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TRID

It’s Oct 3rd – The TRID mortgage begins and how you buy a home with a mortgage is forever changed.

How mortgages are processed changes today.  And the change is tremendous.  New forms, procedures and time constraints – closing on a home is now a different world for both buyer and seller.

Born out of the sub prime mortgage meltdown that was the catalyst for the recession, the Consumer Financial Protection Bureau has demanded change.   It has integrated the Truth in Lending Act and the Real Estate Settlement Procedures Act.  As a result, we have a completely streamlined and transparent system. Added in are components from the Dodd Frank Bill as well.

The result is a home loan process that is pro consumer and so much easier for a mortgage borrower to understand. I think this is terrific but I do have some reservations as well.    TRID

TRID has two new forms that replace the Good Faith Estimate and HUD-1 Closing Statement: It replaces their 4 forms with just 2 -The Loan Estimate and Closing Disclosure.  Happily both are written in language you can understand.

The Loan Estimate must be sent to a borrower 3 business days after application.  Home buyers didn’t often receive a copy of the documents they signed previously.  Hence this new rule.

The Closing Disclosure replaces what was known as the HUD-1.  This must be received no less than 3 business days before closing.  AND (here’s the kicker) if there are any changes within those 3 business days, the closing must be delayed 3 more business days.

This can create a last minute delay because if there is any change within that 3 day period, the closing must be pushed back 3 days.  CFPB says that all home buyers must have the closing document at least 3 full days before closing.  While this might create a delay, it’s also good.

Having so much time to go over these documents means you are able to review them carefully before you buy the house.  I’ll post more articles to explain TRID further but know this – TRID is a very positive change for both home buyers and home sellers.

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