What Is TRID and How Does it Affect Realtors?
Oct. 1, 2015, will bring a long-anticipated change to the mortgage process. Whether or not you have heard of TRID, it will impact you and your clients — and it’s coming. TRID, also known as the TILA-RESPA Integrated Disclosure Rule, is aimed toward making mortgages more transparent and easier to understand for consumers.
NEW FORMS are IN!
The Loan Estimate form combines the Good Faith Estimate (GFE) and the Truth in Lending Disclosure into a shorter form that should be easier to understand and will explain the mortgage loan’s key features, costs and risks at the beginning of the mortgage process.
Lenders must provide the Loan Estimate form to consumers within three business days of applying for a loan
Under TRID, a lender cannot impose any fee, except a reasonable fee for obtaining a consumer’s credit report, on a consumer until the consumer has received the loan estimate and has indicated intent to proceed.
This should make it easier for a consumer to shop for and understand interest rates, but it might take lenders longer to preapprove someone because they are going to be extra careful when collecting and reviewing borrower information.
NEW CLOSING DISCLOSURE
The Closing Disclosure form combines the final Truth-In-Lending statement and the HUD-1 settlement statement into a shorter form that provides a detailed account of the entire real estate transaction. The Closing Disclosure form must be provided at least three business days before loan consummation (the time the consumer becomes contractually obligated to the mortgage, which is usually at closing).
This disclosure might transform the closing table from a nightmare experience with piles of documents to review for the first time into a more manageable, slightly bad dream of reviewing the information ahead of time.
Both the Loan Estimate and Closing Disclosure forms can be delivered in person, by mail or electronic delivery.
WHEN IS THIS HAPPENING?
The effective date for new applications that will use the new TRID disclosures is October 3rd. Additionally, this new process won’t impact cash sales, or those financed using HELOCs, so the current processes will still exist as well.
So, prepare yourself and your clients for what is to come, and review your current procedures to ensure your compliance. The accuracy and delivery of the new forms will be critical to ensure the mortgage process is not derailed or delayed, and your clients have a smooth purchase process.
REALTORS!!!! Tell us how you think this can potentially effect your buyers. We love to hear from you! Don’t forget to leave a comment below!