18 • UPBEAT TIMES • July 2015
Summer GUIDE #2 Do you know TRID?
you should be aware of up- coming changes to real estate transactions regarding disclo- sures and timing. Beginning in August of
2015, there will be a new for- mat for loan disclosures and time-lines everyone will have to adhere to.
TRID is the SANTA ROSA, CA. ~ The
daylight lingers well into the evening and summer is in full swing. This is the prime time for selling or purchasing a home. The weather is great and homes show their best. Whether you are a first time
homebuyer, move-up buyer, or seasoned investor, now is the time to take action. As you prepare for this new venture
new acronym that strings to- gether old disclosures into an integrated format intended to make lending easier to under- stand. TRID stands for TILA/ RESPA Integrated Disclosure. This rolls the Truth
in Lending Act (TILA) and the Real Estate Settlement Proce- dures Act (RESPA) into easier to read disclosures.
financial markets stable. The Consumer Financial Protection Bureau (CFPB) was established as a response to the financial crisis of 2008 and subsequently passed into law in 2010. It was not until 2014 that the “final rules” took ef- fect. These rules are referred to as Qualified Mortgage (QM). In order for a lender to be in a “safe harbor” they have to adhere to these guide-
by Barry O'Meara •
barryo@stearns.com
Closing Disclosure. The Loan Estimate must be delivered to the borrower within three days after the loan application has been received.
The Closing
Disclosure must be received by the borrower three days be- fore they can sign their loan docs. The new Loan Es-
docs. What is really challeng- ing for this requirement will be on a purchase; you have a contractual obligation to close in a timely manner.
If any
terms of the loan or sales price change, this could delay the signing and closing of your es- crow. It is important to make sure all details of the purchase have been resolved and com- municated to the lender so as to avoid any last minute delays. The use of the term
timate will have all the lines. “Safe harbor” This is just
another piece of the Consumer Financial Protection Bureau; all meant to keep us safe from financial mishaps and keep our
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only refers to protecting the lender from being sued if the homeowner should default on their home mortgage.
It is
not a safe harbor from homes getting submerged in a sea of debt! No one can guarantee your home is safe from losing value putting you underwater with your mortgage.
They
have reduced the chances by making sensible loans. TRID is designed to make the loan process easier and less stressful for the bor- rower.
TRID will replace
the old Good Faith Estimate (GFE) and Truth in Lending (TIL) with the new Loan Es- timate. The HUD-1 and Final TIL will be replaced with the
important information lo- cated on the first page; such as lenders information, interest rate, and loan terms. There is a new term on this disclosure; “Total Interest Percentage” (TIP). The old TIL (Truth in Lending), stated the total inter- est paid in dollars over the life of the loan. The new TIP will give you the amount you paid in interest as a percentage to the amount you borrowed. Somehow this does not seem simpler, but this was created by the Govern- ment.
The Truth in Lending is pretty simple; you borrow money and you pay it back with interest. If you don’t pay it back you lose your house. The Closing Disclosure (CD) must be received by the borrower three business days before they can sign their loan
“business day” excludes Sun- day and any legal holidays. In the case of a refinance, the borrower needs to review the Closing Disclosure before they sign their loan docs, and once they have signed they still need to wait three days before their loans can close.
Where this will be a problem is trying to stay within the rate lock.
As summer comes into full swing, lending continues with a new look and added time constraints.
and disclosures do not go into effect till after August 1st 2015.
This will be based on appli- cation date. So any loans with an application dated prior to August 1st will still be under the old disclosures and waiting times.
Rest assured lending, title, and realtors will adapt and ad- just to these new changes.
What good is the warmth of summer, without the cold of
winter to give
it sweetness. John Steinbeck
No one can whistle a symphony. It takes a whole orchestra to play it. ~H.E. Luccock These new rules
The Mortgage Coach
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