The CFPB staff presented an informational webinar on Tuesday, March 1, 2016 to address several issues with the TILA/RESPA Integrated Disclosure (TRID) rule in connection with construction-to-permanent loans. These are loans that have a single closing and include a construction phase and a permanent phase. The presentation on construction lending follows a rather lackluster “fact sheet” covering the same topic on which we have previously written.
The webinar, titled Know Before You Owe Mortgage Disclosure Rule – Construction Lending, focused on issues related to disclosing construction-to-permanent loans in the Loan Estimate, whether the construction and permanent phases are disclosed in a single Loan Estimate or separate Loan Estimates. Specific topics of discussion included, among others:
- The Purpose and Product disclosure requirements;
- Completing the Projected Payments Table, particularly with regard to the interest only payments made during the construction phase, whether a balloon payment must be disclosed at the end of such phase, and situations in which the construction phase is not a whole number of years; and
- The treatment of construction holdbacks.
The staff noted that they received many questions during the presentation that would be logged and that the questions asked would impact future presentations.
The fact that the entire presentation appeared to be scripted word-for-word was interesting considering the fact that the CFPB has refused industry requests to issue informal guidance in writing. If the presentation was in fact so scripted, why the CFPB will not issue a written transcript is puzzling and also frustrating to an industry that has asked for, and deserves, more definitive guidance.