Do you know about T.R.I.D.? Will it help or hinder? Who will benefit from it? Why do we have more regulations, aren't there enough already?
These are some of the many questions people are asking in the buzz about the new TRID laws going into effect on October 3rd.
Well, to better understand the new disclosure, let's start with some answers. . . . . .
What exactly is TRID?
Well, breaking it down into simple language, TRID is the TILA / RESPA Integrated Disclosure Rule, or more commonly, the "Know Before You Owe" disclosure. TILA is the Truth in Lending Act and RESPA is the Real Estate Settlement Procedures Act. The CFPB (Consumer Financial Protection Bureau) modified both rules in its TRID final ruling.
Whether you're a consumer, a real estate agent or a mortgage expert, insights into what this change will mean are different for all of us. It's effective date has been delayed for a second time. The following is the press release from the CFPB director:
WASHINGTON, D.C. — Today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray issued the following statement on the Know Before You Owe mortgage disclosure rule:
“The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until October 3, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”
- Original Source: CFPB
What does all of this mean?
Quite simply, TRID will affect all mortgage transactions from October 3rd on. The intent of this is to make the entire mortgage transaction more understandable with a simplified Good Faith Estimate and more clear and concise loan documents that explain the various options available to the consumer.