In the wake of the 2008 financial crisis and in response to the Dodd-Frank Act, the Consumer Financial Protection Bureau (“CFPB”) developed and enacted the TILA-RESPA Integrated Disclosure (“TRID”) rule. TRID went into effect October 3, 2015, and brought about numerous changes in the transactional real estate world. These changes affect everyone involved in closed-end real estate transactions, including buyers, sellers, realtors, lenders, and settlement agents. Jeffrey Schummer, VP of Education Development at the MBA commented:
"TRID is 1,888 pages in length and affects every business functioning in the single-family mortgage market. Compliance with this new rule requires major systems and operational changes."
The CFPB developed and designed the integration of TILA and RESPA and the consolidation of forms associated with most closed-end real estate transactions to make shopping for a loan easier, as well as to protect consumers from unexpected changes at the closing table.
There were two primary changes associated with TRID.
- The Loan Estimate form replaced the Good-Faith-Estimate (GFE) and Initial Truth-in-Lending (TIL) forms
- The Closing Disclosure form replaced the HUD-1 and Final TIL forms
- Timing Requirements
- The Loan Estimate must be provided by the lender within three business days of receipt of the buyer(s)’s loan application
- The initial Closing Disclosure must be delivered to the buyer(s) (by the lender or the settlement agent, dependent upon circumstances) at least three business days prior to the closing of the loan
As the professionals at Stewart Title so succinctly stated, “The Consumer Financial Protection Bureau’s whole purpose is to ensure that consumers get the information they need to make the financial decisions they believe are best for themselves and their families. As a title company, we can get behind that.”
As your settlement agent, we, too, are behind that. Be assured that Goosmann Rose Colvard & Cramer, P.A. steadfastly works to ensure we meet any challenges together. The continued cooperation with our network of professionals, a little bit of patience all around, and a lot of communication and teamwork will guarantee any successful transition in our industry.
A phrase used often in current industry media is “Collaboration is King.” This sums our and this industry up nicely. Lenders and settlement agents, realtors and their clients, buyers and sellers will all have to work side by side to build a streamlined closing, one with full of transparency and security and comfort for all parties. The better the team of persons with which you surround yourself in a closing transaction, the better your closing experience.
Not every real estate transaction will be subject to TRID, so there will in some cases be a HUD-1 Settlement Statement closing. The following types of transactions are sometimes exempt from the TRID rule:
- Home-equity lines of credit (“HELOCs”)
- Reverse mortgages
- Loans secured by a detached dwelling, such as a mobile home or vacant land
- Loans written by creditors who write five or fewer notes per year (ie: seller or private financing)
For anyone seeking further education on TRID, there is a multitude of resources available. Stewart Title has a nicely compiled list of useful links on their website. This resources page also has links regarding ALTA Best Practices, which GRCC is proud to follow.