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Realtor’s Guide to TRID
TRID is a new regulation that combines mortgage disclosures to improve compliance and help borrowers understand loan terms. It impacts realtors, lenders, and clients. Key changes include integrating Good Faith Estimates, Truth-in-Lending disclosures and HUD-1 Settlement Statements into new Loan Estimate and Closing Disclosure forms. Lenders must provide these documents within specific timelines, including delivering the Closing Disclosure 3 business days before closing. Realtors must familiarize themselves with the new requirements and ensure timely communication between all parties to avoid delays.
Realtor’s Guide to TRID
- 1. Realtor’s Guide toTRID Everything you need to know about TRID – what to expect and how to handle it! The W’s What Who When The Forms Loan Estimate Closing Disclosure 3 Business Days Timelines Calendars Rules and Exceptions TRID & Your Clients What it means for your clients The real estate industry will undergo major changes on October 3rd, 2015, when TRID (TILA/RESPA Integrated Disclosures goes into effect). We’ll walk you through each change and outline the best practices so that you can provide the best experience for your clients. New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd. Ste. 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363
- 2. FORMS WHAT’S NEW Loan Application LoanEstimate Closing Disclosure TRID is an acronym for TILA-RESPA Integrated Disclosures. The Dodd- Frank Act required the CFPB to combine disclosure documents to improve compliance and help borrowers understand loan terms. This regulation is known as TRID. The major changes are outlined here. We don’t want you to worry about reading all 1,888 pages of regulation. So, we’ve created this guide that includes everything you need to know, what to expect and how to handle it! TRID WHAT IS IT? RULES WHAT’S CHANGED Intent to Proceed 3 Day Disclosures New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363 What is TRID? What is it? What’s new? What’s changed? 02
- 3. Who is impacted? Realtor’sGuide to TRID 03 LENDER Lenders will play an even more important role in closings. They will provide the Loan Estimate and Closing Disclosure. REALTORS Realtors must stay on top of the changes and follow new timelines. Last minute changes will need to be communicated to all parties. CLIENTS Clients will need to provide intent to proceed and review documentation for changes. New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363
- 4. 04 October 3rd, 2015 BeginningOctober 3rd, 2015 old disclosures can no longer be used for any applications received on or after this date. TRID! New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363
- 5. Rules & Exceptions Whatloans does this apply to? What is excluded? TRID Rules & Exceptions These rules apply to most mortgages with the exception of home equity lines of credit (HELOCs), reverse mortgages and mortgages for dwellings not attached to land. These exceptions as well as mortgage applications taken prior to October 3rd, 2015 will continue with traditional GFE and TIL forms. × Does NOT Apply × Home Equity Lines of Credit (HELOC) × A line of credit with a maximum × Reverse Mortgages × Loan secured by a Mobile Home or Dwelling that is not Attached to Real Property. Does Apply First Mortgages: Purchase and Refinance Closed-end Home Equity Loans Vacation and Second Homes which include Time Shares & Intervals Loans on 25 Acres or More Vacant Lot (Subdivision) Loans Construction-Only Loans New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363 05
- 6. Loan Application &Integrated Documents ABOUT THE FORMS CHANGES LOAN APPLICATION LOAN ESTIMATE CLOSING DISCLOSURE The major change TRID brings for realtors is the integrated documents. Four documents have now been made into two – the Loan Estimate and Closing Disclosure. The forms mirror each other at application and closing, so your clients can easily compare and address changes. Also, less information is required on loan applications. New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363 06
- 7. Loan Application No “catchall” item! 07 Under the new TILA-RESPA ruling, a loan application is defined as the collection of these 6 items: 1) borrower’s name, 2) borrower’s social security number, 3) borrower income, 4) property address, 5) estimate of property value, and 6) mortgage loan amount. The “catch all” seventh item is no longer required to complete the mortgage application. NAME SSN INCOME ADDRESS VALUE AMOUNT New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363
- 8. Loan Estimate Two formsbecome one, simple! 08 Good Faith Estimates and Truth in Lending Disclosures forms will be combined into a new three (3) page form, the Loan Estimate or “LE”. Loan Estimates must be delivered to the borrower within three (3) business days of taking a loan application. The purpose of the LE is to provide borrowers with the lender’s costs as accurately as possible. GFE LOAN ESTIMATETIL+ = New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363
- 9. Closing Disclosure Just anintegrated form! 09 Another major form integration replaces the HUD-1 Settlement Statement and final TIL disclosure with the Closing Disclosure or “CD”. The new five (5) page CD must be delivered to the borrower at least three (3) business days prior to closing. The days of the one-day delivery requirement for the HUD-1 are behind us. Changes in the loan terms could trigger an additional three-day waiting period, even with the “bona fide financial emergency” exception. HUD-1 CLOSING DISCLOSUREFINAL TIL+ = New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363
- 10. 3 Day Disclosures What3 Day Disclosures means for you and your clients 10 Lenders will responsible for delivering the Closing Disclosure to clients at least three business days prior to closing. This ensures that clients have enough time to review the terms of the loan before they get to the closing table. The Closing Disclosure will mirror the information contained on the Loan Estimate so it’s easy for clients to compare any changes. Last minute changes that alter the loan terms will be difficult as they may trigger a new 3-day waiting period. These major changes include an increase of the APR, the addition of a prepayment penalty or changes in the loan product. There is flexibility with small, typical changes of the purchase transaction such as problems discovered on walk-throughs. These changes will simply require an updated disclosure. TIMELINE The timely delivery of new forms and documents will be critical to ensure that your closings go smoothly. A timeline of the new closing process is shown on the following page. CALENDAR A calendar is helpful to track your timeline to closing. See our calendar to be sure you are on track with the 3 day disclosure rule. New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363
- 11. New Lending DisclosureTimeline Follow this timeline for smooth and on-time closings! 11 LOAN ESTIMATE Application & Loan Estimate After submitting an application, the lender with prepare and deliver an initial Loan Estimate within 3 days. Client’s Intent to Proceed Client must display intent to proceed. Review and Signing Closing Disclosure Clients will review CD for changes when received and sign at closing table. Meet with Personal Loan Consultant Discuss loan options that best fit your client’s needs. Closing Disclosure CD must be delivered to the borrower at least three (3) business days prior to closing. CLOSING DISCLOSURE 3 Business Days CLOSING CLOSING HOME SWEET HOME! On-time closing for your client. New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363
- 12. Three-Day Closing DisclosureRule WednesdayMonday Tuesday Thursday Friday Saturday 12 For Closing on And the CD mailed on the Disclosure is due on the Previous Saturday Previous Thursday Previous Friday Previous Monday Previous Tuesday Previous Wednesday Previous Wednesday Previous Monday Previous Tuesday Previous Thursday Previous Friday Previous Saturday NOTE: If a federal holiday falls in the 3 day period, an additional day will be taken for CD delivery. New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363
- 13. What does TRIDmean for your clients? Realtors and lenders are often at the center at the closing table. Familiarize yourself with the new practices so you can provide the best experience for your clients. Open the Lines of Communication Open the lines of communication between you, your clients and the lender. Avoid last minute changes by keeping your client informed every step of the way. If anything does happen to change the transaction, be sure to communicate and confirm those changes with all parties. Build the Dream Team Build your dream team of people you can rely on to provide complete and accurate information for your clients. Any hiccup in sharing information will slow down your process significantly. The lender you choose will be the answer to keeping you on your timeline and closing quick. Understand the Changes Get familiar with the new disclosure documents. Four disclosures have now been integrated into two documents to improve compliance and help borrowers understand their loans. Create A Timeline Realtors should develop new timelines and practices to adhere to these changes. Aim to prepare documents 7 days prior to closing so your clients have enough time to review the loan and make changes if needed. Consider doing two walk-throughs with your clients. New America Financial Corporation | Mortgage Lender License NMLS #183215 | 2273 Research Blvd., Ste 700 | Rockville, MD 20850 | Toll Free: 1-800-531-5363 12