OK – TRID IS HERE AND GUESS WHAT? THE SUN ROSE THIS MORNING!
How to use TRID to help you buy a home
Now what?
First, what IS TRID? It stands for Truth-in-Lending RESPA Integrated Disclosures
What does is do? It provides two key features:
1) a newly designed, easy to understand pair of multi-page disclosures … called the “Loan Estimated” and the “Closing Disclosure” which replace the traditional HUD-1 (settlement statement), Good Faith Estimate, and Truth-in-Lending Disclosures.
2) provides the consumer with guaranteed time-frames in which to shop service providers AND have their fees guaranteed (within certain tolerances).
How does it work? Using the maximum time allowed, once a Buyer is under contract they have 10-days to shop for their Lender by formally applying for a loan. Each Lender then has up to 3-days to send a “Loan Estimate” thereby totaling 13-days which could be CONSUMED by shopping. At the conclusion of the loan process the Lender must submit a “Closing Disclosure” to the Buyers with final figures at least 3-days prior to when a Buyer can sign loan documents. Assuming no additional delays, this process CAN add up to a total of 16-days NOT INCLUDING SUNDAYS!!!
The question which has been posed to me by Buyer/Consumer & Realtor alike is “HOW THE HECK DO WE CLOSE A PURCHASE IN THE TRADITIONAL 30-DAY TIME-FRAME?” The answer below is EASY!
1. PLAN TO SHOP FOR LENDERS BEFORE SHOPPING FOR YOUR HOME. Select your finalists (if you end up with more than 1)
2. ELECT TO VOLUNTARILY PROVIDE YOUR SELECTED LENDERS WITH ALL FINANCIAL DOCUMENTS UP-FRONT. While Federal law prevents a Lender from REQUIRING documentation prior to issuing the up-front “Loan Estimate”, doing so will not only strengthen your Offer but will make the loan process proceed faster.
3. ACKNOWLEDGE RECEIPT OF ALL DISCLOSURES IMMEDIATELY. Remember that all of the “clocks” in TRID begin once the Borrower acknowledges receipt.
4. PICK A SOLID RECORDING DATE AND STICK WITH IT. With the new requirement for a 3-day waiting period prior-to-signing final loan documents after receipt of the “Closing Disclosure” has been acknowledged, any last minute changes moving up the recordation date could be problematic.
5. MAKE SURE YOUR LENDER HAS ALL ADDENDUM’S CONTAINING PRICE CHANGES AND/OR SELLER CONCESSIONS. Doing so will expedite issuing the final “Closing Disclosure” and eliminate the need for subsequent versions (which will reset the 3-day clock).
Thanks Todd Abelson for the guest post and the great information.
Remember – solid teamwork with your Knowledgeable Mortgage Professional will result is smooth closings and happy people. WE PROMISE!!
Todd Abelson, VP/Licensed Mortgage Professional NMLS # 180858
(520) 331-LEND (5363) “Mortgage Solutions…Made Simple!”
Sunstreet Mortgage, LLC NMLS # 286400 AZ Bk # 0907366
For more information check out the Consumer Financial Protection Bureau’s website
