Expiration Date for Revised Loan Estimates
In this Compliance Clip (video), Adam explains what to do with the expiration date on a revised Loan Estimate after the intent to proceed is received by consumers and provides a background on why there has been confusion in the industry over this minor detail or TRID. If you or your team didn’t catch this change with TRID 2.0 (in 2018), you will want to be sure to catch this video.
Video Transcript
The following is a transcript of this video.
This Compliance Clip is going to talk about the expiration date for a revised Loan Estimate. This is a TRID topic. The question we have is, “How is the expiration date of fees disclosed on a revised Loan Estimate when an applicant already gave their intent to proceed?”
The answer, of course, comes from Regulation Z, but it comes from 1026.37(a)(13) and actually comes from the commentary. Before we dive into that answer, let's talk briefly about the history of the expiration date for fees. You see, when TRID 1.0 first came out, it really wasn't clear on what we're supposed to do for the expiration date for revised Loan Estimates. In fact, the rule was silent. It didn't say anything. So what most of us did is we defaulted to prior HUD guidance. Before TRID was implemented, we went back to the GFE rules, the good faith estimate, and we listened to see what HUD said. And HUD, at that time, for the good faith estimate, told us to list the same expiration date from the original good faith estimate on any revised good faith estimates going forward. It didn't really make sense why we would do that, but that's what HUD said. So a lot of us carried this HUD guidance into TRID 1.0, and we were doing this for the Loan Estimate.
TRID 2.0, that was final as of the fall 2018, told us that on a revised Loan Estimate, when an intent to proceed has been received, what we're supposed to do is leave the expiration date blank. So, when we've received the intent to proceed from the customer and that date has passed, and then we are giving a revised Loan Estimate, on all those revised loan estimates, we leave that expiration date blank. And again, this is the expiration date for the fees. So we leave it blank when the intent to proceed has already been received.
We can see a citation for this in the new comment number 4 to 1026.37(a)(13) that says this, “Once the customer indicates an intent to proceed within the time specified by the creditor under 1026.37(a)(13)(ii), the date and time at which estimated closing costs expire are left blank on any subsequent revised disclosures.” In fact, the preamble to the final rule gives a reasoning for this. It says, “Once the consumer has expressed an intention to proceed, the expiration date is moot for purposes of the Loan Estimate, as the amounts disclosed provide the applicable baseline for the good faith tolerance requirements.” Therefore, you don't need to give a new expiration date going forward because it's now a non-issue.
So revised Loan Estimates should have a blank expiration date when the customer is already given their intent to proceed, anytime you have a revised Loan Estimate going forward. That's all I have for you today in this Compliance Clip.