What TRID Means for the Consumer

Know Before You Owe

What does TRID stand for? TRID is the TILA/RESPA Integrated Disclosure rule. Only the mortgage world would make an acronym out of acronyms! TILA is the Truth in Lending Act and RESPA is the Real Estate Settlement Procedures Act. The Consumer Financial Protection Bureau modified both rules and, as of October 3, we have TRID. Many are referring to this rule as the Know Before You Owe rule. Whatever you decide to call it, here is what it means to you, the consumer.

First, consumer disclosures are now very easy to read. The Loan Estimate forms clearly set forth the terms of the proposed transaction to help the borrower determine whether they would like to proceed with the transaction.

Next, consumers will be given their Closing Disclosure early. Before closing (Which is now called a “Consumation”) on a home purchase or refinance, consumers must receive a copy of their Closing Disclosure at least 3 business days prior to closing so if they have questions, their loan officer can provide them with additional information. The format of the Closing Disclosure also mirrors the Loan Estimate to make comparison easy.

The new rules have extended the typical closing time from 30 days to 45 as lenders adapt to the new forms; however, we expect processing times will return to normal after a few months.

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