“One of these reasons is that the preamble states that the CFPB deems it necessary to retain the seller`s final disclosure and auditors will expect to see it in the lender`s file,” Horn added. “This responsibility means that the accuracy of the seller`s closing costs and other information that must appear on the borrower`s and seller`s closing disclosures should be of concern to lenders,” Horn said. “Both disclosures must also be consistent with other ALTA settlement statements or payment documents used by the settlement agent.” “In all cases, the seller information must be provided to the lender under the TRID rule,” Horn said. `Either the seller`s information is included in the borrower`s final statement or it is made available to the creditor in the form of a copy of the seller`s final statement.` In addition, lenders should obtain the seller`s closing disclosure to verify the accuracy of the seller information they are required to disclose, Horn said. Most of the information is identical between the borrower`s and the seller`s CDs (see note 38(j)-3 for a list of this information). For example, much of the information between paragraphs 1026.38(j) and (k) is identical. The seller`s closing disclosure can help verify the borrower`s closing disclosure information for which the lender is responsible under the TRID. However, the fact is that under the title of the TRID, settlement agents must provide the seller`s information to the lender. TRID allows information about the seller to be provided in the borrower`s closing statement or in a separate version of the seller`s closing statement that is not provided to the buyer. In particular, Section 1026.38(t)(5)(v) and (vi) allows for the separation of borrower and seller information into separate closing information for confidentiality reasons. Not only do lenders have to receive the closing disclosure from the seller, but they are required to keep this document from the CFPB. The auditors expect to see this document in the lender`s file. Since the introduction of the TILA RESPA integrated disclosure rule, real estate professionals still have difficulty interpreting and adopting certain aspects of the new law.

It was particularly difficult to understand the new rules on the sharing and disclosure of private non-public information (NPIs) of consumers involved in the transaction. As you may have seen in our blog post earlier this week, real estate agents often encounter obstacles when trying to access their clients` closing documents to verify their accuracy. The reason for this is that TRID is much stricter when it comes to allowing external parties to see the NPI of buyers and sellers. However, buyers have the option to give their real estate agents access to their closing documents simply by filling out an information release form. While TRID technically does not impose a confirmation requirement on the lender to receive the seller`s closing disclosure, Horn stated that there are reasons why settlement agents should provide the lender with the seller`s closing disclosure. On the other side of this problem are lenders who give mortgages to buyers. According to TRID, these lenders must see the seller`s closing disclosure in addition to that of the buyer to ensure that the information in both documents matches. Despite this, lenders have sometimes struggled to get closing disclosure from the seller. Some title and settlement agents refuse to disclose vendor information because they mistakenly believe that TRRID prohibits lenders from accessing it. In this balanced approach, a lender will deal with glaring or repeated errors on a case-by-case basis. And in really extreme circumstances, which I wouldn`t expect in practice, that lender`s official policy would be to suspend business with a fence agent. (This is in contrast to the first approach, where the lender`s response to a regulator would be, “That`s not our concern.

There is nothing that a closing agent can do with respect to these disclosures from sellers that would cause us to stop doing business with them. The TRID rule allows information about the seller to be provided in the borrower`s final disclosure or in a separate document that is not provided to the borrower. According to Horn, Section 1026.38(t)(5)(v) and (vi) allows for the separation of borrower and seller information into separate closing information for confidentiality reasons. It notes that this does not apply to the seller`s closing costs, which must appear in the borrower`s final disclosure. The separate closing information provided to the seller can be either standard closing information, which leaves the borrower`s information blank, or a separate seller-specific format of the final information, which is typically provided. Section 1026.19(f)(4)(iv) of the TRID requires settlement agents to provide the lender with a copy of the seller`s final disclosure if the information is provided separately between the borrower and the seller in accordance with section 1026.38(t)(5)(v) and (vi). Federal data protection requirements under the Gramm-Leach Bliley Act (GLB) allow disclosure of NPI as required by law. GLB states that it does not prohibit disclosure “to comply with federal, state, or local laws, rules, and other legal requirements.” (15 USC 6802(e)(8)). CFPB Rule P provides the same exemption for the disclosure of NPIs (12 CFR 1016.15(a)(7)(i)).

Lenders need information about the seller to verify the accuracy of the borrower`s final disclosure, both for audit purposes and for investors who can purchase an interest in the mortgage. Due to privacy concerns when sharing non-public personal data, lenders have difficulty obtaining seller information from title and settlement agents. Under the TRID, however, title and settlement agents must provide the lender`s information to the lender, according to Richard Horn, the former CFPB lawyer who led the closing rule and design of the TRID form and has since founded the law firm Richard Horn Legal PLLC. Because lenders are responsible under TRID for the accuracy of the information contained in the final disclosure, they use the seller`s copy of the final disclosure to verify this information between versions of the seller`s and buyer`s document. They must also match any other ALTA settlement statement or payment document used by the clearing house. `However, the mere fact that a supervised bank or non-bank enters into a business relationship with a service provider does not relieve the supervised bank or non-bank of its responsibility for compliance with the Federal Consumer Credit Act for the prevention of consumer harm. A service provider that is not aware of the legal requirements applicable to the products or services offered, or that does not make the effort to implement those requirements carefully and effectively, or that has weak internal controls, may harm consumers and increase the potential liability of both the service provider and the company with which it has a business relationship, create. Contact ALTA at 202-296-3671 or communications@alta.org. Let`s start with the regulatory language. All the regulation says is that “the settlement agent must provide the [vendor`s disclosure].” It also requires the lender to retrieve a copy of the seller`s CD. See TILA 1026.19(f)(4). In this approach, the lender considers itself directly responsible for compliance by one of its selected suppliers.

Here, the lender will closely monitor the compliance of the seller`s CDs and require fencers to correct any errors found. To go further, this lender might even need the ability to approve the seller`s CD before closing. Hopefully, this “scorched earth” policy will lead to better performance once agents get used to your expectations, but you`ll probably need to develop a process for this as it`s going to be a lot of work! Here, the lender does not consider itself directly responsible for the seller`s CD, but takes reasonable precautions in monitoring the compliance responsibilities of its fencers. Here, the lender will sometimes pass on clues about mistakes, but will not spend too much effort. This lender can (but cannot) verify a percentage of the seller`s CDs and will not ignore serious errors they otherwise find.