The TILA-RESPA Integrated Disclosure rule (or TRID for short) has been in full effect for just over a month and much like every other change to the mortgage industry, lenders are scrambling to keep up and ensure that they are fully compliant with the new regulations. Luckily for our clients, they have America’s AMC working for them to ensure that they stay as compliant as possible throughout the appraisal process.
So what exactly is TRID?
Before TRID went into effect, lenders used what is known as a “Good Faith Estimate” to provide their borrower with an estimated list of expenses they can expect to be involved in their loan. Now that TRID is in effect, the Good Faith Estimate was replaced with something called a Loan Estimate. With the new TRID rules, the lender has only three (3) days to deliver a Loan Estimate to their borrower.
The new TRID rules classify all loan fees into one of three categories:
- 10% Tolerance
- No Limitation
- Zero Tolerance
10% Tolerance – Fees for services (ie. the appraisal report) can be increased up to 10% if the lender permits the borrower to shop for their own third party service (ie. the AMC).
No Limitation – Fees such as prepaid interest and insurance are able to be increased without limitation.
Zero Tolerance – Fees that are paid to third party service providers (ie. an AMC) that was chosen by the lender are unable to be increased.
What does this have to do with the appraisal process?
Great question. You see, the appraisal fee is required to be built into the Loan Estimate that is provided to the borrower. The catchy part here is that if the lender does not let the borrower obtain their own appraisal report, then the report fees paid to the AMC fall under the Zero Tolerance category in the Loan Estimate. The only time these fees are able to be changed is in what TRID calls a Change In Circumstance.
Changes in circumstance are things such as a change in the loan type, a change in the appraisal type (ie. Single Family to a Multi-Family), or any relevant information provided to the lender by the borrower that was incorrect.
So how does Appraisal Nation combat the Zero Tolerance category?
It’s simply really. The old way that the appraisal process worked before TRID became active went something like this:
Appraisers are no longer able to obtain fee increases if their reasoning for the increase is not considered a Change In Circumstance per-TRID guidelines. However in order to stay compliant with paying our appraisers a Customary & Reasonable Fee for their services while ensuring that our clients are able to provide a proper Loan Estimate within the three day window provided by TRID, we have drafted and created standard nationwide state-by-state pricing for all services we offer.
With our new fee calculator tool (available to all current Appraisal Nation clients), you can now get the fee for your appraisal report before ever submitting the order. Our state of the art tool makes it possible for clients to add and subtract services from their order on the spot. Are you looking for a standard Conventional 1004? No problem. Do you need a rent schedule or maybe a flood certification added on? We have you covered with up-front fees for everything.
If you’re a current Appraisal Nation client and would like access to our new fee calculator, all you need to do is contact your Client Account Representative today.
Not a client? Not a problem.
If you’re ready to take the next step in finding out how Appraisal Nation can help your business stay compliant in the ever changing mortgage industry, contact our sales team today by filling out the following form!