The TILA-RESPA Integrated Disclosure (TRID) Rule will take effect on October 3, 2015. TRID will significantly change the way real estate transactions are processed and settled. To avoid delays and to ensure that each settlement goes as smoothly as possible, it is important for real estate agents to be informed of all of the changes TRID will introduce to the closing process.

New Documents
When TRID goes into effect, there will be two new disclosure forms: the Loan Estimate (LE) and the Closing Disclosure (CD). The LE will combine and replace the Good Faith Estimate and the Truth in Lending disclosure. The CD will combine and replace the HUD-1 and the final Truth in Lending disclosure.

The LE is a form that explains the loan’s features, terms, and risks. This form is due to the borrower within three days of their submitting a loan application. The CD provides the borrower with final details about the loan, including projected monthly payments, fees, and other costs. This is due to the borrower at least three days before closing.

New Timeline
The new disclosures will also instate new timelines for real estate transactions. The lender now has two new deadlines. They are required to provide the borrower with the LE at least three business days after loan application, and to provide the borrower with the CD at least three business days before loan consummation. Click here to view a timeline chart.

The latter deadline can, in some instances, delay closing. If the lender does not provide the borrower with the CD three days before closing, a scheduled closing may be delayed. Additionally, there are some cases in which a re-disclosure, or another three-day review period, will be necessary. If the lender provides the borrower with the CD, and the loan terms in the CD are significantly different from those detailed in the LE, a re-disclosure will be required. Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB) has specified the following three situations under which re-disclosure would be necessary:

  1. An APR increase of more than 1/8 of a percent for fixed-rate loans, or 1/4 of a percent for adjustable loans (A decrease in APR will not require re-disclosure if it is based on changes to the interest rate or other fees.)
  2. The addition of a prepayment penalty
  3. The loan product itself changes, (i.e., from fixed-rate to adjustable-rate)

Preparing Clients for these Changes
In order to avoid closing delays or confusion when TRID goes into effect, it is important to spend some time reviewing the new forms, so that you can answer any questions your client may have. Keep the new timelines in mind when drawing up contracts, coordinate closings carefully, and avoid any last-minute changes or negotiations. Encourage your clients to review the documents they receive carefully, and to communicate with the lender and ask questions. Finally, avoid making promises that cannot be kept. Initially when the new disclosure forms are implemented, loans and purchases may take longer to close. Make sure your clients are prepared for this possibility.

Knowing how Know Before You Owe, or TRID will change the mortgage industry will help you better serve your clients, and prevent delays in closing or other issues. The CFPB and the Mortgage Bankers Association have published resources for real estate professionals to educate themselves and their clients on TRID. These resources can provide further information and answer some of your questions about how these changes will affect you and your clients.

For more information about TRID, and how NFM Lending is preparing for TRID, click here.

LINTHICUM, MD, May 11, 2015 — LaTasha Rowe, General Counsel at NFM Lending, attended the MBA Legal Issues and Regulatory Compliance Conference in Chicago, IL, May 3-6, 2015. The conference was hosted by the Mortgage Bankers Association (MBA) and featured educational sessions on recent industry changes, such as the TILA-RESPA Integrated Disclosures (TRID).

Rowe attended the conference in order to prepare and educate the NFM Lending staff and their clients for the latest mortgage industry changes.

“I am very excited to attend this conference,” said Rowe. “The TILA-RESPA disclosure changes are the most significant our industry has experienced in decades. This is evident by the attendance in Chicago, which exceeds over 1,000 legal and compliance professionals. I look forward to implementing further changes at NFM Lending and utilizing the information from this critical event to do so.”

The Legal Issues and Regulatory Compliance Conference is “the preeminent gathering of industry leaders to consider it all, including best practices, organizational changes needed to assimilate to final rules and knowledge to educate staff,” according to the MBA website. In addition to sessions on TRID, the event will also features sessions on the Home Mortgage Disclosure Act (HMDA), Fair Lending, Ability to Repay, Secondary Market, Social Media, Ethics, and many other topics.

NFM Lending looks forward to continuing to prepare for the upcoming TRID changes and educating their team and their clients about this and other industry changes.

About NFM Lending

NFM Lending is a mortgage lending company currently licensed in 29 states across the United States. The company was founded in Baltimore, Maryland in 1998. They attribute their success in the mortgage industry to their steadfast commitment to their customers and their community. NFM Lending has firmly planted itself in the home loan marketplace as “America’s Common Sense Residential Mortgage Lender.”

For more information about NFM Lending, please contact:

NFM Lending
Toll Free: 1-888-233-0092
Twitter: @NFM_Lending

Click here for full press release.