New mortgage disclosure rules or TRID (TILA-RESPA Integrated Disclosures), scheduled to take effect on August 1, 2015, will now be implemented two months later on October 1st!
The delay in the implementation of TRID, designed to replace Truth-in-Lending and the Real Estate Settlement Procedures, was mandated because the CFPB (Consumer Financial Protection Bureau) missed a filing deadline with Congress.
This two-month extension comes as a great relief to many lenders who likely would have been woefully unprepared for the earlier 8/1/2015 deadline.
‘As of two months before the deadline, nearly 80% of banks were still awaiting technology upgrades from their vendors, according to the American Bankers Association. Even if the upgrades are made quickly, banks still need time to test and learn the new systems, says Bob Davis, an executive vice president at the ABA…
…But while the change streamlines the process for borrowers, it adds more work for lenders by requiring them to electronically gather all fee data from various parties — title agents, appraisal companies and real estate agents — and prepare disclosures well in advance of a loan closing.
Currently, some of that information is given to the borrower on the same day the loan closes. But to meet the new regulations, some lenders are planning on mailing the disclosures 10 days beforehand to ensure the borrower receives them three days before closing…‘ (Source)
So what will the new disclosures look like?
From the CFPB (Consumer Financial Protection Bureau) we are providing sample Loan Estimate and Closing Disclosure documents based on the following loan…
‘This is a sample of a completed Loan Estimate for a fixed rate loan. This loan is for the purchase of property at a sale price of $180,000 and has a loan amount of $162,000, a 30-year loan term, a fixed interest rate of 3.875 percent, and a prepayment penalty equal to 2.00 percent of the outstanding principal balance of the loan for the first two years after consummation of the transaction. The consumer has elected to lock the interest rate. The creditor requires an escrow account and that the consumer pay for private mortgage insurance.‘
The Loan Estimate
The Closing Disclosure
Article author Michael Haltman is the President of Hallmark Abstract Service in New York.
HAS is a provider of title insurance in New York State for residential and commercial real estate transactions.
For anyone either buying or refinancing a property your attorney will likely recommend a title insurance provider, although you always have the right to choose your own (click here to learn more)!
If you have any questions you can reach Michael by email at email@example.com.