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 TILA-RESPA (TRID) is here!    

 

 

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10/03/2015 - WHAT IS THE TILA-RESPA RULE?


The new rule is effective for all new applications taken on or after October 3, 2015.



The current disclosures used today will still be utilized for applications started prior to October 3rd including closing documents.



The Closing Disclosure (CD) must be delivered to you three business days prior to closing.



Lender credits and seller credits must be disclosed on the Loan Estimate.




On November 20, 2013, the Consumer Financial Protection Bureau (CFPB) issued its final rule to integrate the Real Estate Settlement Procedures Act (RESPA) and Truth In Lending Act (TILA) disclosures and regulations. The final rule integrates existing disclosures with new requirements from the Dodd-Frank Act to improve your understanding of the mortgage process, aid in comparison shopping, and help to prevent surprises at the closing table. The TILA-RESPA rule, also known as TRID (TILA-RESPA Integrated Disclosures) or “Know Before You Owe”, and all changes went into effect for applications taken on or after October 3, 2015.


WHAT CHANGES ARE HAPPENING?


NEW Loan Estimate


Say goodbye to the Good Faith Estimate (GFE), Truth in Lending (TIL), and a few other miscellaneous disclosures (at least for new applications as of October 3rd). TILA-RESPA has combined all of the necessary information into an easier to read 3-page disclosure called the Loan Estimate (LE). The Loan Estimate must be delivered to you within three business days after receiving a complete loan application.


NEW Closing Disclosure


The days of the HUD-1 Settlement Statement and Final Truth in Lending are now behind us. The new Closing Disclosure (CD) combines the information from both of these documents, along with a few other miscellaneous closing documents, to create a new 5 page document that is easily compared to the Loan Estimate when placed side by side.


The Closing Disclosure MUST be in your hands and acknowledged at least 3 days prior to closing. So, it is imperative that you return any requested information or documentation to us as quickly as possible throughout the process to avoid any closing delays.


LOAN APPLICATION – WHAT ARE THE INITIAL STEPS?


Once we have enough information to complete the loan application under TRID, we cannot require you to provide any borrower documents (paystubs, taxes, bank statements, etc.) until we deliver a Loan Estimate to you and you sign the Acknowledgement of Intent to Proceed. Once we receive that signed intent to proceed, goodmortgage.com will collect your application fee and appraisal fee, send the full initial disclosure package, order the appraisal, collect borrower documentation, and order title.


HOW WILL THE GOODSTART PRE-APPROVAL PROGRAM BE AFFECTED?


goodmortgage.com will continue to issue goodStart Pre-Approvals on purchases with addresses that are to be determined (TBD). If you need additional information on the goodStart program, please contact us.


WHAT DO WE NEED FROM YOU?


1. Utilize electronic signing (eSign) whenever it is available to you. If you choose to opt out of eSigning, it may make the process lengthier due to time requirements. For example, the Closing Disclosure would have to be mailed to you 6 days prior to closing instead of 3 days to allow for delivery under the mailbox rule.
2. Notify us as soon as possible if you are utilizing a Power of Attorney (POA) as there may be additional charges from the closing agent and re-disclosure may be required to provide you with the most accurate fees.
3. Submit any of the requested information or documentation as quickly as you can. You will receive a Loan Application Checklist with your full initial disclosure package. You may also get requests for additional documentation from your Loan Officer or Processor. The faster we are able to submit that documentation to underwriting, the faster we can get your loan closed. Don’t hesitate to reach out to us with any questions you may have regarding any of our requests. We want to make the process as smooth as possible for you.
4. Confirm receipt of your Closing Disclosure by signing it as quickly as possible in order to avoid any delays in closing since the Closing Disclosure must be confirmed as delivered at least three days prior to closing. Your processor will reach out to you and let you know when to expect this document for signature.
5. Sometimes, the terms of your loan may change for various reasons. If this happens, you will receive revised loan documents. Please make sure to sign and return these loan documents as soon as you are able.

ALL ABOUT THE CLOSING DISCLOSURE


Who prepares the CD?


goodmortgage.com will prepare your Closing Disclosure by working with the Closing Agent you choose to ensure all fees are as accurate as possible prior to delivering the document to you. If you are purchasing a property, the Closing Agent will provide the seller a copy of their Closing Disclosure.


What if something changes on the CD? Will there be an additional wait to close?


In some situations, an additional 3-day review will be required if something on the Closing Disclosure changes. These will not be common occurrences, but you will need to keep them in mind if you want to request any changes. A final copy of the Closing Disclosure will always be provided to you at closing with all other closing documents.


A new 3-day review WILL be required when:


1. Annual Percentage Rate increases over the allowed threshold (.125% for Fixed loans and .25% for ARMs)
2. Loan Product changes
3. Pre-Payment penalty is added

A new 3-day review will NOT be required when:


1. Typos are found at the closing table
2. Unexpected discoveries are made during a walk through of the home
3. Changes are made at closing including, but not limited to, commission, taxes, and amount paid in escrow

WHAT DOES ALL OF THIS MEAN FOR YOU?


1. There will be fewer documents for you to review than there was in files prior to October 3, 2015.
2. The new documents are much easier to understand and compare as the Loan Estimate and Closing Disclosure were made to look very similar.
3. Once the Closing Disclosure is delivered to you and signed by you, there is a required 3 day waiting period before the loan can actually close. This allows you more time to review your terms and address any questions before getting to the closing table.

For more information on the new TILA-RESPA rule and to view samples of the forms you will see, please visit
http://www.consumerfinance.gov/know-before-you-owe/

For more information on Understanding The Loan Estimate, please visit - .http://www.goodmortgage.com/Learn/Articles/Understanding_The_Loan_Estimate.pdf
 


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