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Financial Nov 4, 2015

TRID Implementation Squarely In The Rearview

Sponsored Content provided by Patrick Stoy - Mortgage Consultant/Owner, Market Consulting Mortgage

For the majority of this year, those of us with interests in real estate have been operating underneath the ominous, confusion-casting shadow known as the TILA-RESPA Integrated Disclosures (TRID). These new disclosures have been surrounded by misinformation and Chicken Little-style hysteria about added costs and potential delays in closing times.  

A result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, TRID was designed to protect the consumer. To achieve that goal, the Consumer Financial Protection Bureau inserted a number of waiting periods into TRID to ensure that consumers have ample time to thoroughly review any changes to their transactions.

It would be an true statement to say that everyone in the industry, especially mortgage brokers and real estate agents, experienced at least a little anxiety about the impact of TRID. Even Ken Trepeta, director of real estate services of the government affairs branch for the National Association of Realtors, commented that mortgage brokers, Realtors, buyers and sellers should “expect a one to two week delay in closings” because of TRID.

As a result of all this trepidation, many Realtor- and mortgage-broker associations banned together and successfully lobbied for a delayed implementation of the rules to ensure that everyone would have adequate time to prepare.

The final implementation of TRID went into effect on October 3, and I’m happy to report that the buyers I have been working with did not experience a delay in their closing times. The sky didn’t fall. Overall, I have to say that TRID has exerted a positive impact on the industry.

Before October 3, lenders were required to provide borrowers with four different disclosure forms, which contained overlapping, inconsistent language. With the integration of these disclosures, the process has been streamlined and there is less paperwork involved.

One of the largest benefits that TRID has provided for the consumer is that the law now requires lenders to give borrowers a closing disclosure statement three business days before the settlement of their transaction, when before it was only one business day. This has stemmed the tide of procrastination in the industry and provided added protection for borrowers.

An additional waiting period of three business days applies when certain changes to a loan are made, such as:

  • An increase to the annual percentage rate (APR) that becomes inaccurate by more than 1/8 of a point,
  • The addition of a prepayment penalty, or
  • The change of a loan product.
Another benefit that TRID has had for the consumer is that settlement agents are now allowed to provide buyers and sellers with separate versions of the closing disclosures, showing only information that is relevant to that party’s side of the transaction. This helps to protect the privacy of those involved in a real estate transaction.

The takeaway for Realtors and their buyer clients is to find a mortgage broker with a comprehensive knowledge of the new rules and a commitment to provide timely updates about the transaction. If you have questions about the new rules and what they mean for you, please contact me.

Patrick Stoy (NMLS# 39527; Market Consulting Mortgage NMLS# 39166) has 16 years of mortgage lending experience. Patrick is CEO of Wilmington-based Market Consulting Mortgage, which he started in 2005 with a mission to build lifelong customer relationships by providing real value. To learn more about Marketing Consulting Mortgage, visit www.macmtg.com. Patrick can be reached at [email protected] or 910-509-7105.
 

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