If you are a real estate agent or are closing on a house in NY, you need to adhere to the TILA-RESPA Integrated Disclosure (TRID) Rule. Failure to adhere to the rule may invalidate your closing.
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As such, this article shall address the following:
- What is TRID?
- Who Writes the Rules for TRID?
- What Are the New Forms for TRID?
- TRID’S Main Changes
- Bonus: Useful Links
What is TRID?
You may have come across the term TRID when you’ve applied for a loan. So, just what is TRID? The TRID definition is acronym that some people use to refer to the TILA RESPA Integrated Disclosure rule. This rule is also known as the Know Before You Owe or “KYBO” mortgage disclosure rule and is part of our Know Before You Owe mortgage initiative. What is the TRID law? What is the TRID regulation?
Under TRID, when it comes to mortgages, the mortgage companies are required to provide certain disclosure information that consumers receive when they apply for and close on a mortgage under the Truth in Lending Act (TILA) with the settlement disclosures under the Real Estate Settlement Procedures Act (RESPA).
Who Writes the Rules for TRID?
The Consumer Financial Protection Bureau (known more familiarly as the CFPB) regulates and manages all TRID mortgage rules, TRID regulations, and TRID guidelines regarding TRID disclosure.
Over the years, the TRID guidelines and TRID mortgage rules have changed and have updated their forms. Accordingly, it is important to stay current with any updated TRID regulations form the Consumer Financial Protection Bureau.
What Are the New Forms for TRID?
When it comes to TRID mortgage compliance, there are various TRID real estate form or disclosure forms that are mandated by TRID that addresses TRID loan, TRID mortgage, TRID process, TRID disclosure, and answers what is a TRID loan. This includes, but not limited to:
- Annotated loan estimate
- Blank loan estimate
- Blank loan estimate, with optional alternative tables for transaction without seller
- Fixed rate loan
- Interest only, adjustable rate loan
- Balloon payment
- Negative amortization
- Annotated closing disclosure
- Blank closing disclosure
- Blank closing disclosure, with alternative disclosures and modifications permitted for transactions without a seller
- Illustrating disclosure provided to seller
- Blank escrow cancellation notice
- Blank written list of service providers
- Blank written list of service providers, with optional additional list of services you cannot shop for.
On 11/20/13, the CFPB enacted TRID real estate changes effectively changing the TRID disclosure requirements. CFPB released a new integrated disclosure rule by releasing 1,900 pages changing the TRID rules. This rule mandates two new disclosure forms.
The first form is the Loan Estimate disclosure form, which provides a summary of estimated loan terms, loan and closing costs, and disclosures. This form blends the Real Estate Settlement Procedures Act’s Good Faith Estimate with Truth in Lending Act provisions.
The second form is the Closing Disclosure form, which provides a summary of the actual loan terms, loan and closing costs, and other disclosures. This form integrates the Truth in Lending and the Housing and Urban Development or “HUD” settlement statement.
This 11/20/13 new rule applies to most closed-end mortgages; however, it does not apply to mobile home mortgages, home equity lines of credit, reverse mortgages, or to creditors who close five or fewer loans in a year.
TRID’S Main Changes
What does TRID stand for again? It stands for TILA-RESPA Integrated Disclosure. TILA refers to the Truth in Lending Act and RESPA refers to the Real Estate Settlement Procedures Act. TRID is important because it establishes the TRID real estate changes and disclosure guidelines when it comes to closing on your property and applying for a mortgage or TRID mortgage.
For the consumer, the TRID requirements provide that the consumer must receive closing information at least 3 days before their settlement date. These TRID real estate changes gives the consumer more time to review and understand the financial disclosures before they go to settlement. If they do not understand something on the disclosure forms, they will have sufficient time to ask questions before their closing.
For the mortgage lenders, the TRID requirements provide that they are now responsible to prepare the consumer’s settlement forms. In the past, the title company completed the HUD forms and gave them to the lender for review; however, the responsibility for the disclosure forms had always been with the title company. These TRID real estate changes then forces the loan officers to have to absorb this responsibility into their procedures. As such, the change in rules then require new deadlines for the new forms.
In addition, the TRID real estate changes also changes the application definition, tightens the ability to increase costs throughout the mortgage process, and adds the three-day waiting period that runs from the date the consumer receives the disclosure information up until the settlement date. If the lender modifies the disclosure information, then another three-day waiting period applies before the consumer can go to settlement.
Bonus: Useful Links
Below are a number of internet links you may find useful to learn more about TRID guidelines and TRID requirements.
Why You Need An Attorney
As you can tell, the TRID guidelines and rules, including all of the recent updates, can be complicated and difficult to follow. As you should with any NY transaction involving real estate, you should always contact a real estate attorney to discuss the process, review your documents, and explain what needs to be done.
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Furthermore, you should definitely contact an experienced and knowledgeable attorney familiar with TRID and its many guidelines and rules, so that they can explain TRID to you and ensure that your closing adheres to all of the TRID guidelines and TRID regulations.
At Law Office of Yuriy Moshes, we are experienced in such matters, especially when it comes to TRID and real estate closings in New York. We represent buyers and sellers in the greater New York City area including all its boroughs, including Manhattan, Brooklyn, Queens, the Bronx, and Staten Island) as well as Northern New Jersey, Long Island, and Upstate New York.