As you are aware, the TRID Rule will take effect on October 3. Among the new requirements, §1026.19(e)(2)(ii) of Regulation Z will require a disclaimer “[i]f a creditor or other person provides a consumer with a written estimate of terms or costs specific to that consumer” before the consumer receives the loan estimate. Recall that a loan estimate cannot be issued until the customer has submitted an application as defined by §1026.3(ii) of Regulation Z, which consists of the customer’s name, income, social security number, property address, estimated property value, and loan amount sought. The disclaimer must clearly and conspicuously state at the top of the written estimate in 12-point or larger font: “Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan.” This federal requirement will apply to Conditional Qualification Letters and Conditional Approval Letters sent out by mortgage companies under 7 TAC §80.201 and mortgage bankers under 7 TAC §81.201 as these letters are usually generated before consumers have submitted enough information to complete an application under §1026.3(ii) of Regulation Z (e.g., a consumer has not yet identified a property) and each letter contains a written estimate of terms and costs specific to a particular consumer. The Texas Administrative Code allows alteration of the model forms as long as the alternative forms contain all information included on the model forms (7 TAC §80.201; 7 TAC §81.201). Therefore, we recommend adding the mandated federal disclaimer to the top of all Conditional Qualification Letters and Conditional Approval Letters sent to consumers before consumer applications are complete.

Complete Memorandum