What is TRID? & How Does It Affect My Closing

On October 1st, 2015 new federal legislation went into effect that changed the loan disclosures that borrowers receive in real estate transactions and added specific procedures and waiting periods to the timeline of the closing process. This new legislation is known as TRID

TRID stands for: TILA-RESPA Integrated Disclosure Rule

The purpose of the new legislation was to make the mortgage process more transparent and easier to understand for consumers & add waiting periods to allow consumers time tpo review and understand their forms and disclosures prior to closing. The most important items to understand are:

  • The forms you are used to seeing have changed
  • Mandatory delivery requirements/waiting periods may delay your closing

Coordinate with your Mortgage Banker well in advance of your closing to ensure you understand the new forms and waiting requirements so you can manage your closing date effectively.

What Forms Have Been Replaced & What Are the New Forms Under TRID?

Old

Good Faith Estimate
Truth-in-Lending (TIL)
HUD-1 Settlement Statement

New

Loan Estimate (LE)
Closing Disclosure (CD)

The Loan Estimate replaces the old Good Faith Estimate & TIL. The CD replaces the HUD-1 Settlement Statement.

What Types Of Loans ARE NOT Affected By TRID?

HELOCS, and Reverse Mortgages, are the main loan types NOT impacted by the new TRID Rule.

When Did TRID Go Into Effect?

TRID went into effect for loan applications originated ON OR AFTER Oct. 1, 2015

What Are The Primary Changes With TRID?

  1. New Forms/Disclosures

    As mentioned above, the Loan Estimate has replaced the GFE & TIL, and the Closing Disclosure has replaced the HUD.

  2. Timing Is Critical: Initial Disclosure Delivery Requirements

    An Initial Loan Estimate must be provided/received:

    • No later than 3 days after an application is taken.
    • No less than 7 days prior to closing.

    A Revised Loan Estimate must be provided/received:

    • No less than 4 days prior to closing.

    A Closing Disclosure must be provided/received by the consumer:

    • No less than 1 day after the last Loan Estimate was issued.
    • No less than 3 days prior to closing.
  3. Timing Is Critical: Redisclosure Delivery Requirements

    A revised Loan Estimate must be provided/received:

    • No less than 4 days prior to closing.

    A revised Closing Disclosure must be provided/received:

    • No less than 3 days prior to closing.
  4. When is Redisclosure Required?

    A revised Closing Disclosure is required if the following occurs:

    • APR becomes inaccurate
    • Loan Product changes
    • Prepayment penalty is added
  5. Changes to 0% Tolerance Items

    Fees paid to the creditor/broker/affiliate (new) Unaffiliated 3rd Party services for which the borrower cannot shop for (new)

  6. Written List of Service Providers

    There are new guidelines surrounding service provider lists. They now must be provide no later than 3 business days after the application is received & must include sufficient information to allow the borrower to contact the provider.

  7. The Closing Disclosure Must Be Issued by the Lender

    Previously the settlement agent (title company/attorney) would prepare and issue the HUD-1 information to the parties. Now this document is prepared by the Lender.