This Week In Real Estate - 10-2-2015 - TRID in Effect

TRID in effect

Effective October 3, 2015 new lending rules called the “Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure,” TRID for short takes effect.

In short the government is requiring more time for consumers to review all the documents sent before the lenders can issue loan documents or fund loans. The addition to regulations will add about 6 business days in a standard purchase.

So for buyers and sellers, a financed offer that normally has a 30 day escrow, we will likely have to begin to get used to 40-45 day escrows. As escrow, lenders, REALTORS, and buyers get accustom to the new forms and procedures.

If you would like help falling asleep, you can see the complete rule and the Official Interpretations are available at:

http://www.consumerfinance.gov/regulations/integrated-mortgage-disclosures-under-the-real-estate-settlement-procedures-act-regulation-x-and-the-truth-in-lending-act-regulation-z/

First, the Good Faith Estimate (GFE) and the initial Truth-in-Lending disclosure (initial TIL) have been combined into a new form, the Loan Estimate. Similar to those forms, the new Loan Estimate form is designed to provide disclosures that will be helpful to consumers in understanding the key features, costs, and risks of the mortgage loan for which they are applying, and must be provided to consumers no later than the third business day after they submit a loan application. Second, the HUD-1 and final Truth-in-Lending disclosure (final TIL and, together with the initial TIL, the Truth-in-Lending forms) have been combined into another new form, the Closing Disclosure, which is designed to provide disclosures that will be helpful to consumers in understanding all of the costs of the transaction.

-Kris