Here comes TRID
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 firstname.lastname@example.org.