On June 23, 2017 we announced the creation of Cx21542, made due to the following example provided by the VA:
“Example 1 (see Exhibit A). The fees and charges shown in this example clearly exceed the allowable one percent flat fee for charges related to the cost of loan origination. Even taking into account the lender and seller credits, the borrower was charged more than one percent by the lender, so it does not conform to 38 C.F.R. 36.4313. The lender will be required to correct the TRID-CD to accurately reflect the lender and/or seller credits in the appropriate columns and/or refund the Veteran through a principal reduction of the loan. In cases that require a principal reduction, the lender must provide verifiable evidence that the principal reduction has occurred and that the Veteran was notified of the principal reduction.” (VA Circ. 26-17-11; emphasis added)
Since TRID 1.0 (78 FR 79730 ) took effect in 2015, there have been lingering questions as to whether and how a principal reduction could be disclosed on the Integrated Disclosures (e.g., see FNMA Ann. SEL-2015-07). Thus, to ensure that a disclosure of the principal reduction was provided to the borrower, Cx21542 was created.
TRID 2.0 (82 FR 37656 ) provides new guidance clarifying that principal reductions should be disclosed on the Closing Disclosure (including an addendum thereto; see 12 CFR Pt. 1026, Supp. I, Paragraph 38 – 4), thus a properly filled out CD fulfills VA’s requirements. However, because there are still some “TRID 1.0” loans within our system, we are configuring Cx21542 to print when “TRID 2.0 Indicator” (FI 118689) equals “No.”
This change will take effect on November 7, 2018. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.