In October, the Consumer Financial Protection Bureau implemented their new Know Before You Owe mortgage disclosure, also known as TRID. The mortgage initiative is meant to ensure that homebuyers understand their loan options, shop around for the best mortgage, and circumvent financial surprises in the closing process.
The agents’ role in the process
The newly released TRID means big changes for lenders, realtors, and consumers alike. While adjusting to these changes, lenders may struggle to complete closings on time. As real estate professionals we play the valuable role of middleman between lenders and consumers. Realtors® can even improve their own business by excelling in this role, as lender referrals are invaluable for widening their client network.
Motivating and informing
Procedural changes in the TRID mortgage closing disclosure will make it difficult for lenders to stay on top of their work in the upcoming months. By working with buyers and borrowers alike, Realtors® are uniquely capable of helping lenders stay on top of their paperwork. The most important thing Realtors® can do is inform and motivate both the borrower and the buyer.
Agents should council buyers about the new TRID paperwork and encourage them to make changes to their loan early in the closing process. Real estate professionals should also encourage borrowers to provide all documentation sooner.
Earlier walk-throughs and contracts
Realtors can personally contribute by doing pre-closing walk-through inspections earlier on, and providing the sales contract to lenders early in the process. Although Realtors® have primary control over when pre-closing walk through inspections and sales contracts get done, these two actions are not nearly as helpful to lenders as ensuring that buyers and borrowers communicate early on in the closing process.
Many consumers select their Realtor® based on a referral from their lender. If agents play their cards right, the recent TRID changes could actually improve their relationships with lenders, increase referrals, and improve business overall.
More work, but better work
Not only will Realtors® look professional when they can walk clients through the new expectations established by TRID, they will also foster healthy working relationships between all involved parties. Although the new rule changes will inevitably require more work from lenders, customers, and agents alike, Realtors® may be able to capitalize on the situation in the long run.