Life of a Real Estate Transaction under the new CFPB. What Does This Really Mean To Me A Relocation Point of View? August 6, 2015

Transcription

1 Life of a Real Estate Transaction under the new CFPB What Does This Really Mean To Me A Relocation Point of View? August 6, 2015

2 Welcome Tine Dickey, CRP/SGMS SVP/Sales Manager Ruth Stolhanske, CRP/GMS SVP/Field Operations Manager 2

3 Housekeeping Technical difficulties? Submit a question This Webinar is being recorded, a link to the recording will be provided to our customers via in the coming weeks. A copy of this presentation and the CRP Recertification Credit Form are posted to our website: 3

4 CFPB, TRID and their Impact on Relocation Transactions Consumer Financial Protection Bureau (CFPB) TILA-RESPA Integrated Disclosure Rule Implementation (TRID) New terminology, forms, work process and timelines October 3, 2015 is the Effective Date of the Integrated Mortgage Disclosures Loan applications dated prior to October 3, 2015, closing must take place on the old forms (GFE, TILA, HUD-1) 4

5 Life of a Real Estate Transaction Application and Loan Estimate What constitutes a Loan Application six pieces of information Applicant Name(s) Applicant Social Security Number(s) Property Address Income Loan Amount Estimated Property Value or Sales Price Accuracy Counts Delivery of Loan Estimate (LE) Provider List Borrower s Intent to Proceed (ITP) 5

6 Life of a Real Estate Transaction Application & Loan Estimate Timeline Application received Consumer Receives LE Sun Mon Tues Wed Thurs Fri Sat 2 3 Application received by creditor Consumer considered to have received the LE LE delivered or mailed Creditor may request verifying information Intent to Proceed must be received by Lender LE Delivered or Mailed Lender Receives ITP 6

7 Life of a Real Estate Transaction Closing, Settlement and the Closing Disclosure (CD) Preparation and delivery of the Borrower s CD Responsibility Compliance with CFPB regulations SSP to provide Borrower s charges days before consummation Closing vs. Consummation What is the Difference? 7

8 Life of a Real Estate Transaction Closing Disclosure Timeline 8

9 Closing Disclosure vs. Settlement Statement Preparation of Seller s CD Signatures on the CD Owner s Title Insurance Premium Simultaneous Issue Rate CFPB Rule: The owner s title insurance premium is calculated by taking the full owner s title insurance premium, adding the simultaneous issuance premium for the lender s coverage, and then deducting the full premium for lender s coverage. $1,000 + $100 $500 = $600 Discounted OP to be shown on CD Seller credit for full or partial premium (Happy to let the computer do the work!) Use of Settlement Statement Destination transactions approving CD or Settlement Statement? 9

10 Closing Disclosure Form Sample... 10

11 ALTA Settlement Statement Form Sample 11

12 Tolerances 12

13 It Won t Be a Perfect World.. Collaboration between Lender, Real Estate Agents, Settlement Service Provider & Relocation Management Companies is Key! 13

14 Collaboration - Things to Consider What has really changed? New forms, work processes and timelines = potential closing delays! Large impact on Lender s Role Lender preparation of CD Lender requirements of SSP s: How/When Assurance of accurate information Timely delivery Lender required web portal/integrated interface SSP s access and understanding Who pays technology fees Ease of Use Refusal to use web portal/integrated interface 14

15 Collaboration - Things to Consider (cont.) Large impact on Lender s Role (cont.) Lender vetting of SSP prior to consummation SSP understanding of lender vetting requirements Potential delay of closing due to vetting process Can a Lender decline an SSP Changes to CD Responsible for revisions Change to fees requires a new CD be delivered at or before closing Trigger for 3 day waiting period Shift of last day of the month frenzy Who When 15

16 Collaboration - Things to Consider (cont.) Other Impacts not borne by the Lender Timing of final walk-throughs Financial concessions can impact CD Contract Negotiations Establishing Closing Date - Best practices Attempt to avoid last day of the month Add an additional 15 days and precede the rate lock expiration SSP s set closing with all parties SSP s familiarity with a particular lender s closing instructions Changing landscape for SSP s New Jersey Size of SSP operation Let the kinks get worked out! 16

17 Fidelity National Title Group Preparation for CFPB Extensive System Modifications Data sharing between SoftPro 360 and Loan Origination Systems Encompass Calyx Real EC s Closing Insight Integration FNTG Customer Web Portal for retail transactions Exceeding ALTA s Recommended Best Practices FNTG Rate Calculator for retail customers 17

18 Fidelity National Title Group Preparation for CFPB (cont.) Training - Employees, Agents, Attorneys Events, Webinars, Online Modules and Documents Production Software Changes Technology Platforms Newsletters and Training Videos Customer Collaboration Lenders, Realtors Workflows, Agreements, Statement of Work Training Meetings and Webinars Online Training Tools, Videos and Collateral Materials 18

19 Settlement Service Provider Preparation for CFPB ALTA s Best Practices 7 Pillars FNTG Agents CPA Firm Best Practices Compliance Benchmarking Best Practices Portfolio Builder System modifications Lender Collaboration Real EC s Closing Insight Lender required web portals/integrated interfaces Settlement Statements required for approval 19

20 What Does This Really Mean to Me? Overall Considerations: Q4 15 and Q1 16 Financial Impact Departure Closing Delays: Increased holding costs Potential Sale fails Destination Closing Delays: Temporary living Storage costs Difficulty in moving up closings due to the CD delivery requirements Impact on Corporate Policy Review Client policies and amend/update to meet new terminology 20

21 What Does This Really Mean to Me? Overall Considerations (cont): Impact on Closing Costs Technology investments made by SSP s Lengthier closing docs lengthier closings Employee Training Broker Network awareness to avoid closing delays Timelines Communication Bills, repair and walk thrus Use of Preferred Lenders National Lenders vs. Transferee selected Lenders Impact to the Closing process 21

22 What Does This Really Mean to Me? Departure Transactions: Client billings and the Settlement Statement Must match disbursement from file Borrower s Election of Lender Potential for: Additional holding costs Delayed proceeds Impact of a delayed Destination Closing in a BVO transaction Destination Transactions: Use of RMC s preferred lender Choice of appropriate loan program Importance of Accuracy in Equity Establish early in process Inaccuracy could trigger amending the LE and/or CD Re-disclosure and the potential for another 3-day waiting period 22

23 23

24 Additional Resources FRSonline: News: Know Before You Close CFPB Readiness Initiative newsletters This Webinar Presentation: Life of a Real Estate Transaction under the new CFPB What Does This Really Mean To Me - a Relocation Point of View Access to the recording of this Webinar Presentation Fidelity National Title Group (FNTG): Five Things You Need to Know Newsletters, timeline, animated videos FNTG Agency: Education and Training Materials CFPB Forms and Samples CFPB Readiness Guides Lender Correspondence Webinars, Animated Videos 24

25 American Land Title Association (ALTA) How is Title Insurance calculated and disclosed on the LE and CD in seller pay scenarios? Tolerances with the TILA-RESPA Integrated Disclosures CFPB TILA-RESPA INTEGRATED DISCLOSURE, Guide to the Loan Estimate and Closing Disclosure forms Loan Estimate Closing Disclosure Sellers Closing Disclosure You can find additional tools and information on regulatory implementation here. 25

26 Disclaimer This document does not represent legal interpretation, guidance or advice. While efforts have been made to ensure accuracy, this presentation is not a substitute for legal advise. Only the rule and its official interpretations can provide complete and definitive information regarding requirements. 26