TRID Changes to Residential Mortgage Transactions
TRID Overview Video
New changes went into effect for residential real estate transactions on October 3, 2015. Most residential transactions involving a mortgage will use new disclosure forms created by the Consumer Financial Protection Bureau (CFPB). Consumers will receive a new form called the Loan Estimate when they apply for a loan, and the Closing Disclosure will be 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.
- TRID Pointers
- Information for Consumers about Transaction Timing and Closings: This resource, serving as TRID information for buyers, is available on zipForm and will be layered on top of offers in zipForm where TRID rules are likely to apply.
- WRA Addendum TR: Addendum TRID to the Offer. This optional addendum includes closing date, extension provisions, a buyer pre-approval provision, a table of the broker contact information that will be required for the Closing Disclosure, and other drafting considerations. Available in zipForm.
- WRA LegalTalks video on TRID
- April 2015 Legal Update, "RESPA/TILA Integration Overview"
- May 2015 Legal Update, "New TILA/RESPA Disclosure Forms"
- June 2015 Legal Update, "Transaction Time Frame Recalibration"
- "Are You Ready? Big Changes Coming for Residential Loan Applications and Closings" in the July 2015 Wisconsin Real Estate Magazine
- Addendum O resources: pages 11-14 of the January 2010 Legal Update, "Updating Addendum A, Addendum O and Property Condition Reports"
Fidelity National Title Group resources
(Fidelity National Title Group resources courtesy of Linda T. Grahovec, VP, Regional Director of Marketing and Business Development, CFPB Leader)