TRID: A New Mortgage Application
October 1st brought with it a major overhaul to the mortgage application process. For years, realtors and buyers have been working with an time consuming and complicated mortgage application process that left your head spinning. Now, we have TRID, the new mortgage application.
TRID aims to make mortgages more transparent and coherent for home buyers. However, the new rules are still complicated with little room for forgiveness, so we’ve put together a brief guide on how best to break down the new TRID regulations and what you need to know.
TRID Effective October 3rd
Any Loan Applications taken AFTER October 3rd will be subject to the new TRID system (Tila-Respa Integrated Disclosures). While this simplifies the mortgage process, it also means there are new forms to file and new deadlines to meet.
The main forms that you will be working with are the Loan Estimate and Closing Disclosure forms.
The new Closing Disclosure will replace the HUD-1, and the buyer will recieve it sooner than the HUD-1.
The New Loan Estimate
Buyers must engage the lender as soon as the property is identified. This ensures that the Loan Estimate may be issued back to the buyer ASAP. After filing for a Loan Estimate, the lender has 3 days to return a Loan Estimate. Included with the Loan estimate is an Intent to Proceed or (ITP).
Before appraisal can be ordered on the home, the borrower MUST return the Intent to Proceed to the Lender in order for an appraisal to be ordered.
Note: Filing an ITP does not obligate the borrower. It simply allows for an appraisal to be ordered.
Thee Day Waiting Period
The borrower MUST sit and wait on the Closing Disclosure for three days PRIOR to closing. On day one the borrower receives and acknowledges receipt of the Closing Disclosure. Remember, the three days excludes Sundays and some holidays.
Demand an SOC Certification from Title and Escrow
Most lenders will require the settlement service providers, Escrow and the Title, to be SOC 1 and SOC 2 Certified (SOC= Service Organizational Controls). I strongly urge you to demand the SOC Certification from title and escrow. Otherwise, the lender may refuse to wire the funds to escrow!
California Title and Pickford Escrow ARE SOC 1 and SOC 2 Certified.
SOC 1 is certification that the settlement service provider has policies and procedures in place to protect the parties NPPI (Non-Public Personal Information).
SOC 2 certifies that those policies and procedures have been tested and that all data, including secure electronic data systems, are in place and functioning.
While the new TRID regulations look like a mouthful of paper- work and complex timelines, they are in reality much simpler and transparent then the previous mortgage application process. If you have questions about how TRID is going to affect your home purchase, contact Matt Epstein for professional help.
Matt Epstein is a top real estate agent in Sherman Oaks and Studio City. With over 25 years experience as a local real estate agent, Matt knows the ins-and-outs of San Fernando Valley culture, housing and living. Follow his blog for weekly news, real estate insight and beautiful new listings. He consistently ranks in the Diamond Circle at Berkshire Hathaway. Matt is considered part of the the top 1% of realtors nationwide.