What Is TRID? Know Before You Owe Has Changed the Mortgage Industry
This Article ON What Is TRID And How Has TRID Changed The Mortgage Industry Was Written By Nicholas Ferrante NMLS 1110570
What Is TRID? Many consumers still ask What Is TRID and are not quite clear with this four letter word. In order to make loan disclosures simpler and more easy to understand, the Dodd-Frank Act directed the Consumer Financial Protection Bureau (CFPB) integrate all TILA and RESPA mortgage disclosures under the TILA- RESPA Integrated Disclosures (TRID) rule, also referred to as “Know Before You Owe.”
Know Before You Owe
All home loans originated after October 3, 2015 are subject to “Know Before You Owe,” which can be broken down into three elements to assist consumers:
- Electronic Loan Process
What Is TRID: The Three Elements Of TRID Explained By Nicholas Ferrante
- Disclosures. Consumers can now breathe easier, as they will only receive two disclosures, rather than the previous four.
- The new forms are more straightforward and easier to understand, and have the same format for easier comparison.
- Prior to October 3rd, consumers received an Initial Truth-in-Lending and Good Faith Estimate at the beginning of the process, which have been replaced by the Loan Estimate.
- And, at the end of the process, the consumer received a Final Truth-in-Lending and HUD-1 Settlement Statement, subsequently replaced by the Closing Disclosure.
- The four previous forms all had different formats and were difficult to read and understand.
- The simplification and standardization of these forms are a very positive change for consumers.
- Timing. The new rules regarding the delivery times of the disclosures is one area that the lending and real estate communities fear may cause delays for consumers.
- The new timelines for delivery of disclosures is strictly outlined and enforced by the CFPB.
- The Loan Estimate must be delivered to the consumer three business days after a completed application is submitted, which is the same as the old rule.
- Along with the Loan Estimate, the lender will send an Intent to Proceed form.
- Lenders may not begin the process of requiring processing documentation or ordering an appraisal until the consumer signs, acknowledges and returns the Intent to Proceed.
- If at any time during the process there are changes to any loan terms, such as loan amount, loan program or locking in an interest rate, a revised Loan Estimate must be delivered to the consumer.
- And loan consummation may not occur less than four business days from delivery. Which puts a burden on the consumer to make all final decisions well in advance of loan consummation.
- Prior to loan consummation, the consumer now has ample time to review and understand the terms of their loan, as the Closing Disclosure must be delivered to the consumer no less than three business days prior to loan consummation.
- At this point in the process, it’s incumbent on all of the involved parties, consumer, real estate agent, settlement agent, and lender to work closely together to ensure there are no delays.
- Electronic Loan Process. To satisfy the disclosure timing rules and closing deadlines, many lenders, like CrossCountry Mortgage NMLS 3029, have adopted a fully electronic loan process, including online applications, secure document portals, email delivery, and electronic signatures.
- Nearly a week can be saved if not using the slow back and forth of the U.S. Postal Service. Modern technology in the mortgage industry has changed the process for the better and is a huge money- and time-saving benefit for consumers.
About The Author: Nicholas Ferrante NMLS 1110570
Nick Ferrante of The Gustan Cho Team at CrossCountry Mortgage is also a contributing editor and guest writer for Gustan Cho Associates Mortgage & Real Estate Information Resource Center and we are honored to have Nicholas Ferrante as part of our team due to his extensive knowledge in all areas of lending and mortgage regulations.
Nick Ferrante of The Gustan Cho Team at CrossCountry Mortgage NMLS 3029 loves what he does; making the dream of home ownership become a reality . Nicholas loves to write informative blogs about mortgage lending and real estate because he feels that education is the key in having every home buyer informed and educated in making the most important decision of their lifetime; a home purchase.
Nick is an expert in all loan programs from government loans to Fannie/Freddie, to non-prime mortgage loan programs. Nick feels that education is key in being a great manager so he is always up to date with the latest mortgage rules and changes and makes sure that all of his loan officers and support staff are educated and have the latest updates on all mortgage lending guidelines. Nicholas Ferrante of Gustan Cho Associates is not just available to his borrowers 7 days a week, but also to his staff and colleagues. If you are a borrower who are in need of a pre-approval letter and/or are in the mortgage process not and are not happy with your current lender, contact The Gustan Cho Team at CrossCountry Mortgage at 262-878-1965 or text us at 262-716-8151. You can also email us at firstname.lastname@example.org. Nick Ferrante and The Gustan Cho Team at CrossCountry Mortgage is available 7 days a week, evenings, holidays, and weekends.