Here comes TRID

Home - Santa Fe Real Estate Guide - - MORTGAGEMATTERS - JIM GAY

Have you heard of TRID and CFPB? Most of us have not heard of ei­ther. CFPB is the Con­sumer Fi­nan­cial Pro­tec­tion Bureau, which is in charge of polic­ing the new and hope­fully fi­nal changes in real-es­tate dis­clo­sures. La­beled “TILA RESPA in­te­grated dis­clo­sure (TRID), these changes should be fi­nal­ized in Oc­to­ber 2015. CFPB is, of course, a gov­ern­ment agency and has al­ready changed the date fromAug. 1.

Home­own­ers, Real­tors, ti­tle com­pa­nies, and mort­gage lenders will all be af­fected by TRID. TILA is the truth-in-lend­ing dis­clo­sures that we have used for years. RESPAis the Real Es­tate Set­tle­ment and Pro­ce­dures Act that has con­trolled real-es­tate trans­ac­tions for decades.

The TRID dis­clo­sures will ap­ply at the ini­tial time of loan ap­pli­ca­tion and then again prior to the ac­tual clos­ing of the fi­nanc­ing of your real es­tate. Therein lies the big rub: the same in­for­ma­tion cur­rently re­quired on the good-faith es­ti­mate, at the time of loan ap­pli­ca­tion, must soon be dis­closed within three days af­ter the pur­chase agree­ment is signed. Then at least three days prior to the clos­ing of the trans­ac­tion, the clos­ing dis­clo­sure must be pre­sented to the buyer.

This sounds sim­ple; how­ever, if there are any changes to the agree­ment of sale be­tween buyer and seller, a very rig­or­ous timeline kicks in, re­quir­ing more dis­clo­sures and de­lays. The busi­ness con­tract be­tween buyer and seller has been amended by gov­ern­ment dis­clo­sures.

Why are we tak­ing the same in­for­ma­tion that has al­ways been dis­closed to the con­sumer and re-for­mat­ting it? Not sure. But, be aware, this can cer­tainly slow down a pur­chase of a home. Do not or­der the mov­ing truck un­til your len­der tells you ex­actly when the clos­ing will oc­cur.

Your mort­gage com­pany is now even more im­por­tant. It has the re­spon­si­bil­ity for a cor­rect HUD clos­ing state­ment. The ti­tle com­pany gets its fi­nal num­bers from the len­der. Be­cause of this, choose your mort­gage per­son very care­fully.

Ex­pect that af­ter these new rules are im­ple­mented in Oc­to­ber, real-es­tate clos­ings may re­quire more time for the first­month. Real­tors should build in longer clos­ing dates. They also will need to work more closely with ti­tle com­pany and len­der.

Bot­tom line: TRID will bring about more in­va­sive dis­clo­sures. All par­ties in­volved need to team up and work dili­gently to­ward

the com­mon goal.

Jim Gay has been a real-es­tate bro­ker for 20 years and has been a con­sul­tant to For­tune 500 com­pa­nies. He is cur­rently a bro­ker/ owner ofThe Mort­gage Place, Inc. (986-9080) and can be reached at jim@jim­gay­home­m­o­rt­gage.com.

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