Gustan Cho The Mortgage Expert,
Publish On: June 10, 2020
This BLOG On TRID Mortgage Regulations For Mortgage Lenders And Borrowers Was UPDATED And PUBLISHED On June 10th, 2020
TRID Mortgage Regulations: What Is TRID?
Borrowers going through the mortgage loan application process now have heard of TRID Regulations that went into effect on October 3rd, 2015.
- The mortgage industry is extremely regulated and once we think that we have more than enough mortgage lending regulations, new changes to mortgage rules are made such as TRID Regulations
- Professional realtors, attorneys, and loan officers already know TRID Regulations
- All borrowers who have applied on or after October 3rd, 2015 need to abide by the new TRID Regulations
- TRID stands for TILA/RESPA Integrated Disclosure Rule
- Many in the mortgage industry were worried about the implementation of TRID and dreading the October 3rd, 2015 initiation date of TRID Regulations
TRID Regulations was created and implemented by the newly formed Consumer Financial Protection Bureau, also known as CFPB, the Sheriff of the Mortgage Industry.
Concerns With TRID
One major concern mortgage industry professionals had with the implementation of TRID Regulations was that implementing and complying with the new TRID Rules could possibly create higher costs to mortgage lenders which in turn will create higher fees and costs to consumers.
- TRID Regulations was created and implemented by the Consumer Financial Protection Bureau, CFPB, to further protect the consumer by making the new disclosures easier to read and to give consumers three business days to review the Closing Disclosure, which replaced the HUD-1 Settlement Statement
- Prior to TRID, once a borrower got a clear to close, or CTC, they could have closed their home loan the same day
- Now, after the clear to close, TRID Regulations mandate that the borrower cannot close their home loan until three business days have elapsed
- This is because the Consumer Protection Financial Bureau feels that the consumer needs the three days to go over the Closing Disclosure and make sure there are no mistakes
If the Closing Disclosure needs changes to be done, the lender needs to correct the items and the file needs to be re-disclosed to borrowers and they need to wait an additional three business days.
Critics Of TRID
Critics of the TRID Regulations are already complaining that the three day waiting period is hurting consumers than helping then.
- Costs and fees are escalating for lenders where it gets trickled down to consumers
- Many mortgage and real estate industry professionals and experts stand by their belief that the new TRID Regulations will greatly slow down the mortgage process of closing on both home purchase mortgage loans and refinance mortgage loans
- Rush closings will become non-existent under the new TRID Regulations since it is mandatory that home buyers need to wait a mandatory three business days after a clear to close and getting their Closing Disclosure
- Prior to TRID, most home purchase loans were able to be closed in 30 days or less
- However, with the new TRID Mortgage Regulations, the three day waiting period can turn into weeks in the event if the mortgage loan file needs to be re-disclosed
- Prior to TRID, if there was a change of circumstances or changes needed to be made, it could have been done on the spot
However, with new TRID RULES, this cannot be done and a new Closing Disclosure needs to be re-disclosed and the borrower needs to wait 3 days from the receipt of the latest Closing Disclosure.
Outcome Of TRID Regulations
The first batch of TRID loans is now closing and lenders are getting accustomed to it and so are title company closers and real estate attorneys. The outcome of TRID Regulations has combined and has simplified the initial various forms and disclosures that mortgage companies had used prior to the implementation of TRID. The main goal of TRID rules and regulations by the Consumer Protection Financial Bureau was for consumer protection by creating a more consumer user-friendly Loan Estimate also referred to as LE which allows mortgage loan borrowers to understand the terms of their mortgage loans. As time progresses, home buyers, home sellers, real estate attorneys, title companies, and mortgage loan originators will get accustomed to the new TRID Regulations and the old Good Faith Estimate and HUD-1 Settlement Statements will be a thing of the past and forgotten.
