Last month, the Consumer Finance Protection Bureau announced that it will be implementing a new disclosure law entitled TILA-RESPA Integrated Disclosures (TRID). RE/MAX Results associates have been preparing for months to ensure they are informed about the update so that you have a smooth transaction and positive home buying and selling experience.
So what do you, as a consumer, need to know about the changes? Lynn Foulke, CEO of RE/MAX Results, provided answers to some basic questions below. Keep reading to learn more!
1. What is TRID – TILA/RESPA?
TRID refers to the new TILA/RESPA integrated disclosures. The lender Good Faith Estimate and the early TILA form have now become the new LOAN ESTIMATE and the HUD-1 Settlement Statement and the final TILA have now become the CLOSING STATEMENT.
TILA is an acronym for the Truth in Lending Act of 1968. Here the Federal Reserve Board enacted this statute to promote the informed use of consumer credit with clear disclosure of terms. RESPA is an acronym for the Real Estate Settlement and Procedures Act of 1974. Here Congress passed this act to prevent kickbacks and bait-and-switch lending tactics in real estate transactions.
Both Acts are alive and well today serving to protect consumers.
2. What is the CFPB?
The CFPB is an acronym for the Consumer Finance Protection Bureau established in 2013. This government agency was created to protect consumers and make financial products easier to understand. It also published the new integrated disclosures known as TRID which consists of the LOAN ESTIMATE and the CLOSING STATEMENT.
3. How does this affect me and my homebuying/selling experience?
With the use of consistent national disclosures, consumers are encouraged to shop for their financial products. The concept is that this shopping will occur after the acceptance of a purchase agreement and delivery of the purchase agreement and other required information to a lender. Upon receipt of the required information, lenders are required to issue a LOAN ESTIMATE. Subsequent LOAN ESTIMATES can be requested from several lenders and with the use of these identical forms, the consumer will have the opportunity to shop for their financial services. It is recommended that you talk with your loan officer and real estate professional as to the process and the effects on your specific transaction.
It is highly likely that it will take longer (than before TRID) to get to the closing table. Many lenders are recommending at least 45 days between receipt of all required information until the closing date.
Additionally buyers are given a 3-business day non-waivable time frame upon which to review the CLOSING STATEMENT. Delivery regulations can easily stretch this process to 7 – 10 days or even longer.
4. What do I need to do to ensure a smooth transaction?
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Consult with a loan officer and your real estate professional early and often during your transaction.
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Make sure you understand what financial information is required at what time.
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Recognize that delays in sending complete financial information to your loan officer could delay your closing date or affect your ability to close.
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Notify your loan officer immediately if your financial information changes.
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You must express your intent to proceed with your chosen lender within 10 days of application to prevent the LOAN ESTIMATE from expiring.
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Make certain that your real estate professional submits transaction information to your chosen title company as early in the process as possible. This information includes the commission, license number, additional broker commission, information regarding any association dues and contact information (phone, email address, etc.).
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Choose your real estate professional, lender and title company wisely. Ask them questions that will convince you that they are knowledgeable and well prepared for TRID.
Again, RE/MAX Results Sales Associates are prepared for the change in regulations and will be there to assist you every step of the way. Should you have any questions before or during your home buying or selling process, do not hesitate to reach out to your agent.