Tabitha Roach, First Vice President—Residential Lending Operations
The Consumer Financial Protection Bureau revised the closing procedure for residential mortgages last October. The result: the TRID (TILA/RESPA Integrated Disclosure) rule. Also called “Know Before You Owe,” this rule is intended to:
- Make shopping and comparing borrowing options and costs easier across lenders.
- Present information in a more easily understood way, with less legalese and simpler wording.
- Provide borrowers with enough time to review loan terms before agreeing to them.
While buyers will receive two new disclosure documents as a result of TRID, these replace four of the old forms. The first of these forms is the loan estimate. It will be provided within three days of a lender receiving a potential borrower’s information. This includes the borrower’s name and social security number, the property value and address, and with the amount of the loan request. This disclosure will then allow borrowers to make apples-to-apples cost comparisons among all the lenders they are considering using before proceeding with their application.
Objective: No More Surprises
The second document is the closing disclosure. This replaces the old settlement statement, which was not previously given to borrowers until after the loan was final.
Under TRID, homebuyers now have three days to review their loan’s final terms—and the associated dollar amounts—before committing to them.
The closing disclosure will also provide borrowers with a thorough list of any fees that were incurred with the transaction. This means lender fees will be itemized, as well as inspection fees, title fees, seller fees, etc.
By “knowing before owing,” borrowers arrive at the closing table better informed.
Timing Is Everything
There’s no denying TRID was a big deal for the mortgage industry. Frankly, it required substantial procedural changes for closing mortgages. But for those of us who were prepared, it has been a plus for our customers.
The only additional request being made of borrowers is one most were doing anyway: getting their fully executed contract to their loan officer immediately upon acceptance of their purchase offer.
Because TRID extended the closing process by six days, the sooner we can begin the loan review, the sooner we can gather the information needed to approve the loan request, prepare the necessary TRID disclosures, and keep the closing on schedule.
Should you have any questions about TRID, your mortgage request, the closing procedure or any other matter related to your home loans, call us. We’ve always worked hard to keep our borrowers informed; TRID has simply incorporated it into the federally required forms.