TRID Changes to Residential Mortgage Transactions

Changes went into effect for residential real estate transactions on October 3, 2015. Most residential transactions involving a mortgage now use disclosure forms created by the Consumer Financial Protection Bureau (CFPB). Consumers receive a Loan Estimate when they apply for a loan, and the Closing Disclosure is used at closing instead of the HUD-1.

The Truth-in-Lending Act/RESPA Integrated Disclosure (TRID) rules create timing requirements for lenders’ delivery of these new disclosure documents to consumers. Transactions may be delayed if certain changes occur near closing. Lenders must deliver the Closing Disclosure to buyers at least three business days before closing. Most last-minute changes will require a revised Closing Disclosure and certain changes will require another three-business-day waiting period. 

Communication with the lender, title company, the parties and other providers will be key. Making sure that offer issues are resolved and providing closing information early will be crucial. Brokers should inform clients and customers that closing timelines may be different than in the past and may wish to include offer provisions to protect the parties should there be a TRID-generated closing delay.

The resources below can help you better understand the new forms and laws as well as draft offers and navigate transactions in a manner that minimizes the possibility of any closing delays.