TRID became effective October 3rd, 2015. As with most change, it takes time. In TRID's case it took 30 years to revise and revamp outdated forms and language.
TRID: The Breakdown
The TILA-RESPA Integrated Disclosure integrates The Good Faith Estimate and The Initial Truth-in-Lending Statement and combines them into a new form called The Loan Estimate. The Loan Estimate assists consumers in understanding key areas of mortgage loans, risks, costs and relative information a consumer is interested in when shopping mortgage loans and interest rates. It must be provided no later than the third business day from applying for a loan. What is considered a loan application?
6 DATA Items that trigger The Loan Estimate for TRID:
- Property address
- Estimated value of property
- Social security number
- Mortgage loan amount
Once these items have been received, the lender/loan officer must be prepared and sent within 3 business days. The costs, key features and other related items must be accurate. There is a zero tolerance in effect for increasing key costs.
2 DATA Items acceptable to trigger a Change of Circumstance:
- Rate lock
- Unknown information at the time of Loan Estimate. i.e. Borrower requested change or change in borrower pre-qualification.
Lenders, loan officers, and borrowers must work together to insure accurate information from the beginning to quote costs and key features. The HUD1 and the Truth-in-Lending Initial and Final have been combined into one form called The Closing Disclosure. This must be issued 3 days prior to closing and the consumer has 3 days to review. We've got a road map to the dates and time lines.
After surveying several hundred consumers, it was found the old forms were confusing, outdated and needed revision. Although change sometimes has it's challenges at the beginning, we're thinking TRID does assist in streamlining costs, key features and benefits the consumer with less paperwork.