TRID (TILA RESPA Integrated Disclosures) is part of the Dodd Frank Wall Street Reform Act of 2010 and established the CFPB. This bureau was required to develop new forms for communicating mortgage loan information to consumers. New rules have also added to the existing framework.
When does TRID go into effect?
The new rules and forms are required on mortgage loan applications taken on or after October 1, 2015.
What remains the same?
Many parts of the current rules will remain in place. Borrowers are required to have disclosures delivered or placed in the mail within three business days of an application. There are tolerances that limit any changes from what was originally disclosed. In certain cases, changes in the information are allowable.
The short answer...several things. There is a new Loan Estimate which replaces both the Good Faith Estimate and the Initial TIL. The new Closing Disclosure replaces both the HUD – 1 and the Final TIL and needs to be received by the borrower three business days prior to closing. The definition of an application is changing from seven items to only six.
Is the devil in the details?
Yes. Who delivers the closing disclosure and how it is delivered is key. APR changes of .125% (fixed rate loans) or .25% (variable rate loans) can trigger re-disclosure and a three-day waiting period. The new definition of what constitutes an application will mean many more disclosures to be required and often times sooner. Increased penalties with these new rules and heightened enforcement is also expected.
What are the keys to success?
Review and establish your plan now if you haven't already. Because this affects nearly every loan file, prepare to train your staff even more than you think you should. With aggressive enforcement already underway for existing regulations, there's no reason to think that this will work differently. Make sure you are not the company that receives any fines or penalties.
Outside resources can be a big help. They keep your staff focused on all their existing priorities and quickly bring expertise to the table.