Changes coming due to TRID. What the heck is it?
Whether or not you've heard of TRID, it's coming, and it will impact buyers. TRID, also known as the TILA-RESPA Integrated Disclosure Rule becomes effective October 1, 2015. With it comes different forms, different processes, and different time lines.
In November 2013, the Consumer Financial Protection Bureau (CFPB) integrated the Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA) disclosures and regulations. Any transaction involving a mortgage will use new CFPB disclosure forms. The new TRID forms were to be implemented on August 1, 2015. However, on July 21, 2015, after calls from NAR and other industry groups, CFPB officially announced that the effective date of the implementation of the rule was delayed until October 3, 2015.
The Consumer Financial Protection Bureau has a a lot of great information at its resources page, including a compliance guide, a guide to forms, a disclosure fact sheet, and a guide on the new time lines.
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 explains the mortgage loan’s key features, costs and risks at the beginning of the mortgage process.
Some of the changes include that lenders must provide the Loan Estimate form to consumers within three business days of applying for a loan and that the Closing Disclosure form must be provided at least three business days before loan consummation. Any significant changes to the loan terms will restart a new three-business-day waiting period.