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TRID: What You Need to Know About New Closing Disclosures

13 Aug 2015

On October 3, the new TILA / RESPA Integrated Disclosure, or TRID, statutes will take effect. These “know before you owe” rules were created for the benefit of homebuyers across the country. Essentially, it provides simplified information of the mortgage and closing process to consumers so they know what they are actually spending money on, and how much they will end up spending over the life of the mortgage. While this is great for the buyer, it does have some implications for Realtors as well.

 

Stricter Timeline

For the most part, the new TRID regulations impact lenders. But generally, Realtors are the middleman between lender and borrower, so it is important for you to understand the new laws as well. One of the biggest changes is the loan paperwork delivery timelines. The loan estimate, which includes the APR, must be delivered within three business days of the lender receiving the application. It must also be provided no later than seven business days before the transaction is finalized.

 

There are also stricter regulations on what dictates a completed loan application. A consumer need only provide their name, social security number, income information, the address and estimated value of the property they wish to purchase and the amount of money they want included in the mortgage. The creditor can deny an application with only this information, but they must make the decision within three days. Finally, the loan estimate only has a 10-day lifespan, after which your client must reapply. For more information, visit Marina Title’s Buyers and Sellers page.

New Closing Forms

In addition to the loan estimate, there are also changes to closing disclosure documents. For one, it combines the final Truth-in-Lending disclosure and the HUD-1 form. In addition, it includes more detail of the charges and costs included in the transaction. Perhaps more importantly, there is an entire page dedicated to explaining the fees associated with closing and an explanation of the terms of the loan.

 

There is a tighter deadline for the closing disclosures. It must be received by the consumer no later than three days before the transaction is finalized. As such, there are three ways it can be delivered: in person, through email or through the post. According to TRID, the consumer is presumed to have received it three days after it being mailed or emailed.

 

Uncertainty Surrounding TRID

There are other factors, such as good faith, that also attribute to the new TRID regulations, but that is more between the lender and the consumer. As it stands, no one knows for sure how the new law will affect Realtors. But, it is believed that the closing process will be further delayed by it as a trade-off for greater consumer understanding. Even when the statutes do go into effect, understanding them could still prove difficult.

 

If you would like more information about TRID, contact us at Marina Title. Our attorneys are experts in real estate law, so you don’t have to be. You can reach us by email at info@marinatitle.com or by phone at 1 (800) 610-4750.

 

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