What is TRID? The Consumer Financial Protection Bureau (CFPB) in November 2013 published revised final rules and forms that combine the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). The new rules called TRID (TILA-RESPA Integrated Disclosure) apply to disclosures that consumers receive in connection with applying for and closing on a mortgage loan. The new integrated disclosures apply to most closed-end consumer credit transactions secured by real property. As an aside only government can combine TILA and RESPA and come up with TRID!
TRID has meant delays for real estate agents and clients alike, says Bernice Ross at Inman. Ross outlined one of the most serious issues that will result from the new changes handed down by the CFPB: “The new rules will require a new three-day waiting period when there are any changes in the TRID forms. The recommendation is to allow an extra 15 days to close your transactions. In other words, 30-day contracts will now require 45 days, and 60-day contracts will require 75 days.”
The new rules called TRID went into effect on Aug. 1, 2015, and replaced the HUD-1 Settlement and Good Faith Estimate. I assume government abbreviated that to HUS&GFE. TRID is also not to be confused with the NASDAQ symbol TRID which has now been retitled as TRIDQ.
The CFPB’s mission is to rebuild the mortgage banking landscape so that the industry will avoid the type of conditions that led to the Great Recession. The CFPB replaces the Department of Housing and Urban Development for oversight because HUD did not provide specific consumer protection and, I suspect, was not a lengthy enough acronym. Government employees, you know, get pay in grade (PIG) raises by the length of their acronyms.
The states that will be hardest-hit are those in which the agents or principals must be physically present for the closing. Avatars have been discussed, but so far are not being allowed. “Escrow” states (ES), where the documents and signatures are normally submitted a few days prior to closing, will be less likely to have issues.
In “closing table” states (CTS), clients, agents and attorneys are accustomed to routinely making changes at the closing table and still closing the sale on same day. The new three-day waiting period will severely limit this practice for items covered in the TRID documents.
In an escrow state (ES), like Nebraska, for example, all of the stipulations for the transfer of the property and funds are cleared prior to the day of closing. Important documents and funds are held “in escrow” by the assigned escrow agent until the time of the closing. If all stipulations have been met according to the escrow instructions (created between seller, buyer and lender) the closing is final, all funds are disbursed and the sale is final.
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