Should Lenders Be Concerned about the TRID?

The new disclosure forms for consumers and realtor makes its debut on August 1, might requirement an extended adjustment period, but the general opinion from the CPFB is that one-to-four unit real estate transactions should be more straightforward than troublesome.

The Dodd-Frank law calls for replacing an outdated, confusing and redundant TIL and GFE, along with the HUD-1 with two new forms.  The mortgage broker or the lender can now complete the single new three-page Loan Estimate form of the "loan application."

So How Does This Change Impact Lenders, Realtors, or Consumers?

Lending and Financial definitions and conditions are thoroughly-detailed, and the organization of the new forms are grouped efficiently. There will now be less confusion over the terms called "application" and "business day" and deadline requirements are also clearly explained.

Cost details are grouped; loan terms are specified clearly and in language that is easy to understand. Other disclosures and comparisons make the information easy to find and easy to explain.

The long-term comparison, which is a new element, could require some adaptation on the part of lenders. Other disclosures, dealing with assumptions, refinancing, late fees and transfer of loan servicing, are to be specifically noted in black and white terms.

Due to the fact that tolerances are integrated (as they pertain to fee changes and adjustments) and more rigid, the new form is expected to be a lot trickier for lenders and loan originators compared to realtors and consumers. Zero tolerances

in most situations, combined with details about fees that are "able to be shop," are anticipated to give rise to more consistent and controllable procedures in the long run.

The Loan Estimate form changes are matched with modifications to the Closing Disclosure form. The new five-page document will require additional caution by the representing realtor to assure numbers and dates are precise.

The "Three-day prior" delivery indicates that timing is a much bigger factor than at any time in real estate.

With just a couple of months to be prepared for the differences the August 1st target date looks as somewhat of an "unknown" in the way of compliance. As a result the CPFB in a rush has slowed down their deadline date and pushed it back to Oct. 1, 2015