How TRID impacted the mortgage industry

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The mortgage industry is going through a lot of dramatic changes that affect the mortgage process.

The government has created stricter rules regarding documentation.  As a buyer, it is important that you are educated about these changes and know what to expect.  If you are not a first time buyer, this is going to be a different experience for you than it was during your previous mortgage process.  These changes became effective for all new loans across the mortgage industry on or after 10/3/2015. You may hear these changes being referred to as ‘TRID’.

One thing that has not changed is the pre-approval process.  It is still a very important first step that should take place first in your home search.  We can still offer mortgage approvals for ‘to be determined’ dates and locations.  Though once you find a home and are under contract these steps will have to be followed in the following order.

  1. Submit your application
    • To have an application the lender has to have received six pieces of information from the borrower.  The six pieces of information are name, income, social security number, loan amount, estimate of property value, property address.
  2. Give Your “Intent to Proceed”
    • Once the Lender has your application, the lender has 3 business days to send you a full set of government regulated loan disclosures which will include the Loan Estimate (LE), which is the primary disclosure.
    • As soon as you receive these disclosures, it is extremely important that you give your “Intent to Proceed” and send the signed disclosures back to your Lender right away.  Using e-signature can expedite this process drastically.  The lender needs the “Intent to Proceed” because only then can the following be done:
      • Collect Appraisal Fee
      • Order Appraisal
      • Order Title
      • Collect loan documents
  3. Submit Requested Documents
    • The LE will list all of the primary documentation needed for the loan application.   It is necessary for you to get all of the requested documentation to your lender right away.
    • If you do not turn in all requested items within 1 week of the application, there will definitely be delays in the process.
    • The lender is going to be moving your file through a series of steps to move along the process.  Your file cannot be moved forward if your documentation is not complete.
  4. Confirm Receipt of the Closing Disclosure

    • One of the biggest changes is the Closing Disclosure (CD) which is replacing the final Settlement Statement.  The Closing Disclosure (CD), has to be prepared three days before closing.  The Lender will prepare the CD and email it to you.  It is critical that you confirm that you have received it right away.
    • Once the lender gets confirmation you have received it, the closing can take place 3 business days after (Saturday counts as a business day).  There is no exception to the new 3 day rule.  This means that your loan must be approved with no conditions one week prior to closing.  This is why the lender needs everything as soon as possible.

Please do not hesitate to ask us any questions regarding TRID and the new process.  We are prepared and will continue to help prepare you!