October TRID Rules Affect Real Estate Agents and Buyers
The new Truth-in-Lending RESPA Integrated Disclosure (TRID) Rule was officially put into effect on Oct. 3, 2015. The new rules affect real estate transactions in which loan applications are completed on or after Oct. 3. Transactions in which loan applications were completed before Oct. 3 will still be subject to the old forms (GFE, TILA forms, HUD-1). New TRID rules apply to loans where properties are predominantly for personal, family, or household purposes, but could be applied to other types of properties, depending on the purpose of the loan.
TRID rules affect loan process for buyers. Under TRID, lenders have a set window of time to notify the buyer of the loan estimate, which summarizes the loan, including costs, for buyers. Buyers are required to inform lenders of all known expenses, so that the loan estimate can be adjusted accordingly. When the buyer only makes a loan application and does not notify the lender that they wish to move forward in the loan process, lenders are prohibited from asking buyers for necessary documentation. Lenders are also unable to start charging buyers processing fees, until buyers notify the lender of their intent to proceed.
The new Closing Disclosure will change the closing process for buyers, as well. A buyer that is using a lender must receive the Closing Disclosure document, prepared by the lender, at least three business days before the scheduled consummation of the transaction. Under TRID, after the Closing Disclosure has already been issued, any necessary changes to the Closing Disclosure will result in a prepayment penalty. Once the changes have been made to the document, a second three-day period must pass before the buyer is obligated to the loan.
The new TRID rules have caused revision of Florida Realtors sale and purchase contracts. As a result of these changes, buyers should be notified that the loan process may be longer, and that requested changes or underwriting decisions made late in the transaction could change the closing.
For transactions where TRID applies, real estate agents are advised to build more time in the contract for buyers to obtain loans and allow for longer periods of time to close transactions. Real estate agents should also consider communicating with closing agents as early in the process as possible about costs, expenses, and credits, as well as any contract amendments.
Infinity Abstract & Title is compliant with all CFPB and ALTA-S standards, including TRID. As an attorney-owned title company, we have the right tools and systems to close real estate transactions successfully and securely, with the support you need. Infinity Abstract & Title is proud to serve clients throughout Florida with a wide range of real estate expertise, contact us today at 813-931-0840 or visit infinityabstracttitle.com for more information! Read More.