Given the availability of public records information from third-party data providers, this is more than enough time to arrive at a functional estimate that will meet the CFPB’s standard for property tax disclosures. Under TRID guidelines, lenders have three days in which to complete the Loan Estimate.

While this is not yet a specific requirement of TRID, it is a best practice, and it should be a standard the industry is working toward.Īt a minimum, lenders should be utilizing a combination of technology and data to access the best public tax information reasonably available. Lenders today already have the opportunity to partner with data providers that can facilitate access to fast, accurate tax data on nearly every property from every collecting agency in the United States. There must be a firm foundation to a lender’s estimate, and it was conveyed that the best foundation is public records. However, the CFPB representatives were specific in calling out the practice of guessing property taxes or entering a zero amount on the Loan Estimate and updating it later as being in violation of both the spirit and the letter of TRID requirements. Since there has been little formal guidance provided to the mortgage industry by the CFPB, many industry participants have had to rely on these webinars to get clarification into the requirements.ĭuring the April webinar, CFPB representatives stated that lenders estimating a borrower’s property taxes for the Loan Estimate must use the “best information reasonably available.” To some, that might seem, at best, a general, interpretive standard. In April of this year, the Consumer Financial Protection Bureau hosted a webinar during which its representatives set out to clarify many of the specific loan estimate requirements of TRID, including those related to property taxes. While the mortgage industry may have been able to proceed for decades without a unified standard for property tax disclosures, and used a variety of ways to calculate the amounts for initial estimates, that’s just not sufficient any longer. Needless to say, post-TILA-RESPA Integrated Disclosure, we’re in a completely different world when it comes to providing timely and – more importantly – accurate information to borrowers. And, many have disclosed zero amounts on the GFE with the intent of updating the information prior to closing. Still others have had their staff visit or call local tax agencies to gather the necessary information.

Others have used third-party resources to obtain property information and then generate estimates from that data. Some lenders have approximated the amount based upon their knowledge of the local area where the property is located. Historically, mortgage loan originators have used a variety of methods to estimate property taxes when preparing a Good Faith Estimate.

Trid guidelines for closing disclosures