For more than 30 years, Federal law has required lenders to provide two different disclosure forms to consumers applying for a mortgage. The law also has generally required two different forms at or shortly before closing on the loan. Two different Federal agencies developed these forms separately, under two Federal statutes: the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA). The information on these forms is overlapping and the language is inconsistent. Not surprisingly, consumers often found the forms confusing. Therefore, the Consumer Financial Protection Bureau has enforced TRID (TILA-RESPA Integrated Disclosure Rule). It took effect this past weekend.
Here are some key points regarding the new rules:
- Expect 45 days to close minimum for a while.
- Back closings will need to be carefully coordinated.
- Buyers need to meet with their lenders in person or accept disclosures electronically.
- Buyers need to provide any documents for loan processing asap. Pre-approval in person is the best option.
- AVOID last minute changes or negotiations
- Shop attorneys: We have heard of $900 fees for processing purchases.
- Appraisal costs may also increase.
- Communicate with your lender and closing attorney frequently through the process