news.cuna.org/articles/109652-trid-construction-loan-questions-answered-in-webinar

TRID construction loan questions answered in webinar

March 2, 2016

WASHINGTON (3/2/16)--Questions on how construction lending fits in the Consumer Financial Protection Bureau’s (CFPB) new mortgage disclosure rule were the topic of discussion of a webinar hosted by the bureau Tuesday.

The recording of the webinar, including the PDF slide presentation, is available here.

Construction loans covered under the Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosure (TRID) rule are defined as “closed-end consumer credit transactions secured by real property.”

According to the bureau, disclosure requirements, guidance and implementation materials generally apply to covered construction loans, even if the guidance isn’t directly on construction loans.

Some of the questions asked (and answered) during the webinar included:

  • What options does a creditor have for disclosing construction loans?
     
  • What does a creditor disclose as the product if a construction-to-permanent loan disclosed in a single set of disclosures has different fixed rates for the construction and permanent phases?
     
  • How does the creditor calculate the initial payment for the construction phase?
     
  • If the creditor is using a separate set of disclosures for the construction phase, what amount does the creditor disclose as the balloon payment in the loan terms table?

The CFPB’s TRID rule became effective in October, and the bureau has posted a number of webinars and implementation resources online.