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The Importance of Trid When It Comes to Real Estate Closings

Founding Member of Moshes Law, P.C.
During his years of practice, Yuriy has concentrated in litigation and real estate transactions as his areas of expertise.

trid real estate

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 Rule. Failure to adhere to the rule may invalidate your closing.

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What is TRID?

During your loan application, you may have come across an important term. What does this term represent? It’s frequently used to refer to the TILA RESPA Integrated Disclosure rule. This rule, also known as the Know Before You Owe or ‘KYBO’ mortgage disclosure rule, is a crucial component of our Know Before You Owe mortgage initiative. Can you elaborate on the essence of this law? And what does the regulation entail?

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 (also known as the CFPB) oversees and handles all mortgage rules, regulations, and guidelines related to disclosure in the housing industry.

Over time, these guidelines and mortgage rules have undergone revisions and updated their respective forms. Therefore, it’s crucial to keep abreast of any changes in regulations from the Consumer Financial Protection Bureau pertaining to housing disclosures.

What Are the New Forms for TRID?

When considering mortgage compliance standards, multiple real estate forms and disclosure documents are required to address loan processes, mortgages, disclosures, and explain what constitutes a compliant loan. These mandated forms encompass a range of essential elements, including 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
  • Refinance
  • 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 November 20, 2013, the CFPB implemented significant real estate alterations that modified the disclosure requirements. They unveiled a new integrated disclosure rule, comprising 1,900 pages, altering the existing regulations. This newly established rule necessitates the use of two additional 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.

trid real estate changes

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’s the acronym for TILA-RESPA Integrated Disclosure again? It stands for the Truth in Lending Act and the Real Estate Settlement Procedures Act. This framework is significant as it establishes guidelines for real estate transactions and disclosures during property closing and mortgage application.

For consumers, the requirements ensure they receive closing information at least 3 days before their settlement date. These changes give consumers more time to understand financial disclosures before finalizing the deal. If they have questions about the forms, they have ample time to seek clarification before closing.

As for mortgage lenders, the new regulations mandate them to prepare the consumer’s settlement documents, a responsibility previously handled by title companies. This prompts loan officers to adjust their procedures to integrate this responsibility, resulting in changes to deadlines for the new forms.

Additionally, the revisions redefine the mortgage loan application process, limit cost increases throughout the mortgage journey, and introduce a three-day waiting period from the consumer’s receipt of disclosure information until the settlement date, specifically for mortgage loans. Any changes to the disclosure information trigger an additional three-day waiting period before the mortgage loan settlement can proceed.

Bonus: Useful Links

Below are several internet links you may find useful to learn more about guidelines and requirements related to real estate transactions.

● Federal Mortgage Disclosure Requirements

● TILA-RESPA integrated disclosures

Why You Need An Attorney

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.

Furthermore, it’s crucial to consult with a proficient attorney knowledgeable about the extensive set of guidelines and regulations governing real estate transactions. This expert can offer comprehensive explanations and ensure your closing process adheres to all relevant standards and rules in the field.

Law Office of Yuriy Moshes

At Law Office of Yuriy Moshes, we are experienced in such matters, especially when it comes to 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.

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