TRID IS COMING!
How will it affect real estate transactions?
By Ken Steiner
Senior Loan Officer, Home Street Bank
TRID is almost here. TRID goes into effect for new transactions on October 3, 2015. What is it, and how will it affect real estate transactions?
TRID stands for Truth-in-Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure rules. It is a major change to the regulation of real estate disclosure forms and procedures.
The Good Faith Estimate (GFE) is being replaced with an improved form called the Loan Estimate (LE). The Loan Estimate requires the lender to commit to certain fees, and informs the buyer of the monthly payment and cash-to-close. The LE must be sent to the buyer within 3 days of making loan application and at least 7 days prior to closing.
A new form, the Closing Disclosure (CD) must be sent to the buyer 3 days prior to signing the closing documents. The CD replaces the HUD-1 closing statement for the buyer’s side of the transaction, and will be prepared by the lender, not the escrow company.
Once the CD is sent to the buyer, fees cannot be changed. If anything is changed, the lender must re-disclose and the 3 day waiting period starts over.
Escrow will prepare the CD for the seller, and it must be given to the seller before the buyer can sign.
Ken Steiner can be reached at 206-389-4405 (office) or 206-619-2605 (cell).