The details of mortgage paperwork can be confusing to many people looking to buy or refinance a home. The legal disclosures can be intimidating to the untrained eye. As part of the government's overhaul of our financial system, mortgage changes in the form of new rules and documents will be implemented on October 3rd that make borrowing costs and other information easier to understand and compare, so borrowers can make their best financing comparisons and decisions.
Under regulations and directives issued by the Dodd-Frank Act, the CFPB (Consumer Financial Protection Bureau) has combined several forms into just two, using clear language and design that will help reduce paperwork and consumer confusion. They will provide more info about the total monthly mortgage costs and other data that will help people decide on its affordability for their budget.
TRID (TILA RESPA Integrated Disclosure), also called “Know Before You Owe” combines overlapping information from previously separate (Reg Z) Truth in Lending and the (Reg X) Real Estate Settlement Procedures Act into one; a comprehensive overview that’s easier for home buyers to understand and question.
TRID also legally defines what constitutes an “application” from the lenders point of view, in order to determine when the lender must send out the regulatory disclosures required in response to a mortgage application
The guidelines also require the Loan Estimate to be given to borrowers three days after application and a Closing Disclosure to be delivered at least three days before the closing. Given complex lending rules, this is no small feet and every lender across the country has revamped their processes and workflows to accommodate the changes.
TRID will immediately change the mortgage lending landscape and it’s important that everyone buying or selling a home is aware. Previously, lenders had flexibility just before the closing to complete any last minute details or changes. Many buyer or sellers suddenly decide to close within a day or two notice and notify the bank to be ready. Neither will be allowed anymore, as everything must be completed a full week before the closing, in time to send the Closing Disclosure to the borrowers who then have 3 business days to review and confirm that the final mortgage offer was what they were promised and are prepared for.
These TRID changes are all part of the federal government correcting past deficiencies in the lending process and providing for a safer and more informed home buying experience. Contour Mortgage and our team of professionals are available to answer any questions and help you with all aspects of your home purchase, so call us today!
