The Road to the  New TILA-RESPA Integrated Disclosures (TRID)

Part 2 of 4
Question:  How does the timing work with the new discl osures?

Answer:  Timing will be critical.
  • Loan Estimate: Within three business days of receiving a loan application, the creditor or mortgage broker must provide the Borrower with the Loan Estimate.  This rule is applicable to applications received on or after October 3, 2015.
  • Closing Disclosure: The CFPB determined that borrowers would be better served by having sufficient time to review the new Closing Disclosure prior to signing their loan documents.  As a result, CFPB mandated that borrowers have three days after receipt of the Closing Disclosure to review the form and its contents.  It is critical to note that the three-day review period starts upon "receipt" of the form by the borrower.  If the form is hand delivered, that is deemed the day of receipt.  If the form is delivered by a means other than in person, the form is deemed received three days after the delivery process is started (i.e. mailing).  This results in a combined delivery period and review time period of six to seven business days from mailing to loan signing (aka Consummation).
Question:  What are the new Terminology and Definitions
 
Answer: 
 

"Creditor"

  • The term for Lender is now "Creditor"

"Consumer"

  • The term for Buyer/Borrower is now "Consumer"

"Business Days"

  • For purposes of providing the Loan Estimate, or any revised Loan Estimate, a "business day" is a day on which the creditor's offices are open to the public for carrying out substantially all of its business functions.
  • For all other purposes, "business day" means all calendar days except Sundays and legal public holidays specified in 5 U.S.C. 6103(a).

"Consummation"

  • Consummation occurs when the consumer becomes contractually obligated to the creditor on the loan (In California - the date loan documents are signed).  This varies according to applicable State Law.  Creditors must verify the applicable State laws to determine when consummation will occur, and assure delivery of the Closing Disclosure occurs at least three business days before this event. 

"Closing"

  • The CFPB interprets "closing" as the day the consumer signs loan documents. This is also the date of "consummation".   Currently, most of the real estate industry interprets "closing date" as the date the documents are recorded with the County Recorder.  Clearly these two dates are not the same and have very different meanings.  It is important to understand the different interpretations as we move into the new regulatory environment on October 3, 2015 because the Closing Disclosure must be delivered three business days prior to consummation.
Did you miss our first installment of TRID Talk with Elite Escrow?
Click HERE for Part 1
Resources

 

  • Click HERE for the Real Estate Professional's guid
  • Click HERE to compare disclosures, view sample forms and learn the new timelines on the CFPB's "Know Before You Owe" webpage.
  • Click HERE to view a calendar showing the timing of disclosures for a sample eal estate purchase transaction.
  • The CFPB released a TOOLKIT that guides consumers through the process of shopping for a mortgage and buying a house.  Additional Buyer/Borrower resources are also available HERE.
  • The National Association of Realtors offers RESOURCES to help REALTORS┬« prepare for the new disclosure requirements. 

Watch the July 16, 2015 webcast on the changes to the closing process,
with NAR Senior Counsel Finley Maxson


Look for future installments of TRID TALK with Elite Escrow.

Elite Escrow Services of San Diego is here to guide you through the challenges of the new regulations.  We are committed to working closely with you, keeping lines of communication open to ensure the transition into the new regulatory environment is seamless.

 

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The information contained herein is provided as an accommodation to the real estate industry and to our clients. It is not intended to be nor does it represent professional legal or financial advice. Elite Escrow makes no representation as to the legal sufficiency or financial consequences of information which is supplied on this website, and we strongly encourage participants in real estate transactions to seek advice from independent legal and financial counsel.