TILA-RESPA Integrated Disclosure, “TRID”- Post October 3rd
The new TRID Rules are in full swing applied to any mortgages originating after October 2, 2015. Also known as TILA-RESPA Integrated Disclosure, TRID has been a long time in the making, and lenders, settlement agents, title companies and real estate agents have been busy preparing for the change. Out with the long-time-used HUD, Truth In Lending and Good Faith Estimate and instead welcome the Loan Estimate (LE) and the Closing Disclosure (CD).
The biggest change on the lender’s plate is the requirement that the lenders must provide proof that the borrowers received the LE within three business days following their application and the CD three business days before closing. This may be done by mail or email.
Although email may sound simple, there are strict guidelines that must be met in order to effectuate a proper three business day delivery. The borrower must first have an active email address and give consent to email delivery. The lender must then track when the forms are actually opened. The borrower must open the email and the forms. If the borrower and lender follow procedure, this could potentially be a very simple delivery method.
The alternative is delivery by snail mail. This may be used for borrowers without email. This process can take between six to eight business days to complete. This method could potentially delay closings.
All parties on the deed, whether a borrower on the loan or not, must individually receive the CD for review three days prior to closing.
Furthermore, borrowers must sign and return a form called the Intent to Proceed before an appraisal may be ordered. This could slow down the closing process as well. Borrowers will likely have to purchase a 60-day rate lock rather than the usual 30-day rate lock.
The TILA-RESPA Integrated Disclosure was implemented to ensure borrowers have adequate time to review and understand closing documents and figures. It will take time to iron out all of the potential closing setbacks arising out of the new rules. However, working together, the real estate industry will use the new rules to create a clearer and more pleasant mortgage experience for borrowers.