Affiliate forum explains new loan disclosure rules
“Are you ready for TRID” was the featured topic of a free seminar for brokers sponsored by the Affiliate Council of the Seattle King County REALTORS® recently. Speakers at the forum focused on the new disclosure rule going into effect October 3, 2015, that consolidates the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) requirements into an Integrated Disclosure – now known by the acronym TRID. The rule is intended to improve the way consumers receive information about mortgage loans, both when they apply and when they are getting ready to close.
REALTOR® President Tyler McKenzie thanked the Affiliates of the Seattle King County REALTORS® for organizing the event and noted that it demonstrates the partnership among real estate industry companies to work on behalf of consumers. “Were it not for the work of REALTORS® and our industry partners in encouraging Congress and the Consumer Financial Protection Bureau to delay implementation of the new rule until October, we would likely have seen many upset consumers and delayed transactions at the height of the summer market. “
The over 100 attendees at the forum heard the perspective of experts in lending, title and real estate forms. Dan Hanson, EVP of National Production for imortgage gave an overview of timelines and requirements of the rule for lenders working with buyers. He explained that buyers would now receive two documents, a loan estimate upon application, and a closing disclosure three days before closing. The rule requires that the buyers have three days to review the disclosure and does not allow this timeline to be waived.
Don Riley, President and CEO of CW Title and Escrow, emphasized the need for coordination between lenders, title, escrow and real estate brokers. He encouraged open communication among all parties and stressed that lenders will be subject to sizable fines by the CFPB if the rule isn’t followed.
Justin Haag, Corporate Counsel for the Northwest Multiple Listing Service talked about the new and changed MLS forms that incorporate the integrated disclosure timelines. It will be important for brokers to understand the new forms and use them correctly to the advantage of their clients in the transaction.
Some key takeaways from the forum for real estate brokers are:
- Always stay aware of your timelines in the transaction and communicate these to your clients. The new waiting periods required by TRID cannot be waived, so pay attention to the transaction timeline.
- Educate your buyers about the documents required by the lender to meet the disclosure requirements and keep the process moving.
- Explain to sellers the possibility of delayed closings due to the new rule.
- New MLS forms have been modified with the new rule in mind. The forms will help you and your clients be better informed about the progress of loan approval and required compliance with the rule.