DISCLAIMER The following is provided for informational purposes only and is not purported to be legal advice nor intended to be legally binding on Calyx Technology, Inc., dba Calyx Software. The services of a competent professional should be sought if legal or other specific expert assistance is required.
Perhaps you have heard these words and acronyms without really understanding their meaning or significance. This is a quick overview of terminology the mortgage industry is currently using.
TRID Related Terminology:
- TILA-RESPA Integrated Disclosures: New disclosures are effective. The combination of the Good Faith Estimate (GFE), Truth-in-Lending Statement (TIL) and Settlement Statement (HUD-1).
- GFE & TIL = Loan Estimate (LE)
- TIL & HUD-1 = Closing Disclosure (CD)
- TRID: Acronym for TILA-RESPA Integrated Disclosures
- Loan Estimate: A new initial disclosure which combines the GFE and TIL
- Closing Disclosure: The new disclosure, provided to borrowers prior to closing, combines the TIL and HUD-1 Settlement Statement
- Total Interest Percentage (TIP): The new TILA/RESPA disclosure has a term referred to as TIP. The TIP is the total amount of interest a consumer will pay over the loan term as a percentage of the loan amount. The TIP does not replace the APR. The new disclosures will have both the TIP and APR.
- Buckets: The TRID ruling has new Tolerance Buckets. All disclosed fees fall into one of these buckets:
- 0% Tolerance
- 10% Aggregate increase
- Best information reasonably available
- Collaboration: The action of working with someone to produce or create something. We’re hearing this quite a bit lately because, while the TILA and RESPA information is now combined, the underlying information is often stored in separate systems.
Broker Fees – located on the broker’s loan origination software (LOS) but the lender is responsible for the Loan Estimate
Lender Fees – located on the lender’s LOS and the lender will most likely issue the Loan Estimate
Property Centric fees and charges – are located on the settlement agent’s system, but the lender is responsible for the Closing Disclosure
- Dynamic: The new Loan Estimate and Closing Disclosure are dynamic. The actual forms will be populated based on the loan type.
Only information specific to the loan/loan type being disclosed is displayed on the forms.
- Pre-Application Fees Worksheet: Cannot resemble the Loan Estimate and must have this 12 Point Font disclaimer at the top of the first page: "Your actual rate, payment and costs could be higher: Get an official Loan Estimate before choosing a loan."
- Rounding: All fees on the Loan Estimate are rounded to the nearest dollar. Fees on the Closing Disclosure are also rounded.