Getting Up to Speed with New TRID Procedures
If you are looking to purchase real estate in the upcoming time period, you’ll be faced with one extra challenge at this time of year, as new requirements for closing procedures went into place in early October, and many professionals in the business are still catching up with everything that has changed. Here are some fast facts that you need to know about the new system, called ‘TRID’, which overhauls and changes the new loan closing procedures for real estate property.
Does TRID mean, anyway? The most important changes under the new policy, which became effective on October 3rd, are that many of the required loan documents have now been clarified and consolidated, and the timing of much of the transaction timing has also been updated. A long and convoluted acronym, the term stands for several of acts it updates or replaces:
Truth in Lending Act
Real Estate Settlement Procedures Act
Who does it affect? The new policy will have a significant impact on potential real estate buyers, title companies and mortgage lenders, as well as escrow offices, sellers and realtors. This is essentially everyone in the business, so it’s important to make sure that everyone you’re dealing with is sufficiently up to speed on the new requirements they face under TRID. To be secure in your own understanding, as well as making sure you’re getting the right support along the way, it is important to work with a real estate lawyer who knows the ins and outs of all TRID requirements in a way that will protect your prospects of a loan.
What does it change? In the past, an inefficient system would require a pre-approval offer on their loan that was not necessary valid. Under the new TRID procedures, the buyer will bring their application directly to a loan officer, including information on the loan amount, value of the property, address, and their own personal name, social security number and annual income. Within just three days, the borrower should then receive a new estimate for their loan.
What is the impact? The new systems should make consumers more empowered to understand their mortgage choices, as well as simplify the process for both the buyers and sellers in the purchase of a property. While there may be some additional waiting involved, it will absolutely have a great impact on the penalties that were regularly collected and wasted in the past. Previously, over $72 billion in penalties were assessed because of poorly done foreclosures and mortgages. The new TRID procedures should seriously cut back on this wastefulness and benefit all in the process.
What should you do now? If you’re looking into buying a home in the near future, you should know that many title companies and mortgage lenders are having difficulties adjusting to the new requirements. Before you commit to any loan or even begin the process, you should absolutely have an attorney present to work with you through your real estate transactions to make sure they are done properly and legally with the greatest benefit to you. For a team you can trust, call us at Zapicchi & Liller today for a free phone consultation at 609-291-9500.