WHAT IS TRID? WHAT IS TILA-RESPA? WHY IS IT CHANGING? HOW DOES THIS AFFECT YOU?

Written by:  Kelly Provost – The Pro’s Real Estate Team – 508-232-7926
The ABC’s and XYZ’s of real estate lingo can get really confusing, even for us Real Estate Folk. So you have been hearing about changes with the TRID, and you have no idea what is going on here. Let’s try to make this a little more simple to understand. First; what are all these acronyms about?
WHAT IS TRID & TILA-RESPA?
TRID =T ILA / R ESPA I ntegrated D isclosure Rule
TILA = Truth in Lending Act
RESPA= Real Estate Settlement Procedures Act
Ok so now that we know what they are talking about, let’s talk about the changes.
If you do not know what TILA and RESPA are you can click here http://www.consumerfinance.gov/regulatory-implementation/tila-respa/ to learn about the creation of these Acts and how they protect you as a consumer?
As for the new changes: We are all in for a big change in our industry. The changes with this act will change the standards on which lenders practice and in which Real Estate agents guide you through the process. Now this change will only affect the regulations on the lenders but it still means big changes for all of us.
The Changes were set to happen on August 1, 2015 but will not take effect until October 1, 2015.
Here comes another acronym for you CFPB = Consumer Financial Protection Bureau created by the Dodd-Frank Act issued this new regulation that is bringing on the changes. Two new forms are being created, with these forms comes a 3 day requirement for delivery and review by the consumer.
One form is the Loan Estimate. This form replaces what you may know as the Good Faith Estimate. This form will be required to be sent out to borrower within 3 days of application
Second form is the Closing Disclosure. This form will replace what is currently the HUD statement.  This form is required to be sent out to borrower 3 days before closing can occur. (or as the CFPB is calling it now = Consummation… **Snicker snicker**)
The Gist of it for you as the Seller and the Buyer:
The good news: Buyers: you now have 3 days with the closing disclosure to review the financials and discuss any issues before being swept away to the closing table with 600 pages of legal jargon filled documentation that you know you should read ahead of time but know you wouldn’t understand half of it.  Isn’t that why you hired an attorney anyway!? At least now you will get a better understanding on the financial side 3 days ahead of time.
The bad news: Sellers, agents, and buyers, understand that we can more than likely kiss away the phrase “A 30 day close”, we will no longer be able to seamlessly integrate a sellers sale with their new purchase on the same day, we will all need to learn new ways to conduct business so that we do not have families living in the streets while they await the 3 day grace period this new regulation creates. Real estate attorneys are working diligently to understand this new regulation and create procedures that will benefit all in regards to moving logistics. The bottom line is it will no longer be as it was and we will all just have to suck up the changes.
Don’t forget: these changes are for your benefit, after all.
Our industry as a whole is getting ready and making a plan to help you transition into this new real estate market we have found ourselves in. There is one truth, the real estate market is ever shifting and evolving. Is your Real estate professional ready?
Are they educating themselves and you, the consumer, on the ever evolving marketing?
If not, Just Call the Pros! We are always staying educated and ahead of the curve with industry changes, the most modern technology, and advances that keep your home in front of people and homes you’re looking for in front of you. We are always looking out for the best interest of our clients and pride ourselves in doing what is right even when no one is looking. Sadly, not every one can say that- so we have bureaus, like the CFPB, who need to look out for you, create regulations that will protect you and your best interests. We thank them for their diligence even if does mean we have a lot more work to do now.
If you have more questions about this change click here to read more details about the TRID