What is the TILA-RESPA Integrated Disclosure (TRID) regulation?
The whole point of this new mortgage rule is to make the process easier for consumers to understand. And to do that, new paperworks and disclosure rules have to take place. This may mean longer mortgage process and more costs.
This new rule on mortgage requires new forms and these forms state how much exactly the borrower must pay for in closing and how much the monthly payment will be over the course of the loan until the term finishes. Consumers should get the standardized forms at least three days before closing. Previously, borrowers are allowed to make changes on a loan without time elements, even during the closing.
According to Yahoo Homes, this is an outgrow to the Dodd-Frank Law passed 5 years ago. It is designed to protect consumers from lenders' complicated terms, penalties, and adjustments that are given without explaining everything to the consumers.
As this new rule take effect, banks would give consumers more time to review all the documents that are involved in their loan. They call this rule 'Know Before You Owe', which doesn't only rhyme but also makes sense.
What happens now is the use of two forms, one for the loan estimate, and one for the closing disclosure. This shall simplify the process for borrowers, but as of now, transitions may still be difficult for lenders who have to spend a lot to update their systems. With these rules being just 2 days old, VP of mortgage sales at Finance of America Mortgage, Matt Weaver says that he expects delays especially with bigger financial institutions and closing can reach 2 - 2.5 months. Costs will come up and the question that remains is if these costs will be passed on to consumers. But he also said that things will work itself out.
