TILA-RESPA Integrated Disclosure (TRID)
Under the current regime, borrowers receive several loan disclosures at different points in the loan process. These disclosures are confusing. They’re complicated and redundant. For instance, the GFE and HUD both disclose closing costs and loan terms. The problem is that the forms are in completely different formats. There is no way for consumers to compare the information.
The CFPB (Consumer Financial Protection Bureau) wants to simplify the mortgage process for borrowers by standardizing one format across multiple forms. The Loan Estimate (which replaces the GFE) presents information in the same way as the Closing Disclosure (which replaces the HUD). Since the forms are similar, discrepancies are easy to spot. This allows borrowers to confirm whether the mortgage terms line up with their expectations.
In addition, the CFPB wants borrowers to have final figures well in advance of closing. Oftentimes, borrowers see the final figures for the first time at the closing table. That’s not fair. Families shouldn’t be pushed into making important financial decisions at the last minute. Instead, families should have their final figures in time to review them at the kitchen table. Lenders also need time to process changes before the closing so as not to delay the closing.
The CFPB requires that the Closing Disclosure be submitted to borrowers no fewer than 3 days before the closing. This requirement cannot be waived by the borrower except under certain hardship conditions. It is important to note, however, that borrowers will not have all of the final figures. Charges such as HOA dues and fees and home warranties do not trigger a re-disclsoure of the Closing Disclosure. Still, borrowers will have plenty of time to review the terms of their mortgage and compare closing costs with the Loan Estimate.
TRID is a good thing for families in Tennessee. Informed borrowers are more relaxed and satisfied. They feel more confident about their home purchase and are more likely to recommend the professionals who assisted them. The CFPB’s goal of simplifying the mortgage process is one that we encourage all real estate and lending processionals stand behind.