January 13, 2016
Clients and Friends,
I am writing to let you know that yesterday the CFPB issued a “fact sheet” regarding construction loans under TRID. You can find it here: http://files.consumerfinance.gov/f/201601_cfpb_know-before-you-owe-mortgage-disclosures-and-construction-loans.pdf
This fact sheet does not provide any new information regarding completion of the TRID disclosures for construction loans. It restates the applicability of TRID to construction loans, and the provisions of TRID and existing Regulation Z that are particular to construction loans. The only interesting part is this line at the end:
“The Bureau is considering additional guidance to facilitate compliance with the Know Before You Owe mortgage disclosure rule, including possibly a webinar on construction loan disclosures.”
I believe it is likely the CFPB will issue additional construction loan guidance in a webinar at some point in the future, because it is unlikely they would make such a statement without a plan in place to provide this guidance. Unfortunately, they did not address the timeframe for this guidance in the fact sheet. And the fact sheet does not state whether this guidance will include additional sample disclosures, which has been one of the major requests of industry.
Although there is confusion about completing the TRID disclosures for construction loans, it is certainly possible to disclose construction and construction-to-permanent transactions under TRID. I have assisted a number of lenders with this already. If you would like any assistance, please let me know.