The Consumer Financial Protection Bureau’s (CFPB) “Know Before You Owe” program has been in effect six weeks, with local and national industry experts pleased by results.
Based on the Truth-in-Lending Act and Real Estate Settlement Procedures Act, the program commonly known as TRID has seen positive response from lenders and Realtors nationwide.
Read the Alabama Center for Real Estate’s October report on TRID by clicking here.
“It’s been absolutely wonderful the way it’s gone into place,” said Kimberle Barton, Regional manager and Division Lending manager with Rock Mortgage.
Barton said since TRID has been in effect, Rock Mortgage’s average closing period has dropped from 17 days to 14 days.
Barton has long been a proponent of the initiative, arguing the program will reduce bureaucratic delays in homebuying. Under the old system, loan estimates could be changed without the lender’s or the homebuyer’s knowledge until the very end.
Under the new rules, certain estimates cannot be changed under any circumstance, and the lender and homebuyer are able to see qualifying changes well in advance of closing.
“In my opinion, they’re getting a lot better service and better rates because we’re not taking as long,” Barton said.
Quicken Loans Vice President Dan Chiesa told a 2015 Realtors Conference & Expo industry panel recently that his company had closed 3,800 loans since TRID began.
There have been issues with TRID since it went into effect, members of the industry panel admitted.
Some agents have found it difficult to get a copy of the Closing Disclosure due to lenders citing federal privacy rules, but the industry panel stressed that real estate agents can go directly to buyers to obtain copies.
CFPB has a new website to help agents, lenders and stakeholders understand “Know Before You Owe.” To access that site, click here.
Here’s things to know about TRID, courtesy of CoreLogic:
- The mortgage and loan application process should be more user-friendly for the consumer, as they will be dealing with a new version of disclosures, which include combining the Loan Estimate and Closing Disclosure components. This “in motion” account of costs will provide consumers with transparent data from the beginning of the loan process to the closing of the mortgage.
- Some estimates cannot be changed under any circumstance.
- Cumulative estimates may not change or increase by more than 10 percent.
- Some estimates are subject to changes across the board.
- The proximity to closing is key in determining what can be changed. The closing disclosure must be received by the borrower no later than three business days before closing and must be mailed to the consumer seven business days before closing.
- The loan estimate must be part of the package so the consumer may review to see if there are any changes.
- The creditor will be held responsible for errors in the package.
In the event of an error in APR, product or prepayment penalty addition, a three-day delay will be enforced.