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The Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rules were originally effective on October 3, 2015. Lenders scrambled to master the details of the new disclosures. Construction loans were particularly difficult because of a lack of binding clarification of the requirements. But help arrived.
On July 7, 2017 the Consumer Financial Protection Bureau (CFPB) published final rules to clarify the TRID rules for construction loans. The final rules were effective on October 10, 2017 and compliance was mandatory on October 1, 2018.
On Wednesday, December 18, 2019, the CFPB published two guides on disclosing construction-only and construction-permanent loans with examples based on common questions received by the Bureau. The Combined Guide provides guidance for disclosing the construction and permanent phases together and the Separate Guide provides guidance for disclosing the two phases separately. The Guides include sample forms that demonstrate the proper disclosure of many, but not all, aspects of construction loans. The program materials include samples for those aspects missing from the CFPB guidance.
This two-hour webinar presents the details that are essential to mastering compliance with TRID construction loan rules.
The program and the program materials, which are completely updated for the 2018 and 2019 revisions, provide updated regulatory guidance for construction loans. The program explains coverage and exemption rules and provides section-by-section guidance on completing the Loan Estimate and the Closing Disclosure for the most typical construction loan options. Numerous form samples are provided, including samples recently released by the CFPB. The program provides answers for the many questions bankers have regarding the proper disclosure of construction loans.
Upon completion of the program, participants understand:
- When and why construction loans are covered by the TRID rules;
- How to complete the loan estimate and closing disclosure for:
- Construction only loans
- Combined construction/permanent loans (both one-close and two-close); and
- Permanent financing that replaces construction financing.
- How to properly estimate interest on a construction loan;
- The impact of a construction only loan versus a lot purchase/construction loan;
- When to disclose "Sales Price," "Estimated Value," or "Appraised Value;"
- How to determine the proper "Purpose" of the loan;
- How to properly describe the "Product;"
- The proper disclosure of projected payments;
- How to properly disclose inspection fees;
- How to disclose undisbursed construction funds;
- Completing the "Cash to Close”, “Optional Alternative Cash to Close" and "Cash to Close" in the Borrower's Summary of the Closing Disclosure;
- When the AP Table is needed and how to properly complete it;
- How to complete the "In 5 years" disclosure for short-term construction loans;
- When to include the "60 days prior to consummation" disclosure; and
- Much more.
The program is designed for those seeking answers to questions regarding the proper disclosure of construction loans. It is for everyone involved in the origination of construction loans, those making decisions on construction loan products, compliance staff and auditors.
Questions and Answers