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Real Estate Agents and the Closing Disclosure (CD)

December 8, 2015
Real Estate Settlement Procedures Act (RESPA), TRID (TILA-RESPA Integrated Disclosure)

While initial reports indicate that implementation of the new TILA-RESPA Integrated Disclosure (TRID) rule is happening without major disruptions in the mortgage closing process, NAR members have expressed concerns about some lenders/closing agents refusing to distribute the buyers’ Closing Disclosure (CD) information to real estate agents directly.

Real estate agents have been accustomed to receiving a copy of the HUD-1 on behalf of their clients but this may no longer be automatic for the new CD. Lenders are now responsible for providing the CD to borrowers. Many lenders are taking the position that privacy provisions of the Gramm Leach Bliley Act prohibit the sharing of the CD with third parties. NAR is discussing the issue with the Mortgage Bankers Association but many lenders will continue to be cautious in their handling of personal information. Buyers will receive a Closing Disclosure three days before a scheduled closing and they can share a copy with their real estate agent in order to go over the details of the transaction.

Unfortunately, the CD is not a disbursement document, a function that the HUD-1 provided. NAR is discussing with the American Land Title Association (ALTA) about sharing a generic Settlement Statements that closing agents may use to disburse funds from transactions. Prior to TRID implementation, usage rates of these forms among closing agents were approaching 50%. Importantly, the generic ALTA Settlement Statements must be customized to accommodate state real estate laws and requirements.

In neither instance does the new TRID rule govern, or even address the issue of sharing CDs or settlement summaries. State laws, lender and closing official judgements, and local market customs will still play an important role as implementation of TRID continues to evolve.

NAR will continue to engage with industry partners and the CFPB to get more information on protocols for disbursement of the CD to real estate agents. In the interim, real estate agents should ask their buyers to provide them with a copy of the CD.

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