The new TILA/RESPA Integrated Disclosure rule (TRID) is now effective with applications taken on/after October 3, 2015, and applies to all close-end credit transactions secured by real property. Lenders will still use the Good Faith Estimate (GFE), HUD-1, and Initial Truth-in-Lending (TIL) forms for all applications received prior to October 3, 2015. Listed below are the major changes that you should be aware of:
New Disclosures and Timing Requirements
Loan Estimate (LE)
- Combines the GFE and initial TIL
- The LE is intended to provide consumers with help understanding the key features, costs, and risks of the mortgage loan they are applying for.
- LE must be delivered or placed in the mail no later than 3 business days after the consumer submits a loan application.
- LE cannot be disclosed until fees are received from escrow.
- Appraisal cannot be ordered until the LE has been acknowledged and a wait period of 3 business days has passed.
- In regard to the LE, a business day is a day on which the creditor’s offices are open to the public for carrying out its business functions.
Closing Disclosure (CD)
- Combines the HUD-1 statement and the final TIL
- CD must be received by the consumer at least 3 business days before the consummation of the loan.
The CD provides information to the consumer in order to help them understand all costs involved in the mortgage loan transaction.
- In regard to the CD, a business day means all calendar days except Sundays, and the legal public holidays.
There are two camps of thought regarding the Closing Disclosure (CD). Here at Central Coast Lending, we work to issue the CD approximately one week in advance, making sure the APR is correct. Then, the borrower must way 3 days prior to executing the note.