Landmark legislation that overhauled the documentation that mortgage consumers receive throughout the finance process and at the closing table was implemented on October 3, 2015.
The TILA-RESPA Integrated Disclosure (TRID) rules were designed by the Consumer Financial Protection Bureau (CFPB) to make the mortgage process easier for consumers.
The last significant change to this documentation occurred in 2010, as real estate and mortgage industries were swimming in the wake of the real estate and economic meltdown that had started several years prior. Since then, the CFPB, as directed by Congress, has further revised mortgage-related documentation.
Homeowners who previously financed homes will likely notice the difference with TRID. Those who are doing it for the first time will hopefully find the documentation clear and easy to understand.
When you apply for a mortgage or shortly thereafter, you will now receive what is called the Loan Estimate, which replaces two previous documents. This will clearly list all costs -be it fees or other expenses-for you.
Another part of this implementation that has changed the process will take place at closing. Prior to this new set of regulations, closing documents were able to be prepared and finalized literally minutes before closing. Now all finalized documents need to be prepared at least three business days before closing. Whether it is a home purchase or a refinance, the borrower now has adequate time to review all the details with whomever they need to, be it their mortgage professional, attorney, etc.
This is likely a relief for many borrowers, who may have found this last stretch of the process stressful and confusing, and who may have felt there wasn’t sufficient time to read and understand the documents they were signing.
Now that they have the time to consider, the expectation is that the closing process will proceed more smoothly than it did in the past.