Under TRID, Can A Lender Review Loan Documents Prior to Issuing a Loan Estimate?

As part of the implementation of the final rules of the Dodd-Frank Act, one of the most contested issues regarding the changes under the Truth-In-Lending and Real Estate Settlement and Procedures Act  Integration Disclosure (aka TRID) is the question of whether or not a lender can review loan documents prior to issuing a Loan Estimate. The Consumer Financial Protection Bureau has issued clarification on this and many other questions that lenders, realtors, closing agents, and borrowers have through the Federal Reserve System’s audio conference series on consumer compliance issues that can be found here:  Index of TRID Questions Addressed During Webinars-2.

The short answer to the above question is yes.  A lender CAN review loan documents prior to issuing a Loan Estimate if the borrower volunteers the information.

Borrowers:  When shopping for a home loan, ask your loan officer for a Pre-Application Cost Estimate for any loan program you wish to consider.  This is non-binding to the lender and allows you to view different options prior to deciding which loan program, rate, and terms are best for you.  Information quoted is based on many assumptions including:  loan amount, intended occupancy, credit score, property type, valuation, timing of rate lock, and whether or not your debt-to-income ratio falls under 43%.  Changes to any of these assumptions may result in changes to quoted terms or access to loan programs.

Lenders:  If you haven’t programmed Pre-Application Cost Estimates for your loan officers to assist borrowers in their selection process, you’re behind the 8-ball and may be exposing yourself to unnecessary compliance and fair lending risks.   Also, take a moment and remember when you were buying your first home.  Didn’t you want to see all the closing costs in writing before you made your buying decision?  Before you gave a stranger your social security number?   Allow your LOs to provide the proper tools for borrower decisioning and train your LOs to go over the above mentioned assumptions.  With a clear explanation of risks, an educated borrower will appreciate the lesson and identify you’ve earned their business.

Sylvia M. Gutiérrez is author of Mortgage Matters: Demystifying the Loan Approval Maze. RealWorks Press: 2015. Available at Amazon, Barnes & Noble, iTunes, and independent booksellers everywhere. Distributed by Ingram.
Licensed and registered mortgage loan officer with NMLS id: 372427
Diversity & Inclusion Co-chair, NAMB – Association of Mortgage Professionals
Government Affairs Chair, South Florida Mortgage Bankers Association
Associate Member, National Association of Real Estate Editors

6 Things Great Presenters Do Very Well

Fear of public speaking is the most common of all phobias. It’s a form of performance anxiety where a person becomes very concerned they’ll look visibly anxious. Because we are all—at some point—required to speak to more than three people at once, I thought I’d share some of the things that have stuck with me that great presenters do consistently.

  1. Be Positive. No matter what horrible industry changes are coming up or grave statistics are being shared, great presenters always deliver the news with a positive spin.
  2. Have an Agenda. They know what they are going to talk about in advance so if they lose their place (as sometimes we humans do) they easily find their way back.
  3. Blow off Gaffs. Shit happens. Great presenters don’t let themselves get all flustered when something goes wrong. They laugh at themselves when they trip over a cord or make light of the projector that just blew out a bulb to which they have no replacement. No sweat. They improvise and move the presentation forward.
  4. Stay on Topic. Now here’s one that can be a little bit tricky. Great presenters want their audience to stay engaged and they’ll throw out a topical question here and there to make sure everyone’s on the same page and that’s ok. But taking an audience members question mid-presentation can ruin their creditability and here’s how. The audience member usually has a very specific question to ask and is rushing through it because they are probably a little bit nervous about speaking publicly so they leave out important context. Without proper context, a presenter may inadvertently provide an incorrect answer and lose the attention of the rest of the audience. A great presenter will defer all questions to the end and for those that require more context, take them offline.
  5. Follow-up. People don’t carry encyclopedias in their head. Sometimes, a valid question requires some thinking. Great presenters will tell the audience member just that, and then, they actually follow-up.
  6. Request Feedback. Great presenters welcome feedback. As a matter of fact, they highly value constructive feedback. If they were great, tell them what about their presentation had you engaged. If you felt the presentation was a waste of your time, tell them how the information they presented differed from what you were sold.

 

Sylvia M. Gutiérrez is author of Mortgage Matters: Demystifying the Loan Approval Maze. RealWorks Press: 2015. Available at Amazon, Barnes & Noble, iTunes, and independent booksellers everywhere. Distributed by Ingram.
Licensed and registered mortgage loan officer with NMLS id: 372427
Diversity & Inclusion Co-chair, NAMB – Association of Mortgage Professionals
Government Affairs Chair, South Florida Mortgage Bankers Association
Associate Member, National Association of Real Estate Editors

7 Ways to Get from Contract to Closing Faster

Beginning October 3rd, they’ll be a new sheriff in town and his name is TRID. Who is TRID and why do you need to know his role?   The Truth-in-Lending Act and the Real Estate Settlement and Procedures Act are being integrated into new loan disclosures and updated timing requirements so borrowers will be better prepared for mortgage loan closing by having three business days to look at the final closing costs on their real estate transaction.

 

This transparency is awesome for the housing market.

 

But in an industry where timing is everything, loan execution (the amount of time it takes from loan application to loan funding) is being compressed. The TILA/RESPA Integration rule is making realtors, lenders, and closing agents work more cooperatively to ensure you get to close on your new home by contract closing date. Here are 7 things buyers, sellers, realtors, lenders, and closing agents can do to support an effortless transition into this new landscape.

 

  1. Buyers: Get your financial house in order. Having organized and current financial records scanned into PDF format is a critical necessity in today’s digital world.
  2. Sellers: Have a home inspection completed before you list your property for sale and repair the nuances that will delay a buyer from closing on their loan.
  3. Realtors: Be sure to maintain solid connections with at least four different mortgage professionals representing the different mortgage origination options. You’ll need one of each from: a major bank, a community bank, a nonbank lender, and a mortgage broker.   Not all loan programs are built the same and buyers rely on you for recommendations to lenders who can work with their particular situation.
  4. Closing agents: Get your lien searches done early on and issue title commitments as quickly as possible. Don’t ruin your reputation by holding off until a lender’s loan commitment is issued. Invest in your business and avoid critical delays.
  5. Have a 360-degree view of your transaction on a weekly basis to include the buyer, realtor, lender, and closing agent to ensure everyone is on task and to address any potential issues as they arise. I would venture to say that most everyone has some sort of smartphone or tablet they touch over 25 times in a day. Manage expectations by using the Tasks, Notes, and Events features to track interactions at every point in loan execution.  Maintain the target dates and never let a deal lose momentum.
  6. Before writing a condominium purchase offer that is subject to VA or FHA financing, be sure to check if the condominium project is eligible for VA or FHA financing.
  7. Buying a property in an area that is governed by a homeowner’s association? Be sure to review the financial soundness of the association as this will impact which loan programs your eligible to receive and may impact the long-term appreciation of your investment.  Have the association complete the HOA Project Questionnaire as soon as possible and deliver it along with the requested project financial documentation to the lender.

 

Sylvia M. Gutiérrez is author of Mortgage Matters: Demystifying the Loan Approval Maze. RealWorks Press: 2015. Available at Amazon, Barnes & Noble, iTunes, and independent booksellers everywhere. Distributed by Ingram.

Licensed and registered mortgage loan officer with NMLS id: 372427
Diversity & Inclusion Co-chair, NAMB – Association of Mortgage Professionals
Government Affairs Chair, South Florida Mortgage Bankers Association
Associate Member, National Association of Real Estate Editors