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| TRID FORMS AND CHANGES |
| Change is Here!! |
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| The change is called TRID and provides consumers with The New TILA RESPA Integrated Disclosures |
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| The Consumer Financial Protection Bureau has published revisions to the TILA and RESPA mortgage regulations that went into effect October 3, 2015. These changes are meant to make it easier for borrowers to read and understand the cost of getting a mortgage loan. |
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| The Loan Estimate: replaces the initial Truth-in-Lending disclosure & Good Faith Estimate for most closed-end mortgage loans |
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| Click here for Model/sample forms |
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| The Closing Disclosure: replaces the final Truth-in-Lending disclosure & HUD-1 Settlement Statement for most closed-end mortgage loans |
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| Click here for Model/sample forms |
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| What Are the Primary Changes? |
| 1) Application Definition - the application is considered received and the clock starts ticking for disclosure delivery when the following six items are received: Name, income, Social Security number, property address, estimated value of the property, and mortgage loan amount sought |
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| 2) Timing is Everything - New disclosure delivery timing requirements |
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| Loan Estimate must be provided no later than three (3) business days after receiving the application & No later than seven (7) business day before consummation |
- For purposes of the “seven-business-day” requirement, business day is defined as all calendar days, except Sundays and legal public holidays.
- Consummation occurs when the consumer becomes contractually obligated to the creditor on the loan, not, for example, when the consumer becomes contractually obligated to a seller on a real estate transaction. This point in time depends on applicable state law.
- Closing Disclosure must be received by borrowers no later than three (3) business days before consummation - Revisions and corrections “waiting period” requirements
- A revised Loan Estimate must be received by the borrower(s) no later than four (4) business days prior to consummation
- A revised Closing Disclosure must be received by borrower(s) no later than three (3) business days before consummation if the following occurs:
- APR becomes inaccurate
- Loan product changes
- Prepayment Penalty is added
Changes that occur before consummation and do not require a new three-business day waiting period (which includes all other changes). For these changes, the creditor must ensure only that the consumer receives the revised CD at or before consummation.
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| 3) Changes to the 0% Tolerances Category - Fees paid to the creditor, a mortgage broker, or an affiliate of either (NEW) - Unaffiliated third-party services for which the borrower cannot shop (NEW) |
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| 4) Written List of Providers - The creditor must provide a separate list of services for which the borrower may shop and identify at least one available provider for each service no later than the third business day after receiving the application |
- Must include sufficient information to allow the borrower to contact the provider
- Must state that the borrower may choose a different provider for that service
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| 5) Issuing the Closing Disclosure - The creditor is responsible for providing the Closing Disclosure, including HUD-1 information that the settlement agent was previously responsible for - The settlement agent is responsible for providing the Closing Disclosure to the seller |
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| Other Information |
- As part of the TRID implementation process, CFPB has developed a new Special Information Booklet which it calls the “Home Loan Toolkit.” -- Click here for The Home Loan Toolkit
- Escrow Closing Notice -- This notice must be provided prior to cancelling an escrow account to consumers for whom an escrow account was established on a closed-end mortgage secured by a first lien, except for a reverse mortgage. This additional notice must be provided no later than three business days before the consumer’s escrow account is cancelled.
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| Frequently Asked Question about the LE: |
| Can I obtain a basic cost estimate without going through a formal application and receiving a Loan Estimate? YES |
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| The new TRID rule does not prohibit a creditor or other person from providing a consumer with estimated terms or costs prior to the consumer receiving the LE. However, if a written estimate is provided before the LE, it must clearly and conspicuously state at the top of the front of the first page: |
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| “Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing the loan.” |
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| Note: Loan approval is subject to credit approval and program guidelines.. Interest rates and program terms are subject to change without notice. |
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| The content of this communication is not intended for consumer use or for distribution to any third party. This information is being provided to you as a service and reflects information compiled from various sources. This information is not intended to be legal advice and MABC Mortgage will not accept any liability for reliance on the content of this bulletin. Please consult with your own legal counsel about how this communication may affect you. |
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| Click here for TRID Resource Link |
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| Client Resource: |
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| Buying a home? Refinancing? Click here to know how the New TRID regulations affect YOU and your Loan Process. |
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| Realtor Resource: |
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| The Real Estate Professional's guide >> |
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| TRID Resources and Forms: |
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| Know Before You Owe >> |
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| Home Loan Tool Kit >> |
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| Loan Estimate - Explanation >> |
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| Closing Disclosure - Explanation >> |
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