Source: https://compliance.docutech.com/2018/06/27/trid-2-0-updates-prepaid-interest-payoffs-and-payments-and-monthly-escrow-payment-changes/
Timestamp: 2018-11-19 01:49:22
Document Index: 794472229

Matched Legal Cases: ['§ 1026', '§ 1026', '§ 1026', '§ 1026', '§ 1026', '§ 1026', '§ 1026', '§ 1026', '§ 1026', '§ 1026', '§ 1026']

TRID 2.0 Updates: Prepaid Interest, Payoffs and Payments, and Monthly Escrow Payment Changes - Compliance
06.27.18 • Document Updates
TRID 2.0 Updates: Prepaid Interest, Payoffs and Payments, and Monthly Escrow Payment Changes
We will be making the following changes pursuant to “TRID 2.0” (82 FR 37656 [2017]):
Under “TRID 1.0”, there was a lack of clarity as to how the daily dollar amount for “Prepaid Interest” (“per diem amount”) should be disclosed on the Loan Estimate (“LE”) and Closing Disclosure (“CD”). Dollar amounts could only be rounded if permitted under 12 CFR §§ 1026.37(o)(4)(i) & 1026.38(t)(4)(i), neither of which permitted the per diem amount to be rounded, leaving creditors in a conundrum when the exact per diem interest amount resulted in a disclosure of numerous (if not infinite) decimal places, which could not fit into the area allocated for such disclosure.
TRID 2.0 corrects this issue by amending 12 CFR Pt. 1026, Supp. I, Paragraph 37(o)(4)(i) – 1 to state the following (cited in relevant part):
“. . . The per-diem amount disclosed under § 1026.37(g)(2)(iii) and the monthly amounts for the initial escrow payment at closing disclosed pursuant to § 1026.37(g)(3)(i) through (iii) and (v) do not include partial cents. Dollar amounts are rounded or truncated to the nearest whole cent. For example, under § 1026.37(g)(2)(iii), the creditor discloses per-diem interest of $68.1254 as $68.13 or $68.12. . .” (see 82 FR 37785 [2017])
While we already support this method for the daily amounts for escrow items disclosed in Sections G of the LE and CD, we currently allow creditors the option of choosing how many decimal places to disclose for the per diem amount (with the default being four).
To support this TRID 2.0 change, the following will occur when the “TRID 2.0 Indicator” (FI 118689) equals “Yes”:
If “Prepaid Interest Rounded or Truncated” (FI 121959) equals “Rounded”, the per diem interest amount will be rounded (from the third decimal place) to the nearest cent (note: this will be the default behavior).
If, instead, FI 121959 equals “Truncated”, the per diem interest amount will be truncated to two decimal places.
If the “TRID 2.0 Indicator” is not set (or is set to “No”), the current logic will continue to apply.
Currently, we will print a line item in the alternative “Payoffs and Payments” table when there is both a fee description (which is disclosed in the “To” column) AND a fee amount (disclosed under the “Amount” column).
Since principal reductions may now be disclosed in “Payoffs and Payments” with a “P.O.C.” amount which would disclosed under the “To”, rather than the “Amount”, column (see 12 CFR Pt. 1026, Supp. I, Paragraph 38 – 4; 82 FR 37785 [2017]), we are modifying our logic to print a line item if there is EITHER a fee description OR a fee amount.
Monthly Escrow Payment – Escrow Table
Under TRID 1.0, the amount disclosed in the “Monthly Escrow Payment” row of the “Escrow” table on the CD was meant to match the amount disclosed in the “Estimated Escrow” row of the “Projected Payments Table” for “Year 1”, per the following:
“Estimated costs paid using escrow account funds. The amount the consumer will be required to pay into an escrow account with each periodic payment during the first year after consummation disclosed pursuant to § 1026.38(l)(7)(i)(A)(4) is the amount of estimated escrow payments disclosed pursuant to § 1026.38(c)(1).” (12 CFR Pt. 1026, Supp. I, Paragraph 38[l][7][i][A][4] – 1)
Because mortgage insurance premiums will now be reflected in multiple rows in the “Escrow” table – including the “Monthly Escrow Payment” row (see 82 FR 37743 through 37745 [2017]) – this Comment has been amended to state the following:
“Estimated costs paid using escrow account funds. The amount the consumer will be required to pay into an escrow account with each periodic payment during the first year after consummation disclosed under § 1026.38(l)(7)(i)(A)(4) is equal to the sum of the amount of estimated escrow payments disclosed under § 1026.38(c)(1) (as described in § 1026.37(c)(2)(iii)) and the amount the consumer will be required to pay into an escrow account to pay some or all of the mortgage insurance premiums disclosed under § 1026.38(c)(1) (as described in § 1026.37(c)(2)(ii)).” (12 CFR Pt. 1026, Supp. I, Paragraph 38[l][7][i][A][4] – 1; 82 FR 37790 [2017])
Due to this, when “TRID 2.0 Indicator” (FI 118689) equals “Yes”, we will be printing the value of “Total Monthly Amount” (FI 2008) for this row, rather than the value of “Projected Payment Table – Column 1 – Estimated Escrow Amount” (FI 93309) – which will continue to print when FI 118689 equals “No”.
These changes will take effect on June 30, 2018. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
DR 259486