UPBEAT TIMES, INC. • November 2015 • 29 New Rules!
SANTA ROSA, CA. ~ Fall is here but Indian summer keeps hanging on and the pending rain seems ever so elu- sive.
With the
World Series in full payoff mode and no Giants, I guess we would call this Football season. But then again it is an odd year.
TRID came
into full swing on October 3rd and every real es- tate transaction will be effected with the new rules. TRID is an acronym inside an acronym.
It
is like a Escher of acronyms all wrapped into one. TRID stands for Truth in Lending (TIL), Real Estate Settlement Procedures Act (RESPA), Integrated, Dis- closures. The TRID rules were to begin in August of 2015 but we were given a reprieve by the CFPB to give everyone more time to adapt to the new forms and time requirements.
The Consumer Financial Pro- tection Bureau (CFPB) was es- tablished as a response to the fi nancial crisis of 2008 and subsequently passed into law in 2010. It was not until 2014 that the “fi nal rules” took ef- fect.
These rules are referred
to as Qualifi ed Mortgage (QM). In order for a lender to be in a “safe harbor” they have to ad-
here to these guidelines. “Safe harbor” 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 get- ting submerged in a sea of debt! No one can guarantee your home is safe from losing value putting you under- water with your
mort- gage. They
have reduced the chances by making sensible loans and making sure the borrow- er can demonstrate their ability to repay. Lending is a full doc world; if you can’t show the in- come, we can’t use it.
TRID is just another step the CFPB are implementing to pro- tect consumers from bad loans. TRID is designed to make the loan process easier and less stressful for the borrower, how- ever, the change has made it more stressful for lenders, Title Companies and realtors! TRID will replace the old
Good Faith Estimate (GFE) and Truth in Lending (TIL) with the new “Loan Estimate”. The HUD-1 and Final TIL will be re- placed with the “Closing Disclo- sure”. The Loan Estimate must be delivered to the borrower within three days after the loan
Per- centage” (TIP). The old TIL
(Truth in Lending), stated the total interest 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 Government.
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 docs.
application has been received. The Closing Disclosure must be received by the borrower three days before they can sign their loan docs. The new Loan Estimate will
have all the important informa- tion located on the fi rst page; such as lenders information, in- terest rate, and loan terms. There is a new term on this dis- closure; “Total Interest
by Barry O'Meara •
barryo@stearns.com occupied properties.
JOKES & Humor # 9 This re-
ceipt of Closing Disclosures will mean every transaction needs to be clear for docs to close at least 10 days prior to when you need it to close. For a purchase, if any terms of the loan or sales price change, it could trigger a re-dis- closure.
This could delay the signing and closing of your escrow. It is im- portant to make sure all details of the purchase have
been resolved and communi- cated to the lender, so as to avoid any last minute delays. These new rules have everyone
worried, but in a few months it will be normal business practice. For those
experienced home The Truth in
buyers this may seem strange. But for the fi rst time home buyer, this will be how it is done. Buying a home is stressful. Adding timelines adds more stress but in the end owning a home is worth it!
A four-year-old boy was eating an apple in the back seat of the car, when he asked, “Daddy, why is my apple turning brown?”
“Because,” his dad explained, “after you ate the skin off, the meat of the apple came into contact with the air, which caused it to oxidize, thus changing the molecular structure and turning it into a different color.”
There was a long silence. Then the son asked softly, “Daddy, are you talking to me?”
They
do not count Sundays or Holi- days. This makes closing a loan more of a challenge. A purchase has a contractual close of escrow date and a refi nance has statutory three days of rescission on owner
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UPBEAT TIMES, INC. • November 2015 • 29
The Mortgage Coach
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