An interesting predicament with TRID is the fact that, in the “Rate Lock” section of the Loan Estimate, the following sentence is present:
“All other estimated closing costs expire on X/X/XXXX at X:XX [a.m./p.m.] [time zone].”
This discloses to the borrower that all unlocked costs of the loan will expire at a particular time. The difficulty with this sentence is that it is fairly typical with lock-in agreements to state that any unlocked terms (including costs) will be available until closing or settlement – which may or may not be the same date as disclosed on the Loan Estimate.
We have audited our lock-in agreements and found that only two contain language which may conflict with the Loan Estimate – “DC Lock-In Agreement” (Cx10455) and “VA Lock-In Agreement” (Cx14674). On Cx10455, the following text appears:
“Any terms not locked-in by the Lock-In Agreement are subject to change until the loan is closed at settlement.”
To mitigate the discrepancy, we will be modifying this text so that it will dynamically print the following instead when “TRID” equals “Yes”:
“Any terms not locked-in by the Lock-In Agreement are subject to change until [same date, time, and time zone from the Loan Estimate].”
In regards to Cx14673, it contains the following sentence:
“Any terms not locked-in by this lock-in agreement are subject to change until the loan is closed at settlement.”
Unlike Cx10455, however, this sentence is required to appear on the form by 10 Va. Admin. Code § 5-160-30(B), which states the following (in relevant part):
“If a lock-in agreement is issued . . . it shall . . . include the following:
- A statement that any terms not locked-in by the lock-in agreement are subject to change until the loan is closed at settlement . . .”
Because this sentence is required by state law, it cannot be changed. Rather, clients will need to ensure that, for their Virginia loans, the data entered into the Loan Estimate concerning unlocked costs corresponds with the settlement date.
Changes to Cx10455 will take effect on July 28, 2015. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
July 22, 2015