As part of the upcoming TRID changes, when providing a consumer with the new Loan Estimate a Broker, Bank or Lender must also provide a new settlement information booklet known as “Your home loan toolkit” (Toolkit).
CFPB has updated the Settlement Cost Booklet to provide a consumer with more information to help them make better choices about their mortgage, with worksheets and checklists to help guide them through the process.
It seems that the new toolkit might be better suited for use by a consumer before they apply for their mortgage. It provides good information on determining what a consumer can afford, the amount of their down payment, selecting the right loan and the tradeoffs of paying discount points to get a lower rate.
It also clearly explains the closing process and the new Closing Disclosure, which replaces the HUD 1. This is some good stuff, especially for a first-time homebuyer. It is an excellent resource to help guide the borrower through the process to minimize confusion, streamline the process, reduce defects and help get to the closing on time. I recommend that all loan originators read this booklet and become familiar with its content.
This is not just a consumer resource, but one for a lender as well. To aid in branding, CFPB will allow lenders to add their logo to the face of the new toolkit. The CFPB issued specific instructions on how to do so (Instructions). Any lender adding their logo must provide a specific disclaimer in the toolkit (Disclaimer).
The toolkit may (and should) be used by lenders as a training guide for their originators, processors and closers as well. This will help them to better understand what the borrower expects during the process and how to best meet those expectations. Loan Originators may want to use the toolkit for Realtor presentations and when pre-qualifying potential home buyers.
This is one change for the better. A more informed and educated consumer makes for a much better loan applicant. A qualified borrower, serviced by knowledgeable originators, supported by well-trained staff makes for a better manufactured mortgage, with fewer defects and delays. The result is a quality product provided by a quality lender to a satisfied customer. All of which point toward more business and better profits.
Keep the new Toolkit in mind when getting ready for TRID compliance. It will prove to be very valuable. To do any job right, you need the right tools. The toolkit has them.
Go build a better loan.