Unlocking answers to the most important TRID questions
What transactions does the new TILA-RESPA rule cover?
The rule applies to most consumer credit real property transactions with the except on of HELOCs, reverse mortgages, and mortgages secured by a mobile home or a dwelling that is not a'ached to real property, such as land. The rule also does not apply to loans issued by a lender who is not considered a creditor, such as a private lender.
Under what circumstances would the three-business-day waiting period for review of the closing disclosure form start over, and how will this affect my closings?
It is a requirement of the new rule that consumers have the opportunity to review their final Closing Disclosure Form at least three business days prior to closing. However, the only changes to the form that would start the waiting period over are changes to the following:
The loan’s APR beyond specific tolerance (typically .125%)
The loan product (such as going from a fixed rate to an ARM, or FHA to conventional)
The addition of a prepayment penalty
Any other minor changes to items on the form can be made without necessitating a new waiting period, and your scheduled closing can proceed as planned.
As a real estate agent, what are the most important things to be prepared for?
Because TRID requires different timelines, it is expected that we will see transactions take longer to close than they currently do. Closing a transaction in thirty days will be difficult; closing in less time than that may be next to impossible. These timelines will also necessitate that inspections, repairs, and walk throughs be completed earlier. It is important to be prepared for these extended time frames and appropriately build more time into your contract dates to accommodate these and set realistic expectations for the consumer.
It is also critical that agents become familiar with these new forms and where the information is housed on each. For example, the new forms will no longer have line numbers to refer to, and some costs may be listed in a different area of the form than they currently are. It is important to be familiar with where costs are likely to be shown so as to easily review these with the home-buyer.
Where can I view the new forms and find additional resources and information related to the new rule?
The CFPB’s website has numerous detailed materials available to review and download, including a comprehensive compliance guide as well as samples of all of the new disclosure forms. Visit their site www.cfpb.gov to find these resources. You can also submit specific questions or concerns directly to the CFPB by emailing CFPB_RegInquiries@cfpb.gov or leaving a voicemail message at 202-435-7700.