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News & Press: Industry News

TRID Applicable to Assumptions

Tuesday, May 21, 2019  
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A recent CFPB (Consumer Financial Protection Bureau) factsheet answered the question of whether a Loan Estimate and Closing Disclosure are required for assumptions of mortgage loans. The CFPB concluded that Reg Z defined assumptions otherwise subject to TRID required a Loan Estimate and Closing Disclosure based on the remaining obligations. The CFPB provided some specific example relating to the amount financed (remaining principal balance plus accruals) and figuring out the finance charge and APR in an assumption.

The CFPB noted that when a new consumer is added to an existing obligation, the transaction is still a consumer credit transaction subject to Regulation Z, and even if a Loan Estimate and Closing Disclosure are not required, the transaction may require Truth in Lending Act (TILA) or Real Estate Settlement Procedures Act (RESPA) disclosures.

California Land Title Association

1215 K Street #1816 Sacramento, CA 95814-3905
Email:  |  Phone: 916-444-2647  |   Fax: 916-444-2851