– The Alphabet Soup of TRID, The TILA/RESPA Integrated Disclosure –
The following is a guest post courtesy of Court Crofoot of AmeriPro Home Loans in Scottsdale, Arizona.
TRID officially rolled out for all new home loan applications starting on Monday, October 3rd, 2015
Well friends it’s finally upon us! TRID officially rolled out for all new home loan applications starting on Monday, October 3rd, 2015. And with it comes many changes on how the home loan and disclosure process happens.
Let’s take a quick stroll down memory lane to see how we got here:
The CFPB: Who are they and what does it have to do with TRID? The Consumer Financial Protection Bureau (CFPB) is the Federal Agency that was created from the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Its job is to look after and protect consumers when it comes to financial products and services.
They are responsible for the creation, enforcement and tracking of consumer complaints of financial products, which include mortgages. Their central mission is to make markets for consumer financial products and services work for Americans—whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products”.
So What is TRID and What Does It Mean for Home Buyers? TRID stands for TILA RESPA INTEGRATED DISCLOSURE. Both TILA (Truth in Lending Act) and RESPA (Real Estate Settlement Procedures Act) were put in place to help consumers make better decisions when it came to picking lenders and settlement services (i.e. title and escrow.)
The new TRID rules combine the two and now come into play for any new mortgages. In short, it is an attempt to make the financing and settlement processes as transparent and consumer-friendly as possible. For instance, there are now limits on how much certain fees can vary between the Loan Estimate and the Closing Disclosure.
What Kind of Changes Will We See?
- Home buyers applying for a mortgage will now receive a single form called the Loan Estimate (LE). This will replace the Good Faith Estimate and Truth in Lending forms used previously.
- Instead of receiving a HUD-1 and a final Truth in Lending Disclosure prior to close of escrow, home buyers will now receive a single document called the Closing Disclosure (CD). Home buyers must receive this document in advance to review.
- For instance, if certain items have changed, such as the loan product has been modified or the APR of the loan has changed by more than 1/8% upward, a new Closing Disclosure will have to be issued. Or, fees quoted on the Loan Estimate cannot vary more than a certain percentage from the original quote.
- There are very specific timelines relating to the TRID process. So, as a home buyer, you will want to build in a little more time for the close of escrow, perhaps closer to 45 days. Also, because of these timelines, communication and returning paperwork and documentation on time is critical.
- Arizona real estate forms used to make an offer are changing to fall in line with the new rules.
- Cash buyers are not impacted by the TRID rules as there is no mortgage.
TRID is a huge rule weighing in at over 2,000 pages and impacts any businesses that touch a residential mortgage to include the actual homeowner. So one might ask “Does this mean buying a home is going to be different from the past?” The answer is an astounding YES!
Want to take a look and see just exactly what is changing? Here are 40 TRID Facts You Need to Know courtesy of datafacts.com.
AmeriPro Home Loans – Branch Manager/MLO
16435 N. Scottsdale Rd. Suite 140
Scottsdale, AZ. 85254
AZ 0911306 CO LMB 100044051
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Regulated by the Division of Real Estate