What Should You Know About TRID?

Today, we’ll talk about the TRID Mortgage Disclosure Form, which affects both buyers and sellers. This new integrated disclosure rule is the Federal Government’s attempt to clean up and simplify the mortgage closing process. It helps make things easier to understand for buyers. The rule has a good basis, but it also has some unintended consequences for both parties.

TRID has now gone into effect. Let’s talk about the good stuff first. Buyers will get the payment on the document signed at closing. We love the new look of this document, because buyers are always concerned with payment. It makes sense. Additionally, you will receive the closing documents directly from the lender, instead of the title company.

However, there are some unintended consequences. For instance, changes in concession amounts by the buyer will require a mandatory three-day redisclosure by the lender. This means you can’t change this just before the settlement deadline, before you purchase your new home. You have to do all of that in advance.

Terms now are changing, which can cause confusion here in Utah. Previously, settlement was defined as closing in the Utah real estate purchase contract. Instead of settlement referring to the title company, it now refers to when everything is recorded. This could also be confusing because the Utah real estate purchase contract has not changed its verbiage and I believe the Federal Government will likely override the state’s verbiage. Furthermore, we will use consummation now instead of settlement. Consummation refers to what happens when we submit documents to the title company.

A change in loan will require a new six-day redisclosure. This is a big deal. Lenders will no longer send documents to the title company, but instead, prepare the documents for themselves. Many lenders are not prepared for this. An average escrow period will shift closer to 45 days, making thirty-day closings a thing of the past. Please note we do not advise accepting or writing an offer with a thirty-day settlement, unless the lender confidently fulfills the new rules. Our preferred vendor has assured us that they’re able to stick within this thirty-day time frame.

Thanks again for taking the time to watch our blog! If you have any questions, feel free to call me or email me directly.