What is TRID and How Does It Impact Consumers?
We asked a local lender to help by giving a detailed explanation of what this will mean for you!
In an effort to improve consumer understanding, reduce redundancy and provide consistent language, the mortgage world has new “integrated mortgage disclosures.” These documents are called the Loan Estimate (LE), which the consumer will receive upon application, and the Closing Disclosure (CD), which is to be in the hands of the consumers at least three days prior to closing. (There are still questions as to how the three days will be verified, but each lender will be doing their best to follow those rules and have documentation to show they have done so.)
These new requirements will go into effect October 3, 2015.
At application, the LE takes the place of a few different forms and appears to be easy to read and full of information for the consumer. One of the biggest issues that homebuyers mention is that they often feel rushed at the end, as closing approaches. That said, having the CD in their hands three days prior to closing (which means being mailed 7 days prior to) is actually not a bad thing. This extra time gives clients more time to review and understand the final numbers. The challenge arises if there are changes that impact the loan APR (annual percentage rate), loan product or prepayment penalty, then a new CD must be prepared and delivered to the consumers three days prior to closing. This could result in delayed closing times.
The bottom line is that local lenders will be available to answer these questions and work with all parties to make sure all of the new requirements are met. Remember, these new policies are designed to benefit consumers and ensure that everything is disclosed prior to sitting down at the closing table.
For more information on the TILA-RESPA Integrated Disclosures (TRID), visit http://www.consumerfinance.gov/regulatory-implementation/tila-respa/
Kelly Deforge - Senior Mortgage Loan Originator
Union Bank, Vermont