Proposed delay to the new TILA-RESPA Integrated Disclosure

Housing in the SpotlightIn June, the Consumer Financial Protection Bureau (CFPB) proposed a delay to the new TILA-RESPA Integrated Disclosure rule, known as “TRID.” A final decision could push TRID’s effective date from August 1 to October 3, 2015.

Citing time needed to correct an internal “administrative error,” the CFPB said that the new timing would better accommodate consumers and providers busy with the start of the new school year, and also allow providers more time to adopt the new rule.

TRID requires the merger of documents provided to a borrower during the loan process. First, the Good Faith Estimate and the initial Truth-in-Lending Statement will now combine to form the “Loan Estimate,” which must be provided within three days of application.

Second, the borrower will now receive a “Closing Disclosure,” which combines the final Truth-in-Lending Statement and the HUD-1 Settlement Statement. This new form must be provided at least three business days before the loan is consummated (i.e., when the borrower becomes contractually obligated per Regulation Z), which in most states is the same as the closing date or when the borrower signs the promissory note.

Upon TRID’s effective date, lenders, escrow and title agents, and closing attorneys will be required to integrate these forms into their processes.

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