New TRID Rules Affect Home Buying Process
What’s new in the homebuying process? If you’ve met with a Las Vegas home mortgage lender recently, you were likely introduced to TRID. The acronym TRID represents a new rule that combines previous disclosures contained in the Truth-in-Lending Act (TILA) with the Real Estate Settlement Procedures Act (RESPA) to create a single set of rules, the TILA-RESPA Integrated Disclosures (TRID) Rules.
By combining several disclosure forms into one, TRID involves a new three-page Loan Estimator Form and a five-page Closing Disclosure, effectively decreasing the forms required to purchase a new home. This move is intended to improve compliance with mortgage laws as well as to provide better transparency and accessibility of information for homebuyers. The rule went into effect on October 3, 2015, and is applicable to all types of home loans except:
- Home Equity Lines of Credit (HELOC’s)
- Reverse mortgages
- Mortgages secured by a mobile home or not attached real property
The substantive changes to the rules include the following:
- Upon receipt of the application, the clock starts ticking for disclosure delivery as long as the loan officer receives the following: Name, Income, Social Security Number, Property Address, Estimated Value of Property, Mortgage Loan Amount Sought
- The Loan Estimate must be provided to the buyer by the loan officer no later than three days after receiving the loan application and no later than seven days before consummation (closing).
- The Closing Disclosure must be received by borrowers no later than three business days before consummation.
- In the event of revisions to the original application, a revised Loan Estimate must be received by borrower(s) no later than four days prior to consummation.
- The revised Closing Disclosure must be received no later than three business days before consummation if any of the following takes place: APR is not accurate, loan product changes, or a prepayment penalty is added.
- Variances, formerly known as tolerances, will limit fees that can be charged.
- A lender must provide a separate list of services to the borrower so the borrower is able to shop and identify at least one available provider for each service no later than three days after receipt of a loan application.
- Closing Documents
- The creditor provides the Closing Disclosure, including the HUD-1 information that the settlement agent was previously responsible to provide.
What Does All This Mean to the Buyer?
OK – enough of the technical language! What does TRID mean in reality for homebuyers?
- The rule alterations are intended to help borrowers understand their obligations and the obligations of the sellers, lender, Title Company and other partners easier; hence, it is called the “Know Before You Owe” rule.
- You will have more time to review the Closing Disclosure, prior to closing, so you can have all your questions answered.
- Closings can take longer. A closing period of 45 days or longer will often be necessary.
- Within four days of making the official loan application, you must confirm your intent to proceed to your lender.
- Electronic signatures will be used regularly. These signatures will reduce the wait periods lenders must comply within the new rules.
- A waiting period of three days between when you receive your closing documents and your closing is required and excludes Sundays and legal holidays.
- Turn all information into your loan office without delay. All items must be finalized within 10 days of your closing date to avoid a delay in the closing.
With all these changes, it’s great to know one thing will stay the same. Sydnee Johnson Las Vegas Home Loans will provide the best customer service combined with the best rates of any other loan officer in the area. With unmatched experience and attention to detail (not to mention a great personality!), Sydnee Johnson is a favorite among Greater Las Vegas area Realtors®, Title Companies, and borrows. Take a look at her reviews and see why!