TRID Guidelines: What’s Covered?
If you are new to lending and TRID (TILA-RESPA integrated disclosure) compliance, it can feel quite overwhelming. There’s a lot to learn and there are a lot of ways to mess up. So, where do you begin? First, you need to understand which loans are covered by the TRID requirements. That might seem pretty simple, but it can trip up even the most-seasoned lenders from time to time. Jerod talks more about TRID coverage in the video below. Make sure to check it out.
Jerod explains what’s covered and what’s not in the video.
TRID Coverage Video Transcript:
Let’s talk about TRID coverage. From an ingredient standpoint, when do I have a TRID covered transaction? You need three things. We’ll start with that consumer purpose. So we’re looking at that rectangular box there on page 2. Back on page 1, we defined what that was, natural person, and it’s for personal family or household purposes. So I’ve got to have that. Then I’ve got to have a closed-end transaction. What’s that mean? If you’re familiar with credit cards, if you have a credit card, you can buy things on the credit card, you’ve got a credit limit, and then you draw those funds from the credit card to pay for things, and then you pay your balance off and then you can draw those funds again. That’s a revolving credit. That’s an open end. That’s not what we’re talking about.
We’re talking about closed-in. You can borrow the money one time, but you don’t get to readvance after you pay that portion back. So I got to have consumer purpose and I’ve got to have closed in. The third thing I simply have to have dirt referred to as real property that secures my transaction. Get the bowl out, throw those three ingredients in, they’re all present. You have a TRID covered transaction.
Now, one of the misconceptions here with the ingredients is that dirt. The misconception is this is about dwelling-covered transactions. No, it just happens to be that dwellings exist on dirt. That’s where we build them. But if you have just dirt and the other two ingredients are present, that’s also covered. So a loan that’s consumer purpose, closed in, secured by 10 acres of bare ground would be covered by TRID, even though there’s no dwelling on that property, so don’t have to have a dwelling.
Published
2021/12/21
Jerod Moyer
Jerod is the leader of Banker’s Compliance Consulting’s training productions. He is a nationally recognized speaker. Whether it’s a conference, seminar, school, webinar or luncheon, it’s easy to stay engaged when he presents due to the amount of passion and energy he brings to each and every compliance topic. Jerod has spoken on behalf of the American Bankers’ Association, BankersOnline, many state banking associations, private compliance groups and financial institutions. He is a Certified Regulatory Compliance Manager (CRCM) and BankersOnline Guru. Jerod likes to spend his time (between reading regulations and producing compliance training!) relaxing at the lake with his wife and three children, following their activities or engaged in something sports-related!