CFPB Updates TRID FAQ’s Regarding Loan Estimates
The Consumer Financial Protection Bureau (“CFPB”) recently updated its TILA/RESPA Integrated Disclosure (“TRID”) FAQ’s on July 31, 2019 to address questions regarding when a Loan Estimate must be provided to consumers.
Generally, a creditor is responsible for ensuring that a Loan Estimate is delivered to a consumer or placed in the mail to the consumer no later than the third business day after receipt of the consumer’s “application” for a mortgage loan subject to the TRID Rule. An application consists of the submission of six items: consumer’s name, income, social security number to obtain a credit report, property address, estimate of the value of the property and the loan amount sought. If the consumer submits these six pieces of information, the requirement to provide a Loan Estimate is triggered, and the creditor must ensure that the Loan Estimate is delivered or placed in the mail within three business days.
Because the definition of application refers to the ‘‘submission” of the six pieces of information, merely maintaining such information from a previous transaction or business relationship does not constitute receipt of an application (unless the consumer indicates that the information maintained by the creditor should be used as part of an application). Additionally, if a consumer starts filling out a form online, enters the six pieces of information that constitute an application for purposes of the TRID Rule, but then saves the form to complete at a later time, the consumer has not submitted the six pieces of information that constitute an application for purposes of the TRID Rule.
The FAQ’s note that the requirement to provide a Loan Estimate is triggered even when a consumer submits the six pieces of information to obtain a pre-approval or pre-qualification letter. A creditor also cannot require a consumer to provide verifying documents in order to receive a Loan Estimate.