The Document Chronicles - What Mortgage Lenders Need and Why They Need It
October 21, 2015
Tax Filing Season and Mortgages: What You Need to Know
February 5, 2015
What Story Will Your Credit History Tell?
March 2, 2016
TRID – The Newest Regulation on the Block
June 8, 2015
With the implementation of TRID less than two short months away, mortgage lenders have been sifting through the latest set of regulations from the Consumer Financial Protection Bureau (CFPB) aimed at creating the new and improved TILA RESPA Integrated Disclosure (TRID). Let’s take a look at what role this newest set of disclosures will have for everyone involved.
What is TRID?
Also being coined, “Know Before You Owe,” according to the CFPB, TRID is from a long line of reforms created with the Dodd-Frank Act.
…Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) direct us to publish rules and forms that combine certain disclosures that consumers receive in connection with applying for and closing on a mortgage loan under the Truth in Lending Act (Regulation Z) and the Real Estate Settlement Procedures Act (Regulation X). Consistent with this requirement, we are amending Regulations X and Z to establish new disclosure requirements and forms in Regulation Z for most closed-end consumer credit transactions secured by real property. In addition to combining the existing disclosure requirements and implementing new requirements imposed by the Dodd-Frank Act, the final rule provides extensive guidance regarding compliance with those requirements. (Source: CFPB/TILA RESPA Integrated Disclosure Rule)
Borrowers will receive a Loan Estimate three days after loan application (borrowers currently receive a large packet of disclosures within the same time frame) and the Closing Disclosure, which will be given three days prior to closing. These changes take effect for loan applications submitted on or after August 1, 2015.
What does this mean for Real Estate Agents?
The disclosures themselves are not really new, however the timeline for a borrower receiving the Closing Disclosures may slightly delay closings since they must be delivered three business days prior to closing. Currently, borrowers can review their HUD-1 Settlement Statement in the morning and go to a closing in the afternoon, but TRID will change that with the three-day rule.
What does this mean for Lenders?
The Loan Estimate, which is similar to the disclosures provided once a full loan application has been made, will be required within three days. Also under the new rules, the lender must be the party responsible for preparing the loan disclosures, a task that is usually handled by closing attorneys or title agents.
In summary, the loan disclosures are not new to the industry, TRID is just re-working what was already there. Contact your trusted mortgage loan officer with any questions or concerns you may have during, or about, this process.
TRID Scheduled to Begin on Oct. 3
The CFPB on Tuesday, July 21, 2015, issued a final rule moving the effective date of the TILA-RESPA Integrated Disclosures (TRID) rule to Saturday, October 3, 2015. The June 18, 2015, Primary Post reported that CFPB Director Richard Cordray was proposing the delay because of an administrative error.
The final rule issued today also includes technical corrections to two provisions of TRID.