Identify the unresolved (or improperly resolved) TRID violation that occurred in the case study. Lana and Vien Tran are purchasing a home for an agreed sales price of $155,440. The... Identify the unresolved (or improperly resolved) TRID violation that occurred in the case study. Lana and Vien Tran are purchasing a home for an agreed sales price of $155,440. They have applied for an FHA loan with maximum financing. Making the 3.5% down payment, then rolling in the $1,115 in allowable closing cost and up-front MI of 1.75% makes their loan amount $153,759. A few days before closing, the Tran's were reviewing the Closing Disclosure and noticed the APR was higher than the APR on the LE by 0.253 percent. The originally disclosed APR was calculated based on the twenty-year loan that the Trans had originally requested. Several weeks before the scheduled closing, the Trans had advised the loan officer that they had changed their minds and now wanted a thirty-year loan. The original prepaid finance charges (closing cost finance charges) originally totaled $1,400 because the loan originator had estimated the lender’s underwriting fee to be $800 but the final charge was $875. The original APR stated on the LE was 5.173 based on a twenty-year term at a 4.750 note rate. The final APR stated on the CD was 5.426 based on a thirty-year term at a 4.875 note rate. The final total of prepaid finance charges, points, and fees was $1,475. Vien Tran called the lending officer, who explained what happened. The Tran's were satisfied with the explanation, and the loan closing went as scheduled.
Understand the Problem
The question is asking to identify and analyze an unresolved or improperly resolved TRID (TILA-RESPA Integrated Disclosure) violation in the provided case study related to a real estate transaction, focusing on the discrepancies in APR and finance charges due to a change in loan terms.
Answer
Failure to issue a revised LE for changed loan term, causing APR discrepancy.
The unresolved TRID violation is the failure to issue a revised Loan Estimate (LE) when the loan terms changed from a twenty-year to a thirty-year term, resulting in a different APR.
Answer for screen readers
The unresolved TRID violation is the failure to issue a revised Loan Estimate (LE) when the loan terms changed from a twenty-year to a thirty-year term, resulting in a different APR.
More Information
The TRID rule mandates that lenders must issue a new Loan Estimate within three business days if a consumer requests changes that affect loan terms before clinching. Not issuing this can lead to compliance issues and consumer misunderstandings.
Tips
One common mistake is assuming that if consumers are satisfied with explanations, formal TRID updates aren't necessary, which can lead to compliance issues.
AI-generated content may contain errors. Please verify critical information
