Wednesday, July 29, 2015

TRID Presentation Powerpoint Slides - July 16, 2015 SRAR Lunch and Learn

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Here is a brief overview of how and why we are at the crossroads of such a dramatic change in our Industry.

As we all know, in the Fall of 2008 our Country suffered a severe financial crisis. We witnessed the fall and closure of many Institutions. There was an overall loss of wealth, which affected companies and individuals, along with serious unemployment. It was understood that large parts of our financial system operated with little to no Oversight.

President Obama signed the Dodd-Frank Act of 2010 to make sure that a crisis like this never happens again and to prevent the excessive risk taking that led to the financial crisis. The law also created a watchdog to prevent the exploitation of Consumers, which they thought would build a safer and more stable financial system, one that provides a robust foundation for lasting economic growth and job creation. This reform is designed to make sure that everyone follows the same set of rules. It demands accountability and responsibility from everyone. Helping Consumers to avoid the payment of hidden fees and penalties, along with loans they cannot ultimately afford. Cracking down on abusive practices in the mortgage industry, making sure Contracts are easier to read so people know what they are signing. Home Buyers will receive more information about the costs, and the risks, so that they can make better financial decisions. This consumer watchdog will be looking out for just regular people as they interact with the financial system.

This Consumer Watchdog organization is now known as the Consumer Financial Protection Bureau, the C.F.P.B., an entity created by the Dodd-Frank Act.

In short, its intent is to lower risk, promote transparency and protect the American public.

While the Dodd Frank Act also affects student loans and investment banking, specific to the mortgage industry, it mandates the combination of TILA and RESPA, the Truth in Lending Act with the Real Estate Settlement Procedures Act, combining the Loan Disclosures and Good Faith Estimates and the HUD1 Settlement Statement disclosure, into a single disclosure. The HUD1 will be replaced by the Closing Disclosure, in most transactions.

Most consumer mortgages are affected by this rule, with the exception of,

    • Home Equity Lines of Credit 
    • Reverse Mortgages 
    • Mortgages secured by a Mobile Home 
    • Commercial Loans 
  • where for the time being, the HUD1 shall continue to be utilized, though I do understand that the CFPB will be working on its replacement in time. 

    With these new regulations also comes a whole new vocabulary of terms. T.R.I.D. is an acronym for TILA RESPA INTEGRATED DISCLOSURES. That’s TILA for the Truth in Lending Act and RESPA for the Real Estate Settlement Procedures Act. 

    The Initial Truth in Lending Statement and Good Faith Estimate shall be replaced by a Loan Estimate. The Final Truth in Lending Statement and the HUD-1 are replaced with a Closing Disclosure, or C.D. as it will be commonly referred as. The regulation requires delivery to the Buyer, now known as the Consumer, three (3) business days prior to signing. (See attached List of New Terms and Acronyms). 

    Lenders must have the following to accept and begin processing a new loan;

    Six (6) items required to issue Loan Estimate:
    1. Consumers Name 
    2. Consumers Income 
    3. Consumers SSN (to obtain credit report) 
    4. Property Address 
    5. Estimated Value of the Property 
    6. Requested Mortgage Loan Amount 

    Some other new Industry terms include:

    • The signing shall be considered the closing and shall now be known as the date of Consummation; Our Lender will now be referred to as the Creditor and our Escrow Agent will now be called a Settlement Provider.
    Also, once the Consumer signs the promissory note and loan documents, he becomes legally obligated to the Creditor. While the date of consummation effectively means date of Closing, there is still some need for clarification on this front as the Lender has not yet funded the loan and the deeds have not yet been recorded.


    • Buyer to begin process well before entering into Contract 
    • Avoid last minute changes which will impact the Closing Disclosure 
    • Disclose to Lender Seller Credits 
    • Disclose to lender any Buyer paid Broker Admin Fees 
    • Comply with City ordinances prior to Appraisal, ie. Smoke detectors, carbon monoxide detectors, water heater strapping ALL to avoid need for Appraiser to return to the property. 
    • HOA Contact information 
    • Obtain HOA Documents before beginning loan process 
    • Buyer paid Termite Inspection/Repairs 
    • Avoid Additional costs at time of Walk Through 
    • Buyer paid Home Warranty 
    • Reimbursement for Broker Paid Costs 

    1. Closings may take longer because of the three (3) business day review periods 
    2. Your contact information and license number must appear on the Closing Disclosure form 
    3. Your Clients may receive multiple Loan Estimates due to: 
      1. Changed Circumstances
      2. Multiple applications for different loan products with the same lender
      3. Multiple applications with different lenders
    4. Clients may receive multiple Closing Disclosures, some with three (3) business day waiting period and some without; 
    5. Some before closing and some after closing 
    6. Buyers lenders title policy will not show separately as a charge 
    7. Last minute changes will impact the Closing Disclosure delivery time, ultimately affecting the date of closing 

    In closing,
    • The new disclosures are intended to simplify the previously used forms. Last-minute concessions, changes to Agreement 
    • Requires Lenders to ensure borrowers have ability to repay their mortgage.
    • Prohibits steering incentives, dual compensation and levels the playing field for qualification and screening standards 
    • Protects Consumers from detrimental actions by mortgage servicers and provides Consumers with Better tools, information and protections for consumers facing foreclosure 
    1. Personal delivery of Closing Disclosure will help to expedite the closing 
    2. Electronic or email delivery are considered “mailbox” delivery. The CD must be sent Six (6) business days prior to Consummation (loan document signing). Mailbox rule gives three (3) business days for delivery, with a three (3) day review period, for a total of Six (6) business days. 

    Keep in mind that the Lenders are being held Legally Responsible for the actions or inactions of their Service Providers where Consumers are harmed as a result of failing to comply with Consumer Financial Law.

    Understanding the Lenders position is important and as Industry Professionals we must manage our expectations and the expectations of our Clients to be realistic so as to avoid disappointment. CFPB imposed Daily penalties $5,000.00 (failure to follow laws), $25,000.00 (gross negligence) , $1,000,000.00 (intentional violations)

    Possible scenarios of delayed closing. 
           Multiple loan Estimates due to: 
      1. changed circumstances 
      2. different loan products (programs) 
      3. applying with different Lenders
    Nationwide Learning Curve

  • New Word for the times! FLEXIBILITY, more so than ever 
  • Include additional wording in Contract allowing for additional time and cooperation of the parties, in the event extension is necessary due to re-disclosure 
  • Not to under estimate time period 
  • Avoid putting Lenders and Mortgage Brokers in a position to fail 
  • Utilize handouts of CFPB Toolkit and Closing Check List

  • ***************************************************************************************************
    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on Facebook, Twitter, LinkedIn, and Google+.


    4/9/15 - The CFPB (Consumer Financial Protection Bureau) has distributed a Home Loan Toolkit which is beneficial to each and every Consumer purchasing a new home with new loan financing. Obtain your Toolkit at

    The Toolkit advertises that after you complete the tools the kit provides you will;

    ~ “know the most important steps you need to take to get the best mortgage for your situation”.
    ~ “better understand your closing costs and what it takes to buy a home”.
    ~ “see a few ways to be a successful homeowner“.

    The following are a list of Sections in the Toolkit which are of interest to all;

    ~ “Choosing the Best Mortgage for You”
    ~ “Your Closing”
    ~ “Owning your Home”

    The CFPB offers a hotline where you can speak to a housing counselor at
    In addition, you can find additional tools and resources at and find answers to common questions at

    Please also feel free to call our Escrow Expert at (818) 838-1831 as we at Sepulveda Escrow are always happy to assist you as well.

    Wishing you all the best in homeownership.

    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.


    4/7/15 - The world as we know it is changing!, That is the Real Estate, Mortgage and Lending Industries will be changing effective August 1, 2015 and it is imperative that we prepare ourselves as much as possible. This will affect your real estate closing time frame and it is best that we plan ahead when preparing your Purchase Contract (and Escrow Instructions).

    Under the new rules of TRID (TILA/RESPA Integrated Disclosure) which the Consumer Financial Protection Bureau (CFPB) has put in place, the Consumer must receive a Closing Disclosure three (3) business days before the consummation date. The referred to consummation date is defined as the date the Consumer signs the new loan documents.

    It is important to be aware that in the event the Buyer, now being called and referred to as “The Consumer”, does not receive the Closing Disclosure within this specific time framework, the closing will be delayed.

    TIP: While we will all be subject to a “learning curve”, it is of the utmost urgency that we do all that we can to prepare as much as possible to avoid complications at closing. While we will have to deal with issues at the time they occur, it may be prudent to incorporate into your Purchase Agreement and Escrow Instructions a provision for an extension to the closing date, due to delays in Buyers receipt of the Closing Disclosure (and prepare the Sellers to be more flexible in regard to the date of closing).

    The good news is that we have the entire country coping simultaneously with the same concerns and issues, which I believe should lend us support while we learn as we go along.

    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.

    Closing your Business Escrow and your State Board of Equalization Release

    3/19/15 - Often closing the escrow on the sale of a Business, with or without a liquor license, can be a lot of work for the Seller due to requirements to close out accounts with governmental agencies. For instance, State Board of Equalization, has a process which is quite involved and requires a minor audit at a minimum and on occasion, a full audit once the Seller has had his last day of business.

    As an escrow holder we work to accommodate the parties and to assist them in moving the process along by submitting, upon opening the escrow, a written Request for Certificate of Payment to the State Board of Equalization, with the intention of beginning the 60 day period as State law allows (though in the event the State Board of Equalization selects the business for Audit, the 60 day period will be adjusted and no longer from date of receipt of the Request for Certificate of Payment).

    Once the Seller has had his last day of business, the State Board of Equalization will require the following (at a minimum);
    1) Return of the Sellers Permit as issued by State Board of Equalization;
    2) Closing Tax Return;
    3) Copies of Sales Tax returns for the last two quarters;
    4) Proof of Payment for the last two quarters;
    5) Copy of Fully Executed Escrow Instructions;
    6) Fully Executed Itemized List of Furnishings, Fixtures and Equipment;
    7) Cashiers Check for the payment of all Sales Taxes due, per the Closing Tax Return;

    Just know that the more you are prepared the less aggravation and frustration you will experience in obtaining the Releases required to close escrow and to achieve the ultimate goal, the receipt of your money from escrow.

    TIP: A personal appearance to State Board of Equalization is preferable to submit all documents and funds to expedite the processing and issuance of the Certificate of Payment. Best to bring a cashiers check for payment and avoid electronic payments at this time to avoid delays and additional time State Board may require to verify payment has been received and applied to the account.

    ADDITIONAL TIP: Bring and leave in the car a box filled with several years of books, records, bank statements, Sales Tax Returns, State and Federal Income Tax Returns etc. when you make your personal appearance to the office of State Board of Equalization. More often than not they will request documents you may not have expected, taking these documents with you in the car will avoid a trip back home and back to their office, which will be a timesaver.

    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.

    Husband and Husband as Joint Tenants?

    11/30/14 - Recently, an Instruction received by this office brought to the surface a matter of which we had never before addressed. Once same sex marriage became legally recognized in the State of California, how does this affect Clients and how they hold title to real property?

    We found this to be a rather interesting question to address as we approached our legal counsel and title officer for guidance and advice.

    Ultimately the question was not as complicated as we thought and the answer was really up to the Client. Did they want to be Husband and Husband as Joint Tenants? Did they still consider one of the couple to be a wife regardless of their sex and prefer to take title as Husband and Wife as Joint Tenants (regardless of both individuals being men)? Of course, while we addressed this concern with Male Clients, obviously the same would apply towards female couples who may choose Wife and Wife as Joint Tenants. All of these were possible options.

    In the end, the vesting our Clients chose contained the couple’s individual names followed by the phrase “who are married to each other as Joint Tenants”. This was the best overall choice and was approved by both Legal Counsel and Title Insurer.

    Frankly, how the Clients would vest once they came into title was the least of their worries. It seems there were potential issues with their loan and the Couple were concerned that they may be experiencing some discrimination due to their relationship status and how it may come into the equation when qualifying for their loan. We were relieved to witness that the Bank treated this couple as any other. Ultimately approving the loan and also allowing the non-qualifying spouse to be on title to the property, as is often the case with conventional marriages.

    The question of same sex relationships and related legal matters continues in my mind. A recent addition to the new loan document package these days is in regard to a declaration of Domestic Partnership. Just as I would imagine laws governing conventional marriages now carry over and apply to same sex marriages, laws pertaining to Domestic Partnerships and (Common Law Marriages, if in fact Common Law Marriages are even recognizable in the State of California any more) also now apply to same sex couples. It is rather interesting to think on the matter. Often times it is a Case tried in a Court of Law which ultimately defines how such concerns affect our society and how if applies to everyday situations. Today this is pertinent as we will find more and more often that these issues come to affect our Clients, our friends and our family members. Again, just something interesting to think about. Have a great day!

    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.

    Termite Inspection and the Sale of Your Condominium or Townhouse

    8/24/14 - When selling your condominium or townhouse a termite inspection may be required. Often times necessary repairs which may appear on a termite report may in fact be the responsibility of the homeowners association, the cost of which you already contribute towards in the payment of your homeowners association dues.

    In a condominium or townhome complex there are common areas and often shared walls with other homeowners. Specific to termite repairs, your dues pay towards necessary repairs to common areas and areas which are external to the home (outside walls), while your dues more often than not does not cover termite damage inside your unit. It is important to know that repairs disclosed on a termite report are not limited to termite infestation. You may find yourself needing to make repairs caused by water damage (dry rot), even if this may have been caused by a neighbor.

    TIP. Contact your Homeowners Association or Management Company and ask for the name of the termite company the complex has used most recently. Ordering your termite report from this company will help to keep your costs down as they will charge the Homeowners Association for any necessary repairs external to your unit and limit your report to the inside walls of your unit only.

    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.

    The Importance of Reviewing Financials of a Homeowners Association

    8/11/14 - In the sale of a condominium or townhouse it is especially important to obtain the most updated version of the documentation from the Homeowners Association (HOA).

    While the cost to obtain these documents may appear to be high, it is important that the Buyer receive these documents for their review and approval. This ultimately protects all parties from any possible future concerns or issues which may arise after the close of escrow.

    The HOA package will include the CC&R’s (Covenants, Conditions and Restrictions) filed against the property, the Articles of Incorporation of the complex, its Bylaws, Rules and Regulations, Budget, Minutes of Board Meetings and the Financials.

    In today’s economic environment it is especially important to carefully review the Financials of the Homeowners Association, which will indicate the financial strength of the Homeowners Association and its ability to maintain and pay its overhead. The HOA’s ability to pay insurance policy premiums, utilities for common areas, etc. plays a key role in determining whether this complex is right for you (and whether your new Lender will also find this complex a good investment to make a loan on.)

    TIP. When reviewing the financials of a Homeowners Association it is imperative to determine whether there are any units which are delinquent in paying their HOA Dues (or units in foreclosure). Paying close attention to how many months any particular unit is behind in their payments (and especially the total amount of units in arrears as well as the cumulative amount of the combined unpaid HOA Dues) is of significant importance when considering a purchase in any particular complex. Unpaid dues can place an unwelcome financial burden on the rest of the homeowners.

    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.

    Negotiations Between Seller and Buyer

    7/31/14 - Negotiations between Sellers and Buyers can extend beyond a sales price, and can be advantageous for both (or either) sides.

    It’s an interesting fact that while there are certain costs and charges to escrow which are customarily paid for by the Seller and by the Buyer, the payment of all costs and charges in a transaction are negotiable.

    Often times success at negotiating may depend on how motivated the parties are. For example, a Seller of real estate may be willing to pay some of the Buyers closing costs because he is very motivated to sell his property. Every day he retains the property may be costing him money, especially if the property is vacant. Offering a concession to the Buyer may enable a quick sale and in the end be in his/her best interest. This closing cost credit can also help the Buyer to come in with less money to make their purchase and to help them to obtain necessary financing. In the end, everyone wins!

    TIP. It may be possible to increase the sales price to offset the burden of cost to the Seller on the payment of Buyers closing costs. This is usually done as a credit to Buyer towards Buyers non-recurring and recurring closing costs. Consult with your Real Estate professional who knows the current real estate market and can access the comparable values of properties in the area which will help to determine if the value of the property will allow an increase in the sales price.

    Something to keep in mind when negotiating your next sale or purchase.

    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.

    Brochure - Your Escrow and You

    7/9/14 - Here is a very informative paper as originally released by the Escrow Institute of California many years back and which continues to be relevant today.

    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.

    Opening Escrow

    6/28/14 - It is very important to only open escrow AFTER all terms of the transaction have been agreed upon by Seller and Buyer.

    Whether working with a Real Estate Agent or the Sale is negotiated directly with the Owner, often referred to as a For Sale by Owner (FSBO), it is very important to discuss and agree upon all terms before opening escrow, specifically so Seller and Buyer will not have to negotiate on additional matters after they have signed escrow instructions.

    It is important to understand that escrow instructions are a legal binding agreement which can only be changed or amended if the Seller and Buyer both agree on the exact changes. Avoiding disagreements is very important. Doing so will help close your deal as planned, so everyone wins!

    Obviously there are times further negotiation cannot be avoided, due to perhaps something unexpected, though once again always best to make every effort to anticipate as much as possible ahead of time and use the Agreement to fall back on.

    TIP. Before signing a Purchase Contract, Agreement or Escrow Instructions go over the documents with your Real Estate Agent, Lawyer or Escrow Officer. While your Escrow Officer cannot give you legal advice, they very well may notice a problem in your Agreement which they can bring to your attention and give you the chance to talk about it with the other party before you sign Agreements to open escrow and obligate yourself to the legal and financial commitment called for.

    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.

    What is Escrow?

    6/21/14 - An Escrow can be used for many different reasons.

    An Escrow holder, sometimes referred to as a Settlement or Closing Agent, depending on what part of the country you are in, holds Written Agreements, Documents and Monies, which are only released when all terms of the Written Agreement have been complied with.

    Agreements and Instructions in Escrow must be mutually agreed upon by all parties (Seller and Buyer), otherwise an Escrow Holder simply continues to hold documents and funds until mutually signed Agreements are received.

    TIP: It is always best to have all agreements documented from the very beginning rather than change the agreements during the escrow. It is possible that later the Seller and Buyer may not agree on the matter which can create problems with moving forward to close the deal. This should be avoided at all costs!

    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on Facebook, Twitter, LinkedIn, and Google+.



    Super excited to begin the adventure of blogging!

    My objective is to impart information to the public on the subject of Escrow and as it relates to the sale of Real Estate, Businesses and Liquor License Transfers.

    My hope is to provide interesting and relevant content which I intend to keep concise and abbreviated so as not to bore the reader.

    Ask our Escrow Expert! Please call Sepulveda Escrow Corporation at (818) 838-1831

    Please visit our website at for additional information.

    Thank you!

    Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.