TRID Leads to Better-Informed Homebuyers

Tabitha Roach, First Vice President—Residential Lending Operations

RoachT_BUS0036qcThe 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.

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The Mortgage Process: Back From the Future

David Kozuh, Vice President—Residential Lending

Things have changed. But, not in the way many potential borrowers think.

David Kozuh, Vice President—Residential Lending   Things have changed. But, not in the way many potential borrowers think. Many still think it’s harder to get a mortgage than it used to be. Not necessarily. Despite the Financial Crisis of 2007–2008, banks have been helping homebuyers and owners take advantage of the low interest-rate environment all along. Even Millennials, despite their student debt loads, have been getting approved for mortgages. It’s also still possible to get a mortgage with a down payment of less than 20%. And, first-time homebuyer programs that provide money for down payments may even make it a little easier to afford a new home than in 2008. What Has Changed Since the crisis, the process of applying for a loan has improved. Many lenders, Old Second included, have made initiating a loan request even easier, leveraging online and mobile technology for applications, document gathering and communication. But, the biggest change involves the way an application is now processed. It takes longer…much longer. What could be done inside of 30 days in 2008, may now take longer. No home loan lender is immune—we are all subject to the same regulations. And, it’s about to get a little worse. It’s Not You, It’s the New Federal Regulations Whether you are a first-time homebuyer or an experienced homeowner, in the aftermath of the financial crisis there has been a return to the kind of lending standards—operational checks and balances—that most of us have used to apply to loans for decades. Those standards require time to analyze and verify that each mortgage applicant is qualified for and entering into the right type of loan for their financial circumstances. As of Oct. 3, a new rule from the Consumer Financial Protection Bureau, “Know Before You Owe,” will take effect. It is intended to offer additional protection by ensuring you understand the terms and consequences of your loan agreement at closing. This new rule will add a few more days to the closing process for all mortgage lenders no matter how automated their internal processes are. While a degree of patience has re-entered the mortgage process, we believe it ultimately ensures that you’ll gain full advantage of our expertise. Whether it’s a 30-year fixed mortgage, an adjustable rate, a line of credit for remodeling or a refinancing into a 15-year loan that will help you retire mortgage-free, our goal is—as it’s always been—to make sure you enter into the right financing structure.

Many still think it’s harder to get a mortgage than it used to be. Not necessarily. Despite the Financial Crisis of 2007–2008, banks have been helping homebuyers and owners take advantage of the low interest-rate environment all along. Even Millennials, despite their student debt loads, have been getting approved for mortgages.

It’s also still possible to get a mortgage with a down payment of less than 20%. And, first-time homebuyer programs that provide money for down payments may even make it a little easier to afford a new home than in 2008.

What Has Changed
Since the crisis, the process of applying for a loan has improved. Many lenders, Old Second included, have made initiating a loan request even easier, leveraging online and mobile technology for applications, document gathering and communication.

But, the biggest change involves the way an application is now processed. It takes longer…much longer. What could be done inside of 30 days in 2008, may now take longer. No home loan lender is immune—we are all subject to the same regulations. And, it’s about to get a little worse.

It’s Not You, It’s the New Federal Regulations
Whether you are a first-time homebuyer or an experienced homeowner, in the aftermath of the financial crisis there has been a return to the kind of lending standards—operational checks and balances—that most of us have used to apply to loans for decades.

Those standards require time to analyze and verify that each mortgage applicant is qualified for and entering into the right type of loan for their financial circumstances.

As of Oct. 3, a new rule from the Consumer Financial Protection Bureau, “Know Before You Owe,” will take effect. It is intended to offer additional protection by ensuring you understand the terms and consequences of your loan agreement at closing. This new rule will add a few more days to the closing process for all mortgage lenders no matter how automated their internal processes are.

While a degree of patience has re-entered the mortgage process, we believe it ultimately ensures that you’ll gain full advantage of our expertise.

Whether it’s a 30-year fixed mortgage, an adjustable rate, a line of credit for remodeling or a refinancing into a 15-year loan that will help you retire mortgage-free, our goal is—as it’s always been—to make sure you enter into the right financing structure.

Old Second Bank: Home Equity Loans

Want to remodel your kitchen, take your dream vacation, upgrade your old car and get a new one? What’s stopping you? If you need the money, our home equity loans just might be the answer.

Newlyweds Jackie and Jeff are expecting their first baby and with the news, they found themselves in a 9-month time and money crunch to get things finished around the home. That’s when they turned to us. By taking a home equity loan, Jackie and Jeff were able to ease their minds and begin remodeling their kitchen before their baby girl arrives. By applying right away, they also received a special bonus!

Find out how you can apply for a home equity loan and get one step closer to your dreams. Visit us at:
http://www.oldsecond.com/loans/home-equity-loans/

 

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Old Second: A Commercial Lender in the Community for over 140 Years

Executive VP Donald Pilmer explains the unique position of a community bank with a personal touch, and the financial muscle to provide commercial and industrial lending for equipment, credit and the cash management expertise required in order to prosper. Even in tough times, Old Second has worked with the business community to meet their commercial banking needs. Businesses know Old Second Bank is there when it matters most.

Learn more…