (LE)

GFE

Initial TIL

Closing Disclosure (CD)

HUD

Final TIL

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What is the definition of an application?

Once a lender receives the 6 pieces of information, an application has been triggered.

No more requiring a 7th item before considering the loan as an application.

•Property AddressP

•Estimated ValueE

•NameN

•Credit• (social security number to pull credit)C

• IncomeI

•Loan amountL A Loan Estimate (LE) must be provided to the consumer within 3 business days of

receiving an application. Cannot charge a consumer, other than a bona fide credit report fee, until they have

received the LE and indicated an intent to proceed. Note: BofI will not accept an Loan Estimate dated prior to the application date.

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Loan Estimate

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Timing Requirements for the Loan Estimate

Initial LE must be delivered within 3 specific business days of the application date (Does not include Saturday if Lender is not open for business)

The Initial LE must be provided to the borrower no later than 7 general business days before consummation (calendar days except Sundays and Federal Holidays)

All Change of Circumstance Loan Estimates must be provided within 3 business days of the COC event (waiting periods apply if APR increases by more than 0.125%)

Note: if an application is denied or withdrawn within 3 business days, the LE is not required and the application under the same terms cannot be reactivated.

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Business Day DefinitionSpecific Business DayFor purposes of providing the Loan Estimate, or any revised Loan Estimate, a business day is a day on which the creditor’s offices are open to the public for carrying out substantially all of its business functions. (Specific Business Day – used for the purposes of determining the last day the LE must be delivered)

General Business Day For all other purposes, business day means all calendar days except Sundays and legal public holidays recognized by the Federal Reserve. (General Business Day - used for counting all applicable wait periods)

Mailbox rule It is presumed a borrower receives a disclosure on 3rd general business day after it is delivered or placed in the mail. The mailbox rule is used when there is no proof the borrower received the disclosure.

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Loan Estimate FAQ’s

Who must receive a copy of the Loan Estimate? On rescindable transactions, the LE must be given to each consumer who has

the right to rescind under TILA. NOTE: Non-borrowing spouses/individuals on Title are required to receive the Loan Estimate – proof of receipt will be required. (Section 1026.17(d) Regulation Z)

On non-rescindable transactions, the LE may be provided to any consumer with primary liability on the obligation.

Does BOFI require the loan estimate to be executed by the borrower (s)? Yes, the loan estimate must be executed by the borrower(s).

Can the loan officer request any income or asset documentation prior to receipt of the intent to proceed?

No the loan officer cannot request any documentation until the borrower has given their intent to proceed.

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What should be provided to evidence receipt of the Loan Estimate?

NOTE: We recommend all Correspondents engage an e-sign/e-delivery vendor and implement the necessary procedures for documenting proof of receipt of the Loan Estimate and Closing Disclosure.

Evidence of consumer receipt through email acknowledgement from consumer.

Evidence of electronic receipt – read receipt.

Signing for a UPS/FedEx package

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What documents does BofI require at submission? Attestation: Seller must complete the online TRID Attestation on the BofI

Lending Partners website for each loan that is submitted. (Found in the “Submit My Loan” screen) “By submitting this application I certify I have complied with BofI submission requirements and the changes under the TRID rules? Y, N or N/A?

Evidence of Receipt of Loan Estimate by required parties (See page 7 for information on who must receive a copy of the LE)

A detailed fee sheet – must match your Loan Estimate Intent to proceed Loan applications dated on or after 10/3/2015 must have initial disclosures,

including the Loan Estimate (LE) and “Your Home Toolkit” (Purchases only) dated within 3 days of the application date (In compliance with RESPA)

Settlement Service Provider List must be provided and list any affiliated companies.

1003 Must be dated and signed by Loan Officer and reflect NMLS numbers.

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Change of Circumstance Definition

An extraordinary event beyond the control of any interested party or other unexpected event specific to the borrower or transaction;

Information specific to the borrower or transaction that the creditor relied upon when providing the LE and that was inaccurate or changed after the disclosures were provided;

New information specific to the borrower or transaction that the creditor did not rely on when providing the LE

Per CFPB: “Creditors may only use revised or corrected Loan Estimates when specific

requirements are met. Creditors generally may not issue revisions to Loan Estimates because they later discover technical errors, miscalculations, or underestimations of charges. Creditors are permitted to issue revised Loan Estimates only in certain situations such as when changed circumstances result in increased charged.”

Note: The last revised LE must be issued at least 1 business day (includes Saturday) prior to issuing the CD.

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Closing Disclosure

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Closing Disclosure – Timing

Must be provided to the consumer at least 3 business days before consummation.

Once a CD is provided to the consumer, a revised LE cannot be issued.

Must be delivered at least 3 general business days prior to consummation (calendar days except Sundays and Federal Holidays). Consummation is the date the consumer signs the note and other loan documents.

If a revised CD must be provided, an additional 3 business day waiting period only applies under certain circumstances - see page 14 for guidance.

A CD may not be delivered the same day as an LE is issued.

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Closing Disclosure – Re-disclosure

Pre-consummation:A new 3 business day (Includes Saturday) waiting period applies when there are:

Changes to the loan’s APR; or (increase by more than 0.125%) Changes to the loan product; or The addition of a prepayment penalty

If other types of changes occur, the borrower must receive a corrected CD at or before consummation.

Post-consummation event(s) that would require a new CDExamples:

A recording fee paid by the borrower is different from the amount that was disclosed on the CD (provide within 30 calendar days).

Non-numerical clerical errors and refunds for tolerance violations (provide within 60 calendar days of consummation). Clerical error = doesn’t affect the numerical disclosure and does not affect the timing delivery.

Incorrect settlement service provider listed is OK. Wrong property address is NOT OK (affects the delivery requirement and

is not considered clerical).

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Closing Disclosure – Who must receive the CD?

In rescindable transactions, we require proof that each borrower (including non-borrowing spouses/individuals) have received the CD. The clock starts counting after the last borrower has provided proof of receipt.

In non-rescindable transactions, we require proof that one of the consumers with primary liability on the obligation has received and acknowledged receipt.

Sending the LE is not sufficient proof of receipt – you are required to document the borrower(s) received the CD.

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Closing Disclosure – Document Proof of Receipt

How should Lenders document proof of receipt of the CD?

Evidence of consumer receipt through email acknowledgement.

Evidence of electronic receipt – read receipt.

Signing for a UPS/FedEx package.

Electronic delivery that complies with ESIGN + three business days.

Mailbox rule : Mailing date + three business days.

Mailbox rule will be used if the consumers eConsent was not received prior to delivering the CD.

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Closing Disclosure

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Closing Disclosure – FAQ’s

Does the CD have to be executed by the borrower(s)? Yes, BofI requires the CD to be executed. The “Final” CD must be signed with

closing documents.What if the If the borrower does not acknowledge receipt of the CD?

If the borrower does not acknowledge receipt of the CD there will be a 6 day wait before borrower can sign loan docs. (3 day mail, and 3 day wait)

Can the borrower waive the 3-day waiting period? No, BofI will NOT accept Hardship Letters in lieu of required TRID waiting periods

Who should prepare the CD? The Lender or the Closing Agent can prepare the CD, but the lender is ultimately

responsible. Texas loans require a CD to be prepared by an attorney.

Can a CD be issued instead of an LE if the scheduled close date is less than 4 business days from rate lock date?

This should be an exception not the rule. BofI prefers the borrower to receive a revised Loan Estimate for a rate lock.

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Closing Disclosure – Seller CD

Purchase transactions: the settlement agent is required to provide the seller with the CD reflecting the actual terms of the seller’s transaction.

The settlement agent may provide the seller with a copy of the CD that was provided to the buyer if it also contains information relating to the seller’s transaction.

The settlement agent may provide a separate disclosure to the seller, including only the information applicable to the seller’s transaction from the CD. However, if the seller’s disclosure is provided in a separate document, the settlement agent has to provide the creditor with a copy of the disclosure provided to the seller.

Does the Seller signed CD need to be signed? Yes, the seller signed CD will need to be executed by the sellers.

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0% Tolerance 10% Tolerance No Tolerance

Paid to creditor Required 3rd party services the borrower CAN shop for but DID NOT shop for

Prepaid Interest

Paid to broker Recording fees Property Insurance Premiums

Paid to affiliate Amounts placed into escrow

Required 3rd party services the borrower CANNOT shop for

Required 3rd party services the borrower CAN shop for and DID shop for

Transfer Taxes Non-required 3rd party services

Tolerance Categories - any tolerance cures required at or after closing must be cured by the Correspondent

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Summary

Fully understanding the changes required may involve a review of your existing business processes, as well as the hardware and software that you or other business partners use.

You will find the TILA-RESPA rule on the Bureau’s website at http://www.consumerfinance.gov/regulatory-implementation/tila-respa/

Useful resources related to mortgage rule implementation are also available at http://www.consumerfinance.gov/regulatory-implementation/.

The information provided in this presentation is limited to Bofi’ s policies with respect to the TILA-RESPA integrated disclosure rule. This is not to be considered regulatory compliant and/or legal advice and is subject to change without notice. You are encouraged to reach out to your compliance/legal department for guidance.