Since October 2015, American homebuyers have learned about TRID (the TILA RESPA Integrated Disclosures), a sweeping revision in the way that mortgage lenders make and close loans with their customers. First, the”Loan Estimate” replaces the old initial Truth-in-Lending disclosure & Good Faith Estimate for most closed-end mortgage loans. What’s more, the “Closing Disclosure” replaces the final Truth-in-Lending disclosure and HUD-1 Settlement Statement for most closed-end mortgage loans.
What Types Of Loans Are NOT Affected By TRID? Home Equity Lines of Credit (HELOCs), reverse mortgages and mortgages secured by a mobile home or dwelling not attached to real property.
What Are The Primary Changes Since the Adoption of TRID?
1. Application Definition – the application is considered received and the clock starts ticking for disclosure delivery when the following six items are received: Name, income, Social Security number, property address, estimated value of the property, and mortgage loan amount sought
2. Timing is Everything- Loan Estimate must be provided: No later than three business days after receiving the application and no later than seven business day before consummation
Closing Disclosure must be received by borrowers no later than three business days before consummation
3. Revisions and corrections “waiting period” requirements: A revised Loan Estimate must be received by the borrower(s) no later than four business days prior to consummation
4. A revised Closing Disclosure must be received by borrower(s) no later than three business days before consummation if the following occurs: APR becomes inaccurate, loan product changes or prepayment penalty is added.
TRID does provide greater transparency in the loan process, which is always a plus. However, the new requirements can and do cause delays in scheduling of closings and settlements. An experienced real estate attorney can help you navigate these changes.
