TRID Explained

New Forms Arrive October 3, 2015

For over 30 years, loan officers have been required to provide two documents anytime a borrower submitted a loan application. These documents are known as the Good Faith Estimate (GFE) and the initial Truth-in-Lending disclosure (TIL).

At the time of closing, we also provide the HUD-1 Settlement Statement and the final TIL.

Now, the Consumer Financial Protection Bureau (CFPB) has announced the “TILA-RESPA Integrated Disclosure,” now known industry-wide as TRID. As part of the new rule, some existing documents will merge as of this October 3, 2015:

Application: The GFE and TIL will be combined into a new form called the Loan Estimate, which is designed to give consumers a better understanding of key features, costs and risks of the mortgage for which they are applying. This form is to be provided no later than three days after application.

Closing: The HUD-1 and final TIL will be combined into the Closing Disclosure, which more clearly explains the final costs of the transaction. This form is to be provided to consumers at least three business days before the loan is consummated (i.e. when the prospective borrower(s) becomes contractually obligated, as defined by Regulation Z), which in most states is the same as the closing date or when the borrower(s) signs the promissory note.

While these new forms and procedures may seem scary, rest assured we’ve done our homework and will be ready for the August 1 deadline. If you have any concerns about how the TRID rule might affect your customers, please don’t hesitate to contact me today.

Source: CFPB

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