Bear with us, we have to dive deep into “government-ese!”
After the 2008 financial meltdown, Congress established the Consumer Financial Protection Bureau (CFPB) to “help consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules and by empowering consumers to take more control over their economic lives.”
The CFPB jumped right in and created new rules for the home buying process under the title TRID,” the TILA / RESPA Integrated Disclosure Rule. Only in the government would take an acronym out of acronyms. Basically, it combined the Truth-in-Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) into a single rule effective October 3, 2015.
TRID includes changes to the timing and content of initial and final loan disclosures provided to the consumer, and seriously affected the closing process.
There are two key changes to be aware of if you’re in the process of (or considering) buying a home:
- New forms: The CFPB developed new forms that every lender is required to use during the home loan application process. The new forms were to be easier to understand.
- 3-day waiting period for closing: At one point, you didn’t receive your final costs and down payment information until the last minute. Now the final Closing Disclosure must be provided to the homebuyer at least three days before closing.
The Bottom Line for Homebuyers – Why You SHOULD care!
- Prepare far in advance and be timely and responsive throughout the closing process
- The TRID changes mean that any delays in providing paperwork or complying with your lender’s requests could delay closing and put you at risk for losing your earnest money, or even the home
- Shop and select your lender before you write a contract
- Sign and return all lender documents ASAP!
- Stay actively involved in the homebuyer process by being responsive and timely with all lender requests