As the industry prepares to implement and adapt to a new regulation, we dissect TRID and all it involves.

 

The TRID changes are not simply about two new disclosures in the mortgage loan process. TRID narrows what impacts an application, amends acceptable tolerances, and significantly impacts the timing, delivery, and workflow of key policies and procedures. Keep in mind these new disclosures are not to be used prior to August 1, 2015.

 

Applications will be defined as consisting of the six core items and is considered complete when all elements have been provided:

·      Borrower’s name

·      Borrower’s income

·      Borrower’s social security number for credit report

       o   Could also be a Tax EIN

·      Property address

·      Estimate value of the property

·      Loan amount sought

 

The Loan Estimate (“LE”) is generally the same information as a GFE and TIL combined but will be presented in a new format including fees disclosed alphabetically, the important dates section will be removed, APR will be deemphasized, itemization of settlement charges will be increased, there will be no disclosure of lender paid broker compensation, and the projected payments table will be enhanced replacing the payment schedule. The LE disclosure must be delivered to the borrower within three business days after the completed application is received, or within seven business days before consummation.

 

When providing the Loan Estimate, no fees may be imposed on the borrower and the creditor cannot require documents verifying information related to the application before he or she has received the LE and indicated intent to proceed with the transaction. Additional disclosures must also be included if a borrower is provided with a written estimate of terms or costs before the LE is received.

 

The Closing Disclosure (“CD”) provides generally the same information as a HUD 1 settlement statement and the Final TIL. The CD must generally contain the actual terms and costs of the transaction as well as be in writing and contain the information prescribed in 1026.38, including loan terms, projected payments, costs at closing, loan costs, summaries of transactions, loan disclosures, escrow account, loan calculations, confirm receipt, etc. This disclosure must be received by the borrower no later than three business days before consummation which will impact the scheduling of all closings on loans after August 1. Consummation here is defined as the time the consumer becomes contractually obligated on the transaction, or the date the note is signed.