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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 (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 might have encountered a significant term during your loan application process. So, what exactly does this term signify? It’s an abbreviation often used to describe the TILA RESPA Integrated Disclosure rule. This regulation, also recognized as the Know Before You Owe or ‘KYBO’ mortgage disclosure rule, is a vital element of our Know Before You Owe mortgage initiative. Could you explain the essence of the TRID law? What about 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 (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 full form of TRID again? It’s an acronym for TILA-RESPA Integrated Disclosure. TILA stands for the Truth in Lending Act, and RESPA stands for the Real Estate Settlement Procedures Act. TRID holds significance because it sets the guidelines for real estate changes and disclosure during property closing and mortgage application.

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.

Regarding mortgage lenders, TRID necessitates them to now prepare the consumer’s settlement documents. Previously, the title company handled the HUD forms and passed them to the lender for review, but the responsibility for disclosure forms always lay with the title company. As a result of these real estate changes, loan officers must integrate this responsibility into their procedures, prompting adjustments in deadlines for the new forms.

Moreover, the TRID real estate alterations redefine the application process, limit cost increments during the mortgage journey, and introduce a three-day waiting period from the consumer’s receipt of disclosure information until the settlement date. Any modifications made to the disclosure information trigger another three-day waiting period before the consumer can proceed with the settlement.

Bonus: Useful Links

Below are a number of internet links you may find useful to learn more about TRID guidelines and TRID requirements.

● Federal Mortgage Disclosure Requirements

● TILA-RESPA integrated disclosures (TRID)

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.

Moreover, it’s important to reach out to a skilled attorney well-versed in TRID and its extensive set of guidelines and regulations. This expert can provide thorough explanations and ensure your closing process complies with all the applicable TRID standards and rules.

Law Office of Yuriy Moshes

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.

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