DI Check Update: Warnings and Errors for Second Lien Loans Exempt from TRID

One of the amendments to the TILA-RESPA Integrated Disclosure Rule (TRID 2.0) allows creditors to exclude recording fees and transfer taxes when determining if the total costs payable by the consumer are less than 1 percent for homebuyer assistance loans partially exempt under Regulation Z (see 12 CFR § 1026.3[h]).  “Total Fees Paid By Borrower Percent of Loan Amount” (FI 101179) had been used in the past to trigger global data integrity checks for loans when “Second Lien Exempt from TRID” (FI 95221) is set to “Yes”.

The “Total Fees Paid By Borrower Percent of Loan Amount” field will continue to be used to trigger data integrity checks for TRID 1.0 loans and loans with application dates before October 1, 2018.  For TRID 2.0 loans and loans with application dates on or after October 1, 2018, “Total Fees Paid By Borrower Minus Taxes and Other Government Fees Percent of Loan Amount” (FI 121945) will be used instead.   Any logic that is in-place for these checks with the date of “10/3/2015” has been completely removed.

Once the edits are in place, the following Warning will display in ConformX if:

• Second Lien Exempt from TRID (FI 95221) is Yes;
• Integrated Disclosure Loan Indicator (FI 82233) is “Yes”;
• Loan Purpose (FI 5991) is not “HELOC”;
• TRID 2.0 Indicator (FI 118689) is not “Yes”;
• Integrated Disclosure Loan Indicator Set Method (FI 99906) is ConformX Rules; and
• Total Fees Paid By Borrower Percent of Loan Amount (FI 101179) is greater than or equal to 1 percent:

WARNING: Borrower paid fees exceed 1% of Loan Amount and therefore this second lien zero interest loan is not considered exempt from TRID under 12 CFR § 1026.3(h). The loan may be exempt from TRID if borrower paid fees are decreased below 1% of Loan Amount.

 This new TRID 2.0 version of the Warning will display in ConformX if:

• Second Lien Exempt from TRID is Yes;
• Integrated Disclosure Loan Indicator is “Yes”;
• Loan Purpose is not “HELOC”;
• TRID 2.0 Indicator is “Yes”;
• Integrated Disclosure Loan Indicator Set Method is “ConformX Rules”; and
• Total Fees Paid By Borrower Minus Taxes and Other Government Fees Percent of Loan Amount (FI 121945) is greater than or equal to 1 percent:

WARNING: Borrower paid fees (excluding taxes and other government fees) exceed 1% of Loan Amount and therefore this second lien zero interest loan is not considered exempt from TRID under 12 CFR § 1026.3(h). The loan may be exempt from TRID if these fees are decreased below 1% of Loan Amount.

The following hard stop data integrity Error will display in ConformX if:

• Second Lien Exempt from TRID is Yes;
• Integrated Disclosure Loan Indicator is “No”;
• Loan Purpose is not “HELOC”;
• Application Date (FI 147) is before 10/1/2018 (or Application Date is empty and Today’s Date is before 10/1/2018);
• Integrated Disclosure Loan Indicator Set Method is “ConformX Rules”; and
• Total Fees Paid By Borrower Percent of Loan Amount is greater than or equal to 1 percent:

ERROR: Borrower paid fees exceed 1% of Loan Amount and therefore this second lien zero interest loan is not considered exempt from TRID under 12 CFR § 1026.3(h). The loan may be exempt from TRID if borrower paid fees are decreased below 1% of Loan Amount. If borrower paid fees will not be lowered below 1%, please contact Support at [SUPPORT NUMBER] to have this loan ran manually.

This new TRID 2.0 version of the Error will display in ConformX if:

• Second Lien Exempt from TRID is Yes;
• Integrated Disclosure Loan Indicator is “No”;
• Loan Purpose is not “HELOC”;
• Application Date (FI 147) is on or after 10/1/2018 (or Application Date is empty and Today’s Date is on or after 10/1/2018);
• Integrated Disclosure Loan Indicator Set Method is “ConformX Rules”; and
• Total Fees Paid By Borrower Minus Taxes and Other Government Fees Percent of Loan Amount is greater than or equal to 1 percent:

ERROR: Borrower paid fees (excluding taxes and other government fees) exceed 1% of Loan Amount and therefore this second lien zero interest loan is not considered exempt from TRID under 12 CFR § 1026.3(h). The loan may be exempt from TRID if these fees are decreased below 1% of Loan Amount. If these fees will not be lowered below 1%, please contact Support at [SUPPORT NUMBER] to have this loan ran manually.

These global data integrity check changes will be in place on 8/25/18.  These changes are currently available on ConformX Stage for testing.  Please note that client-specific customizations may be impacted by these generic modifications. As always, we encourage clients to test these changes. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.

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