The New TRID - TILA-RESPA Integrated Disclosure
The Consumer Financial Protection Bureau instituted new rules regarding disclosures under the Truth In Lending Act and the Real Estate Settlement Procedure Act that will affect all mortgage applications and real estate settlements. These changes were to take place on August 1, 2015, but were delayed until October 3, 2015 to allow for the industry to be better prepared.
Disclosures that consumer receive in connection with applying for and closing on a mortgage including the Good Faith Estimate, the Truth-In-Lending Statement and the HUD-1 Settlement Statement were merged into the Loan Estimate and Closing Disclosure forms. This means the Loan Estimate must be delivered to the prospective buyer no later than 3 business days after receiving the application. Secondly, the Closing Disclosure must be provided to the buyer a full 3 days prior to the closing, and if there are changes during that 72 hour period, the 3 days may have to start over again and closings may be delayed.
Goals of the Updated TILA-RESPA Integrated Disclosure
These changes will affect all home builders, particularly ones with a lending arm. The new rules are intended to streamline the loan application process, and by making that process easier for consumers to understand by spelling out the most relevant details on one page, including the interest rate of the loan, monthly payment and a list of all closing costs.
The Impact of the TRID Updates for Professionals
According to the National Association of Realtors, NAR Research surveyed members about their awareness and preparation for the new TRID rules and discovered that since implementation of the new rules:
- 10.4% of transactions were delayed, but less than 1% canceled, while the typical delay is 8.8 days
- 54.5% of respondents had problems getting closing documents for transactions and half found errors when they did get access
- REALTORS® were less likely to have access to closing documents in delayed settlements
- Missing concessions and incorrect names or addresses were the most frequently cited errors, but incorrect fees, commissions, and taxes were also reported
- E‐settlement procedures had fewer errors and faster remediation
If you're looking for a fantastic team to help you with your home buying process, shoot us an email. If you have general questions about the new TRID, feel free to post them to our Facebook page or Twitter account. We've also included a couple links below that should help you get a solid understand of the updated TILA-RESPA Integrated Disclosure.
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