In general, the initial net effect for most mortgage loan applicants is that it will delay bank closings by up to double the normal time. The three-page document lays out the terms of the mortgage, including the loan amount, interest rate and closing expenses. This document will give more detailed information regarding the terms of the loan and will be provided to the borrower three days prior to closing. The TILA-RESPA Integrated Disclosure rule, known as TRID, produces a shorter stack of paper before closing, but it also makes a nice set of shackles if you’re making changes before sealing the deal. The letter also notes that the mortgage industry has dedicated substantial resources to understand the requirements, adapt systems, and train affected personnel, and additional technical and other questions are likely to be identified once the new forms are used in practice after the effective date. Specifically, TRID applies to those who did not close on their loans, or who applied for a loan, on or after Saturday October 3, 2015.
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Clearly breaking out these figures should make it easier to compare loans from different lenders (yes, you should shop around) to find the best rate and terms. You are stuck with that for the rest of your life. “If any amounts have changed significantly, be sure to ask why”. This is a benefit for the borrower because it will give a buyer time to compare the final mortgage costs to what was in the initial loan estimate.
The White House says lenders have had enough time to get the rules right, and is threatening a veto fight if the legislation – that prevents lenders from being sanctioned until a February 2016 deadline – passes Congress. The rules have been in the works since late 2013.
If there are any changes because of circumstances out of the lenders’ control, such as because of a fix that is needed because of an inspection issue, a new three-day waiting period will be required before the closing can take place.
“There will be buyers and sellers that will be shocked they can’t make an adjustment to their contract three days before their settlement”, said Bob Davis, executive vice president at American Bankers Association.
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The negatives to the new disclosures and processes are minimal.
