Its here! You may not even know it! The new TRID guidelines and disclosures. I know what your thinking...what the heck is that? The more precise name is the TILA -RESPA Integrated Disclosure.
It began in early October this year and provides clearer and more simplified real estate closing transactions. There are new forms at the time of applying for a loan and closing that provide a better understanding of what is being taken on by the consumer. A home buyer with financing will be provided with an easier way to shop to compare rates, terms, and conditions. This new regulation will prevent surprises at closing such as fees, rate change, etc. If fees increase or the rate changes even a small percentage (more than 1/8%), the closing will not take place and will require a new closing disclosure.
The lender is required, now under TRID, to provide the loan estimate within three days of receiving the loan application. The lender cannot charge any fees to the buyer until the buyer decides to proceed. Also, the new Closing Disclosure Form must be provided to the buyer a minimum of three business days before closing. This period allows the buyer to digest and consume all the information on the closing statement, ask questions, or even decide against the loan product. The lender is also required to obtain proof that the buyer had these in their possession at least three business days before they can close.
What do all these new rules change? The buyer should now be better informed and have a better understanding of what they are getting into. With the new time rules, the days of the 30 day closing is pretty much gone for home buyers with financing. I have spoke with several lenders and banks and they are stating "don't send us a 30 day contact... 45 days is the new minimum."
These TRID rules do not apply to certain types of loans such as commercial or business loans. Cash buyers who are not using financing also are not under these rules.
I am communicating with my clients, both buyers and sellers, to be prepared for when offers and contracts are submitted that a longer period will be potentially required. Want more information? Contact me for help!
Can't sleep... the CFPB has more?! http://www.consumerfinance.gov/blog/know-before-you-owe-making-the-mortgage-process-easier-for-you/
-MLW
It began in early October this year and provides clearer and more simplified real estate closing transactions. There are new forms at the time of applying for a loan and closing that provide a better understanding of what is being taken on by the consumer. A home buyer with financing will be provided with an easier way to shop to compare rates, terms, and conditions. This new regulation will prevent surprises at closing such as fees, rate change, etc. If fees increase or the rate changes even a small percentage (more than 1/8%), the closing will not take place and will require a new closing disclosure.
The lender is required, now under TRID, to provide the loan estimate within three days of receiving the loan application. The lender cannot charge any fees to the buyer until the buyer decides to proceed. Also, the new Closing Disclosure Form must be provided to the buyer a minimum of three business days before closing. This period allows the buyer to digest and consume all the information on the closing statement, ask questions, or even decide against the loan product. The lender is also required to obtain proof that the buyer had these in their possession at least three business days before they can close.
What do all these new rules change? The buyer should now be better informed and have a better understanding of what they are getting into. With the new time rules, the days of the 30 day closing is pretty much gone for home buyers with financing. I have spoke with several lenders and banks and they are stating "don't send us a 30 day contact... 45 days is the new minimum."
These TRID rules do not apply to certain types of loans such as commercial or business loans. Cash buyers who are not using financing also are not under these rules.
I am communicating with my clients, both buyers and sellers, to be prepared for when offers and contracts are submitted that a longer period will be potentially required. Want more information? Contact me for help!
Can't sleep... the CFPB has more?! http://www.consumerfinance.gov/blog/know-before-you-owe-making-the-mortgage-process-easier-for-you/
-MLW
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