Real Estate Analysis and Commentary.

Wikipedia:

The Consumer Financial Protection Bureau (CFPB) is an independent agency of the United States government responsible for consumer protection in the financial sector. Its jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors, other financial companies operating in the United States.  http://www.consumerfinance.gov/

ICBA Summary of the TILA-RESPA Integrated Disclosure (TRID) Rule:

TRID stands for:

• TILA (Truth In Lending Act)
• RESPA (Real Estate Settlement Procedures Act)
• Integrated
• Disclosure

What is the new TRID rule? ? The TRID rule consolidates four existing disclosures required under TILA and RESPA for closed-end credit transactions secured by real property, the appraisal notice required by the Equal Credit Opportunity Act, and the servicing notice required by RESPA into two forms: a Loan Estimate (LE) that must be delivered or placed in the mail no later than the third business day after receiving the consumer’s application, and a Closing Disclosure (CD) that must be provided to the consumer at least three business days prior to loan consummation. ? TRID also establishes a new definition of “application” for consumers to obtain an LE ? While this rule includes major changes to mortgage loan disclosures and delivery requirements, due to ICBA advocacy, no proposed changes requiring creditors to disclose an all-inclusive annual percentage rate (APR) were finalized.

Loans Covered By the Rule ? The TRID rule applies to most closed-end consumer credit transactions secured by real property, but does NOT apply to: o Home Equity Lines of Credit (HELOCs); o Reverse mortgages; or

o Chattel-dwelling loans, such as loans secured by a mobile home or by a dwelling not attached to real property. ? The TRID rule applies to all lenders making mortgage loans, including community banks, unless the lender extended credit to a consumer 25 or fewer times including mortgage loans, or made five or fewer mortgage loans in the previous calendar year or current calendar year. ? NOTE: Certain types of loans that are currently subject to TILA but not RESPA are subject to the TRID rule’s integrated disclosure requirements, including: o Construction-only loans; and o Loans secured by vacant land or by 25 or more acres.

Reference Materials I have reviewed:

https://www.youtube.com/watch?v=-mfQmU8x3zc - very good start to finish projection of what a typical sale calendar might look like.

http://www.housingwire.com/articles/35262-trid-day-one-real-estate-and-mortgage-finance-still-alive

http://www.biggerpockets.com/renewsblog/2015/07/15/trid-explainedclosing-disclosures/

https://www.youtube.com/watch?v=Z2Rs-zAhLb8  - 15 minutes in the video gets more in-depth of what to expect from the industry on the consumer end.

https://www.youtube.com/watch?v=BJJ0YNHRiTw - Very good for Realtors.

New TRID FAQs from Fannie Mae 10/21/2015

Lenders and other industry participants have made significant systems and operational changes to prepare for the TILA-RESPA Integrated Disclosure (TRID) rule disclosure requirements, and many questions remain about certain aspects of that implementation. New FAQs address lender questions as they relate to our Selling Guide.

My take aways:

1. The new closing disclosure form (CD) which takes place of the HUD-1 allows the buyers and sellers to keep there funds separate. No longer will the buyer see what the seller gets and vice versa which is a good idea.
2. No longer will you have a stack of papers at the closing which you never saw before and have 2 hours to sign all of them with everyone looking at you impatiently. You will have three days in advance to review all documents before attending the closing which is a good idea!
3. It is going to take significantly longer to close on a house. Realtors will have to change the way they do business. No longer should there be a 30 day contract date because if they are attempting to attract financing customers it will be virtually impossible. No last minute changes! This is HUGE. Realtors should get used to doing two last "walk thrus" so that everyone is on the same page 7-10 days before the CD is delivered to the customer.