Beginning October 3rd, a new set of government regulations became effective for all real estate transactions. At first glance, TRID, which stands for TILA / RESPA Integrated Disclosure Rule, seems overwhelmingly complicated. Here is a breakdown of a few fast facts that will help you understand how TRID affects you:
Why the change?
It may feel like a drag to jump through the newly designed hoops, but in fact the changes were implemented to protect you. TRID has even earned a slick nickname “Know Before You Owe.” In short, the changes mean that lenders can’t surprise you with their list of fees associated with your loan at closing. Instead, lenders are required to present an official document of fees at least three days prior to closing. This new protection means you won’t be tallying up what you owe with a pen in your hand as the clock ticks away at your closing. Instead, you have 72 hours to digest how your new mortgage–and its related fees–work.
If this isn’t your first rodeo, and you’ve gone through the process of home buying before, you may remember the set of forms your lender presented to you; one after the initial loan approval, known as a Good Faith Estimate, and later, usually at closing, your breakdown of fees. Because of the TRID changes, you’ll now get that breakdown of fees sooner, and this new disclosure will look remarkably similar to what you already saw after your loan was approved. The only difference is this Closing Disclosure From will actually break down who is responsible for each fee; be it you, the seller, or a third party.
What’s the downside?
So it all sounds great, but what’s the catch? Because the new disclosures are time sensitive, and government regulated, if not presented properly by your loan officer the closing could be delayed. The good news is that loan officers face penalties and fees if that happens, which is an excellent motivation for your loan to be processed correctly the first time. If you’re unsure of where to turn, ask your real estate agent to recommend a loan officer; they will likely have many banks and loan officers that they trust, and in turn, you can trust too.
Is my Realtor affected? Your real estate agent will have to comply with any delays in closing, so more than ever they will want to work closely with you every step of the way: keeping lines of communications open and guiding you with answers to your questions. It’s also likely your agent has attended a TRID class or otherwise educated themselves, making them a great resource to you throughout the home buying process.
Kevin Burklund of Woods Bros Realty said, “With this huge change in federal regulations, buyers have to be attentive and responsive in order to close on time; it’s more important now than ever to have a Realtor involved to keep the transaction on track.”