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TRID: The Acronym Of Acronyms

Legislation

So what is TRID anyway? It went into effect October 1, 2015, and by now most of you have heard of it but perhaps there is still some confusion about what it is and why it came to be. We’ll try to fill in some blanks below.

TRID is an acronym for the mortgage form acronyms TILA and RESPA and is a result of the new closing disclosure rules that came out of Dodd-Frank. It’s an attempt to merge the two forms to eliminate, or at least mitigate, some of the confusion that arose from the implementation of both in the closing process. The specifics of the acronym are broken down below:

  • TILA (Truth In Lending Act)
  • RESPA (Real Estate Settlement Procedures Act)
  • Integrated
  • Disclosure

A nice post explaining all of this is here –

According to Wikipedia, the Truth In Lending Act (TILA) “…promotes the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed.”

And the Real Estate Settlement Procedures Act (RESPA) “…requires that lenders provide greater amounts of information to prospective borrowers at certain points in the loan settlement process.”

The biggest change in the closing process will be in the new timelines.

But the biggest change, the one that can affect you as a buyer or seller, is the new timeline. Lenders are now required to give the buyer these documents at certain times throughout the process, and if they do not, the closing must be pushed back.

For more, here are a couple of other resources to review, one from the law firm Morrison and Foerster and the other a webinar presented by the National Association of Realtors senior counsel Finley Maxson.

What do you know about TRID? How has the first week of implementation gone? Share your thoughts below.

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