TRID Guidelines: Facts for Home Sellers

TRID Facts for Home Sellers

Whether you’re in the middle of a real estate transaction, or your agent just placed a “for sale” sign in your yard, you’ve probably at least heard of the new TRID guidelines. They officially became effective on October 3rd, but what exactly does that mean for you, the seller?

The short answer is simple: time.

The TRID regulations, or TILA / RESPA Integrated Disclosure Rule, were designed as a tool for consumer protection. They call for all lenders to comply with new disclosure forms that they provide to home buyers. The forms must include a complete breakdown of fees and must also list who (the buyer, seller, or third party,) is responsible for the fee.

The disclosure forms must be presented first following a buyer’s approval, but more specifically, again at least three days before closing. In other words, a closing can’t occur until the second disclosure is presented and after a 72 hour waiting/review period.

That’s where the time factor comes into play. Concerns have risen that three-day waiting period could hold up multiple real estate transactions, particularly if you are selling your home as well as purchasing one. But there is good news: remember, these new regulations are for consumer protection.

For starters, the Consumer Financial Protection Bureau released a statement clearing up some of the time concerns. There had been some misconception that any change made to loan or disclosure restarted the three-day waiting period. But in fact, only three changes require a new three-day review:

  1. The annual percentage rate (APR) increases
  2. A prepayment penalty will be added
  3. The basic loan product changes

So when answering the question, “Will the new mortgage disclosures delay my closing?” the CFPB states: “The answer is NO for just about everybody.”

And there’s more good news, there’s a great chance that your Realtor, as well as your buyer’s agent, is ready for these regulations. According to a survey by the National Association of Realtors “More than 80% of respondents had taken some form of training on TRID,” even better, over 70% of Realtors rating their preparedness for these new guidelines at least average or better. The NAR also concluded that “[Realtors] are working with their industry partners and making changes to contracts to help smooth the transition.”

“It’s never been more important for a seller to work with a knowledgeable Realtor who can help ensure that the buyer writing an offer on their home is fully aware of the new loan requirements and is prepared to work with their lender in a timely manner,” noted Woods Bros agent Marcia Murray.

As complicated as they seem, the TRID guidelines are in place to actually make the home buying process easier, safer, and more straightforward for both buyers and sellers. With the help of an informed Realtor, you can rest easy and enjoy a smooth transaction.

TRID Guidelines: Facts for Home Buyers

TRID Facts for Home Buyers

Beginning October 3rd, a new set of government regulations became effective for all real estate transactions. At first glance, TRID, which stands for TILA / RESPA Integrated Disclosure Rule, seems overwhelmingly complicated. Here is a breakdown of a few fast facts that will help you understand how TRID affects you:

Why the change?

It may feel like a drag to jump through the newly designed hoops, but in fact the changes were implemented to protect you. TRID has even earned a slick nickname “Know Before You Owe.” In short, the changes mean that lenders can’t surprise you with their list of fees associated with your loan at closing. Instead, lenders are required to present an official document of fees at least three days prior to closing. This new protection means you won’t be tallying up what you owe with a pen in your hand as the clock ticks away at your closing. Instead, you have 72 hours to digest how your new mortgage–and its related fees–work.

New disclosures:

If this isn’t your first rodeo, and you’ve gone through the process of home buying before, you may remember the set of forms your lender presented to you; one after the initial loan approval, known as a Good Faith Estimate, and later, usually at closing, your breakdown of fees. Because of the TRID changes, you’ll now get that breakdown of fees sooner, and this new disclosure will look remarkably similar to what you already saw after your loan was approved. The only difference is this Closing Disclosure From will actually break down who is responsible for each fee; be it you, the seller, or a third party.

What’s the downside?

So it all sounds great, but what’s the catch? Because the new disclosures are time sensitive, and government regulated, if not presented properly by your loan officer the closing could be delayed. The good news is that loan officers face penalties and fees if that happens, which is an excellent motivation for your loan to be processed correctly the first time. If you’re unsure of where to turn, ask your real estate agent to recommend a loan officer; they will likely have many banks and loan officers that they trust, and in turn, you can trust too.

Is my Realtor affected? Your real estate agent will have to comply with any delays in closing, so more than ever they will want to work closely with you every step of the way: keeping lines of communications open and guiding you with answers to your questions. It’s also likely your agent has attended a TRID class or otherwise educated themselves, making them a great resource to you throughout the home buying process.

Kevin Burklund of Woods Bros Realty said, “With this huge change in federal regulations, buyers have to be attentive and responsive in order to close on time; it’s more important now than ever to have a Realtor involved to keep the transaction on track.”

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