TRID, mandated as part of Dodd-Frank, went into effect on October 3, 2015. It is meant to be a help to consumers in understanding the costs, risks and key elements of their
VA Home Lenders
mortgage. TRID is in effect for all home purchase and home refinance transactions.
TRID stands for TILA-RESPA Integrated Disclosure. This rule was implemented to help improve and simplify mortgage forms for borrowers by condensing lender disclosures into two forms that will be the same for all lenders. The two forms are:
Loan Estimate – this form explains the terms, costs and risks of the mortgage. The LE is due to the borrower 3 business days after the application for a mortgage has been submitted. The lender cannot collect fees (except credit report fee) from the borrower before issuing the LE and receiving a borrower intent to proceed.
The LE is different that the Good Faith Estimate which was previously used. Estimated cash to close and escrows for taxes and insurance now appear on the LE. Projected payments for years 1 – 7 (including principal, interest and P&I – if applicable) appears on the LE. The principal, interest and other loan costs to be paid by the borrower for the first 5 years also appears on the LE.
Closing Disclosure – this form confirms the costs of the loan. The CD is due to the borrower 3 business days before the closing of the loan.
The lender prepares the final numbers for the CD which includes the seller side of the transaction. In the past, the title company or real estate attorney prepared these numbers. The CD states a summary of the payment, total costs, etc. and shows how much the payment will be with principal, interest and PMI for years 1 – 7 and then 8 – 30. There is a borrowers paid column and seller paid column for determining the costs of the transaction and who pays for each fee.
The CE has a summary of costs and cash to close comparisons with the initial LE which shows how much the numbers changed, if at all. By doing so, lenders are apt to be more accurate at the beginning of the mortgage process.
How TRID protects VA borrowers?
With the new timing and disclosure rules, TRID gives VA borrowers more information sooner both at the beginning of the application and before closing. This creates more communication between the borrower and the lender so that you, the borrower, will close on a mortgage that you are comfortable having for years to come.
VA loans are in existence to accommodate our active and retired veterans who are purchasing a home or refinancing. The TRID rule reinforces a lender’s commitment to serving these borrowers by providing accurate and detailed information about their mortgage both at the onset and closing of their mortgage. The Consumer Finance Protection Bureau provides detailed information about TRID for consumers.
My loan process was very easy and quick. Not to mention a great loan rate. I couldn't be happier!
Capt Sam T. - US Army
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