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What TRID confusion has done to the market

TILA RESPA Integrated Documentation (TRID) rules changed this fall had have had a ripple effect, which we examine herein.

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Now pay attention because there may be a test later: On October 3rd, 2015, the two documents that were standard operating procedure for purchasing a home, the Good Faith Estimate (GFE) and the HUD-1/Truth-in-Lending document, were phased out to make way for the Loan Estimate, a document that must be delivered or placed in the mail no later than the third business day after receiving the consumer’s application, and the Closing Disclosure document that must be provided to the consumer at least three business days prior to consummation of the transaction.

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The joy of paperwork

Now, you wouldn’t think that phasing out two old forms for two new ones would be that big of a deal. If you already purchased a home you may or may not be familiar with the TILA RESPA Integrated Documentation (TRID) rules. In layman’s terms, TRID represents the somewhat meandering process the lender takes to approve the loan and the whole process used to take about 30 days.

Now, the TRID rules have changed and the process will take about 10 days longer. Outside of costing the potential homeowner more money (somewhere in the neighborhood of $100 to $300 dollars), the new TRID rules change seems to be more of an annoyance than anything else. Or is it?

TRID 101

According to economistoutlook.org, the new TRID rules have been in effect since October, but the closings that got impacted first are the ones that occurred in November 2015.

While lenders will generally be responsible for preparing and delivering the Loan Estimate and Closing Disclosure, the new TRID procedures and timelines, according to onetitle.com will have an impact on realtors, specifically the increased amount of time necessary to close a transaction. Obviously this is a pain-in-the-you-know-what. The realtor wants to close the deal and make his/her money. The buyer wants to close the deal so he/she can move into their new home.

Another thing onetitle.com points out about the TRID change is that it forces (encourages) buyers and sellers not to bury themselves in last minute details. “Real estate professionals should no longer expect to be able to make last-minute changes at the closing and professionals should prepare their clients not to demand last-minute changes.  In this new closing climate, the American Land Title Association (ALTA) is instructing real estate practitioners to work collaboratively to have all closing documents ready a full week before the closing date.”

There’s [Still] a White Picket Fence Out There

For the most part, the revamped TRID rules should be more or less cosmetic to the buyer. If anything it puts more heat on the realtor to facilitate a positive climate of collaboration between seller and buyer and the bank/lender.

On paper at least, purchasing a home is not supposed to be “that” complicated: you and your significant other look for and find the home of your dreams, you apply for a loan, the loan gets approved, the realtor facilitates the paperwork and you all live happily ever after. Ok, on second thought maybe the process is a bit more complicated than that.

Now you can add more paperwork into the mix. Just what the real estate industry needs.

#TRID

Written By

Nearly three decades living and working all over the world as a radio and television broadcast journalist in the United States Air Force, Staff Writer, Gary Picariello is now retired from the military and is focused on his writing career.

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