TILA RESPA Integrated Disclosure (TRID)
Beginning August 1, 2015, the TILA RESPA Integrated Disclosure (“TRID”) rule will be in full effect. This change has been issued by the CFPB and involves the combination of TILA and RESPA rules.
Who does this impact? Every business in the single-family mortgage market. The rule requires a complete change both systematically and operationally. Currently, consumers receive two different but overlapping federal disclosure forms, which has been confusing and unnecessary for the mortgage process.
Under this rule, two new forms were created. The Loan Estimate form is now required to be given to the consumer three days after application and the Closing Disclosure form which must be distributed to the consumer three days prior to the closing of the loan.
· Reduce paperwork and consumer confusion
· Use a consumer-friendly format and language to clarify mortgage process
· Display pertinent information on front page
· Clearly inform the consumer on cost of taxes and insurance
· Assist consumers in determining if the cost is affordable now and into the future by making information readily available within the disclosures
· Clarify penalties on terms of the mortgage
· Provide more reliable cost estimates
· Allow more time to review closing documents giving consumers the opportunity to raise questions and concerns
Preparation for this change is currently underway as companies work to consolidate paperwork and comply with this new regulation. More information will follow as changes are made.