TRID - RESPA Integrated Disclosure Rule

TRID, which stands for Truth-In-Lending – RESPA Integrated Disclosures,

TRID is a new consumer disclosure law that goes into effect on October 3, 2015. TRID will significantly change the way a mortgage lender discloses terms and fees of most residential mortgage loans to an applicant as it requires the replacement of the Good Faith Estimate, Final Truth-in-Lending Disclosure, and HUD-1 Settlement Statement with new disclosures known as the Loan Estimate and Closing Disclosure. 

Loan Estimate

This document will replace the current “Good Faith Estimate” and “Truth in Lending” disclosures. Lenders are required to issue a Loan Estimate within 3 days of receipt of a mortgage application or after any changes are made to the loan terms. Closings are not allowed to take place within 7 business days of the date on the most recent Loan Estimate in order to provide consumers with sufficient time to review the disclosure. 

Closing Disclosure

This document will replace the current “HUD-1 Settlement Statement” and final “Truth in Lending Statement” and is designed to more clearly outline all of the final closing fees and terms of the loan just before closing. This Closing Disclosure is required to be provided to the consumer a least 3 business days prior to the closing. 

The new Sellers Disclosure may be used to disclose the seller’s terms of the transaction separately. This communication summarizes the important aspects of the new document.

OVERVIEW OF THE SELLER'S CLOSING DISCLOSURE

• The settlement agent is required to provide the seller with the Closing Disclosure reflecting the actual terms of the seller’s transaction.
• The settlement agent may comply with this requirement by providing the seller with a copy of the Closing Disclosure provided to the buyer if it also contains information relating to the seller’s transaction.
• The settlement agent may also provide the seller with a separate disclosure, including only the information applicable to the seller’s transaction from the Closing Disclosure.
• The settlement agent must provide the seller its copy of the Closing Disclosure no later than the day of consummation.

Visit the Consumer Financial Protection Bureau (CFPB) website for additional information and to answer any additional questions you have regarding the Sellers Disclosure: http://www.consumerfinance.gov/regulatory-implementation/tila-respa/.

new-mortgage-rules-and-disclosures