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By Jeffrey T. Baker
The new Integrated Disclosure rule, or TRID, as the industry refers to it, will change the process of borrowing to buy a home and thus will directly impact how Illinois brokers get from contract to closing. Here are six things to know about the new rules.
1. Implementation date now set for Oct. 3
Originally scheduled for Aug. 1, the implementation date is now Oct. 3. New rules will apply to all residential real estate transactions that go under contract on or after the implementation date.
2. New ‘Loan Estimate’ form replaces initial truth-in-lending and Good Faith Estimate forms
The Loan Estimate is intended to provide as accurate an estimation of the true costs of the financing and the costs required to close for buyers. Each estimate must fall within a prescribed tolerance or a refund to the consumer, from the lender, may be necessary.
3. Loan Estimate form must be delivered to consumer within three business days of their application for a loan
Consumer makes an application when they submit their name, social security number, income, address of property to be purchased, estimated value of that property and the amount of loan requested to the lender.
4. Pre-Approval and Pre-Qualification letters are still allowed
Lenders will likely take steps to prevent consumers from disclosing information that would count as an application in order to provide the letters.
5. New ‘Closing Disclosure’ form replaces final truth-in-lending disclosure and HUD-1 form
Closing Disclosure must be received by consumer no later than three business days prior to loan consummation (which will likely be the closing date in most Illinois cases).
6. New rules could cause delay in closings
A change in the loan’s APR, the addition of a pre-payment penalty to the loan, or a change of the loan product itself will require a new Closing Disclosure and re-set of the three business days. All other changes will necessitate a revised Closing Disclosure but no re-set of the three business days. At a minimum, consumers are permitted to take one day to review revised Closing Disclosures.
