Now that TRID (AKA KBYO) has officially launched, it’s time to share the three most popular questions from lenders with respect to closing documents and procedures.
- HOW WILL KNIGHT BARRY DELIVER THE SELLER SIDE OF THE CLOSING STATEMENT?
First, a bit of background. The new TRID rules will likely cause most lenders to deliver the final Closing Disclosure Form (CDF) to the buyer. If you remember back in the old days (pre-October 2015) Knight Barry would often deliver the HUD-1 and call the buyer to walk them through all the calculations. Most lenders have planned to take on that new responsibility. But the lender only has the closing figures for its buyer’s side of the transaction and cannot complete the CDF without all of the seller side calculations made by Knight Barry and the real estate agent. So how does the lender get those seller numbers from Knight Barry so that the calculations can be added to the CDF?
Answer: Knight Barry will deliver the Seller Closing Disclosure Form shown here to the lender at least 10 days prior to the closing so that the lender can deliver the completed CDF to the buyer at least three days prior to the closing. The form we plan to use closely resembles the lender’s CDF, which will assist the lender to populate the seller’s data in the proper places. Note that Knight Barry can provide alternate versions of this form if needed, but we think this version is pretty simple to use.
- HOW WILL KNIGHT BARRY DISCLOSE LICENSING INFORMATION TO THE LENDER?
TRID rules require full contact information for Knight Barry, the buyer’s real estate agent and the seller’s real estate agent be shown on the completed lender CDF. The information includes:
• Real estate broker’s company name, address, license number
• Individual real estate agent’s name, email, phone and license number
• Settlement company (title company) name, address, license number
• Individual closer’s name, email, phone and license number
So how will the lender obtain all those license numbers for the CDF? This seems like a lot of work for the lender!
Answer: Knight Barry will include all this information on the Seller Closing Disclosure Form (shown above) so that the lender does not have to do so. Pretty snazzy huh?
- HOW WILL KNIGHT BARRY DELIVER THE SELLER’S CALCULATIONS TO THE LENDER?
As discussed above, the lender will complete the lender CDF and Knight Barry will often complete the calculations from the seller’s side of the transactions. Also discussed above is the form we intend to send to lenders that contains all of the needed information including licensing. Now comes the question from the lender, “So how do I get all that information into my Loan Origination System?”
Answer: Knight Barry has developed three ways for lenders to get all of the necessary information into its LOS for completion of the lender CDF.
- We give it. You type it. Yuck, we know. It’s certainly the less-techy option on this list. Knight Barry can email or fax the Seller Closing Disclosure (see above form) to the lender and the lender can hand type all of the numbers into their LOS.
- We export it. You import it. If the lender’s LOS is Mismo 3.3 compliant, Knight Barry can export the seller’s calculations into an XML file and email it to the lender. The lender can then import the data directly into their side of the lender’s CDF. This is a one-and-done feature so if any calculations on the seller’s end change, we will need to email the XML file again. This service is expected to be up and running sometimes toward the end of October prior to the anticipated first closings under the new rule.
- Integration and collaboration. Several software companies have created special tools that allow the lender and Knight Barry to share information back and forth during the preparation of the Closing Disclosure Form. When Knight Barry completes the seller’s side calculation, those numbers magically appear on the lender’s CDF. Ok so it’s not magic. But it does require the lender to do a little planning with their LOS vendor. Knight Barry is already up and running with several lenders using this option.
Lenders wishing to take advantage of option 2 or 3 should have their tech nerds talk to the tech nerds at Knight Barry for details.
LASTLY…a reminder… HOW CAN LENDERS DISCLOSE THE PROPER TITLE FEES USING THE NEW WEIRD TRID MATH?
As you may know, disclosing title insurance premiums and closing fees is not very easy and the penalties for getting this part of the Loan Estimate wrong are very unpleasant. So how can a lender get the estimate right?
Answer: Knight Barry created a calculator that shows lenders what to disclose on the Loan Estimate and what will actually appear as a charge on the Closing Disclosure Form. Head on over to www.knightbarry.com and click on the TRID rate calculator and see for yourself how easy Knight Barry made it for you.
We assume there will be many TRID-related questions in the coming weeks. We’re ready to write about all of them. In the meantime if you have any questions please feel free to email firstname.lastname@example.org.