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It's because of changes coming to the TILA-RESPA Integrated Disclosure (TRID), and this will affect everyone involved in real estate, from consumers to Realtors to lenders. The Consumer Financial Protection Bureau (CFPB) issued a final rule amending regulations to the "The Truth in Lending Act" as well as "The Real Estate Settlement Procedures Act."
So, what does this mean for you? The TILA-RESPA rule consolidates four disclosures for closed and credit transactions secured by real property into two different forms.
One of these forms is a loan estimate that must be delivered or placed in the mail no later than the 3rd business day after receiving the consumer's application. A closing disclosure must be provided to the consumer at least three business days prior to consummation.
These new disclosures must be provided by a creditor or mortgage banker that receives an application from a consumer for a closed-end credit transaction. However, creditors will still be required to use the current Good Faith Estimate, HUD 1 and Truth in Lending forms for applications received prior to August 1, 2015. After that date, these forms will no longer be used.
The TILA-RESPA rule includes some new restrictions on certain activity prior to consumers receiving the loan estimate. These restrictions took effect on August 1, 2015 regardless of whether an application was received on that date. These restrictions include imposing fees on a consumer before the consumer has received the loan estimate, or requiring submission of documents verifying information related to the consumer's application before providing the loan estimate.
What does this mean to you and the entire closing process? Well, it's going to get longer. At a minimum, it will take 45 days to close. The other important thing to take away is to stay in close contact with your agent and your lender.
There's a lot of changes up ahead, and I'm sure you have some questions. Please feel free to give me a call or send me an email. I'd be happy to help you.
