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Today I'm here with Tom Ross from Nova Home Loans, and we are going to discuss a massive change in the lending world. It's called TRID, which stands for Truth in Lending RESPA Integrated Disclosure. TRID is designed to simplify the lending process for the consumer. How will the new TRID law affect you?
Right now when you close a loan, there are three essential pieces of paperwork: the good faith estimate, the truth in lending statement, and a settlement. The problem is that those three pieces don't seem to fit together. It is simply a counter-intuitive process that causes stress and confusion for the buyer.
The new TRID law essentially compiles those three pieces of paperwork together. Instead of the good faith estimate, you will get something called a loan estimate. It will look similar to the good faith estimate, but it will also have information that usually goes on the truth in lending statement. When you go to close, instead of getting a settlement, you will get a form called a closing disclosure. The closing disclosure looks exactly like the loan estimate. This way, your initial documents will look like your final documents, which creates less confusion.
Another change is that our consumers will now have a mandatory three day waiting period before they can sign their final loan documents. The waiting period eliminates rushing around to assemble all the papers you need in order to close the next day, which is phenomenal for our consumers.
Overall, the TRID law will probably add about 15 days to the escrow process, which is currently 30 days. The new 45 day escrow process is really aimed to protect the client, as it allows more time for things like inspections and assembling paperwork.
If you have any questions, you can contact Tom at 602-791-5861, or email him at Tom.Ross@NovahomeLoans.com. As always, if you have any questions about real estate, call us or send us an email. We'd love to hear from you!
