TRID: Things to Know

A REALTOR® does much more than list & sell homes and collect commission. There are intricacies every step of the way with a transaction. In some states attorneys are part of the equation. In Colorado, your REALTOR® oversees the transaction from start to finish.

Is your REALTOR® knowledgeable when it comes to all of the forms and legal jargon?

Will you have surprises at the closing table?

Has your REALTOR® taken classes and gone to seminars to stay up-to-date with the changing rules and regulations that are designed to protect the consumer?

Do you have time to study and understand everything you are signing?

1.TRID is an acronym for Tila/Respa Integrated Disclosure Rule. Also known as Know Before You Owe. This is an acronym from an acronym. TILA = Truth in Lending Act and RESPA = the Real Estate Procedures Act.

2. The new rules went into effect on October 3, 2015.

3. It is important to know about TRID if you are BUYING or SELLING a home. As a buyer, the new rules relate to your mortgage. As a seller, you need to know if there is the possibility of a delay at the Closing table and thus a delay in the funding of the sale.

4. Choose a lender who understands the NEW process. This a sweeping change in the mortgage industry and your lender should be able to explain all of the settlement service fees from application to closing. Lack of understanding of the rules leads to mistakes, and some of those can be quite costly. Choose an experienced REALTOR® who understands the NEW process and can be your advocate with your new mortgage loan or a watchdog to the selling side of a transaction. An experienced REALTOR® deals with all of these forms and rules on a regular basis and is your trusted guide in all parts of the process.

5. TRID replaces 3 forms with 2 forms. The changes are intricate and with understanding can lead to a smooth transaction, or to a nightmare for the uninformed.

6. With the new changes, Lenders must give a Loan Estimate to the borrower 3-days after the mortgage application.

7. With the new changes, the Borrower must receive the Closing Disclosure 3 business days PRIOR to closing.

8. If specific changes are made at the closing table, the Closing must be delayed 3 business days. Specific changes for the 3-day review are: The APR increases by more than 1/8 of a percent for fixed-rate loans or ¼ of a percent for adjustable loans; a prepayment penalty is added; the basic loan product changes (such as a switch from fixed to adjustable interest rate, or a loan with interest-only payments).

9. This is the link to the government TRID website, http://www.consumerfinance.gov/regulatory-implementation/tila-respa. As a normal consumer, I challenge you to understand the guidelines the government has published for your “understanding”

 

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