Chuck Barberini Realtor – Contra Costa County Real Estate – Intero Walnut Creek
TRID takes effect today I have attended a couple of talks discussing how the new rules will impact the Real Estate industry. Some of the items of importance, as I see them, are that TRID requires the lenders to draw up a very accurate Loan Estimate, which is replacing the Good Faith Estimate, at the beginning of the disclosure process, similar to the current process. Loan docs cannot be signed within a 7 day period of the Loan Estimate receipt date. It also requires that the Closing Disclosure, a modified document taking the place of the HUD, requires 3 days of seasoning before the buyers are able to sign their loan docs. The Closing Disclosure must be within 10% of the Loan Estimate or the Loan Estimate has to be re-issued with another 7 day waiting period. This is the part that has everyone worried about the length of escrows. Another key component is that there are no fee adjustments permitted once the Closing Disclosure is sent. The burden will be on the borrower to get the lender all of their information early and completely, then for the lender to thoroughly create the Loan Estimate, including all potential fees. I have heard that some of the banks anticipate that TRID will add 14 days to the closing of an escrow, I believe that will be the exception rather than the rule. As one of the speakers stated he expects a learning curve as everyone implements the new procedures and gets comfortable with the process and there may be some hiccups along the way, but it should be business as usual within 6 months, we shall see.
One of the scary propositions is that the government oversight has built in severe penalties for lenders who don’t comply with the process, which could be why the banks are being overly cautious with their estimated closing times. I have attached a short article from the National Association of Realtors which states that early enforcement will be corrective and not punitive, which should help alleviate some of the stress and allow the lenders to perform and adjust as they go.
As a borrower, I suggest that you bring up your questions and concerns with your lender at the beginning of the process, because once the ball starts rolling it needs to roll on a straight line to the finish. One of the most important things to remember in this competitive Bay Area market is that all buyers are in the same boat, dealing with lenders and Escrow Officers who are now learning the process. Ask the questions and find out how comfortable and forthcoming your lender is with TRID.
OCTOBER 2, 2015
The new TILA-RESPA Integrated Disclosure (TRID) rules for mortgage closings took effect for new loan applications on October 3. The Director of the Consumer Financial Protection Bureau, on behalf of the six federal financial regulatory agencies, provided written assurances that the early enforcement of the new rules will take into account the good faith efforts of supervised entities. The letter coincides with Director Cordray’s testimony on September 29 before the House Financial Services Committee that early enforcement efforts would be corrective and not punitive for a period of several months.
This letter is the result of NAR’s joining with numerous industry partners to request this written assurance so that lending institutions can proceed with closings under the new rule in a timely manner.
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