Since the 2008 crumbling of the housing market, there have been many new regulations, policies, guidelines and standards for mortgage lenders and borrowers. While all new policies are intended to create a better, more transparent process for the lender and borrower, they can, at the same time, change the process, making things frustrating for the uninformed.
The most recent of these major changes is the implementation of the Tila Respa Integrated Disclosure. ( Also known as TRID).
Here are some of the main takeaways to be aware of now that this new procedure has taken effect:
No matter where you shop for a mortgage, all fees and costs will be disclosed in a uniform way amongst all lenders. This will be provided on the Loan Estimate where the figures provided will be in whole dollar format, as to not give the appearance of “final numbers” being given because it is still an estimate at this point. This estimate is good for 10 days, and if the decision is made to the lender within those 10 days then the lender is required to stick to the fees disclosed, meaning they cannot be increased before or at the closing table.
In the past all final numbers were provided on the HUD-1 Settlement Statement. This is no more. Now all final numbers will be provided on the Closing Disclosure. Where in the past the HUD-1 looked very different and difficult at times to compare to the Good Faith Estimate, now the Closing Disclosure will purposefully look very similar to the Loan Estimate making for a very simple comparison. The new Closing Disclosure is where you will see the final numbers presented in actual dollars, with cents included. If there are any last-minute changes to the loan that would result in a change in APR, or if the borrower wishes to change the loan program, then the Closing Disclosure will have to be disclosed again at least three days before the new closing date. Basically, the main message of this is no more last-minute surprises.
With all of these new time-sensitive requirements, won’t this make the loan process more drawn out?
In theory, no, it should not make your loan process much longer. While Mortgage Lenders, Loan Officers, Realtors, Processors and Underwriters are no doubt still in the adjustment phase of getting used to the new regulations and forms (the past forms have been around for several years), you may experience some delays in the process. If this happens, be patient. It’s important to work with a lender who is knowledgeable about the changes and who can easily explain the new policies so there are no delays.
These new policies and procedures are meant for the benefit of the borrower and the lender. Ideally, this will encourage all parties to meet the required timelines and not just get it accomplished in the last few days. This is not about delaying the process, it’s about being prepared and proactive. With that being said, if the borrower makes some last-minute negotiations, then this could perhaps effect the timeline at least another three days due to the disclosing of updated fees.
While going through the loan process, recognize that everything taking place, while it may seem like overkill at times, is meant to try to prevent any last-minute heartache or frustration, and on a larger scale, prevent a major market meltdown like what happened in 2008 and 2009.
Purchasing or refinancing can be stressful events in a person’s life. TRID and the new disclosures are only meant to assist in the transparency of the lender so that everyone can be on the same page. It may be hard to see at first, but stick with it and see it out to the end. Your home will be waiting.
As a Mesa native, Ron grew up in the valley and then studied Business and Finance at Western International University. After climbing the corporate ladder with a local semi-conductor company and working as the National Sales Manager for over 10 years, he branched out to an industry familiar to the Duranti family for over 35 years… Real Estate. Ron found his niche in the Mortgage Business, and was welcomed into the Peoples Mortgage family in 2000 where his straightforward and honest approach with his clients and colleagues earned him the title of partner by 2003. He can be reached at 480.694.2552 or by email: RDuranti@peoplesmortgage.com
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