CFPB Delays TRID Effective Date to Oct. 1

Judi-Wright-realtor-blog

The Consumer Financial Protection Bureau (CFPB) announced last week that it would provide mortgage lenders and borrowers with additional time to prepare for the highly anticipated TILA-RESPA Integrated Disclosure (TRID) rule by delaying the law’s effective date from August 1 to October 1, 2015.

Realtor Judi Wright feels it is critical to relay to homebuyers such helpful, updated information on this recent development. The delay will give mortgage providers an additional 60 days with which to plan for the TRID rule that was designed to consolidate mortgage disclosures forms currently required by the Truth-in-Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) into only two forms.

The Loan Estimate, which replaces the current Good Faith Estimate, and the Closing Disclosure which replaces the long-standing Settlement Statement form, will both enable homebuyers to better digest information and understand the process of purchasing a home.

According to a CFPB spokesperson, the decision to move back the effective date was in response to an administrative error that would have delayed the original August 1 effective date by two weeks. The spokesperson added that the delay was also in the best interests of many consumers and mortgage providers whose “families will be busy (in early August) with the transition to the new school year.”

According to the spokesperson, the additional time provided by the delay to Oct. 1 would help many mortgage providers to be more prepared to help borrowers become better acclimated with the new Loan Estimate, which is due to consumers three business days after they apply for a loan, and the Closing Disclosure, due to borrowers three business days before closing.

Both new forms are regarded as easier-to-use mortgage disclosures that clearly state the mortgage’s terms and help borrowers to perceive their options, choose the deal that’s best for them, and avoid any surprises at loan closing.

Both the Loan Estimate, which offers a summary of the key loan terms and estimated loan and closing costs, and the Closing Disclosure that provides a detailed accounting of the transaction, are designed to work in tandem with each other.

The Loan Estimate forms were tested in a quantitative validation study that resulted in participants providing more correct answers about a sample mortgage than they did using the forms they are replacing.

Realtor Judi Wright is pleased to deliver to you this recent development in the event that you are planning to buy a home in the near-future.  Please be sure to Email Judi at judiwright@ebby.com or call her at (214) 597-2985 if you are in the market for a new home, or are looking to sell your current property.

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