TRID And The Mortgage Process October 2015

TRID is a new Financial Services Disclosure that will go into effect on October 3, 2015.  It’s a pretty massive change, and TRID is going to change dramatically the way the mortgage process works.

The best way to describe the change is to say that a while back, you could go to the Airport, and just run up to the ticket counter, without having to take off your shoes, or your belt as you passed through metal detectors.  Now, we all show up at the Airport at least an hour early.

In the current mortgage process system, we get a mortgage approved… and pretty soon there after (sometimes hours) then we close.  That’s not happening after the beginning of October.

With TRID, there will be a 3 day “waiting period,” before you can close a mortgage loan.  

There are tons of OTHER changes too.  The biggest problem right now is that the CFPB (who made up these new mortgage rules) will not allow us to “practice” how it’s going to work.

MANY Mortgage companies, however, are going to a 60 day processing period, simply because of the anticipation that mortgage loans will not close on time.  Our company is not.  In fact, we are starting to provide folks with a customized closing calendar, that says, “If you do your part by each of the dates shown here… we will get you closed in 30 days!”

We believe this entire period, between mid-September through the end of the year could be very confusing for First Time Home Buyers who don’t know any other “way” to close a mortgage loan.  We think first time home buyers are going to hear, and see that there are delays, and not know why there’s all of this grumbling about TRID!

TRID Frequently Asked Questions

Q: Can the seller side of a Closing Disclosure change without delaying closing?

A: Both sides can change and depending on when the change occurs, it could delay the closing. The Closing Disclosure is prepared by us, as the lender, not the Attorney.  So if there is a change, and the edit can’t be done by the Attorney simultaneously, which is what currently happens. The change needs to come to the closing coordinator at the mortgage company, the change approved, and then it will be sent back to the Attorney.

Many Lenders are going to take responsibility for the HUD-1, however some will not.  This dramatic change in the way we CLOSE Mortgage Loans, is likely going to cause a disturbing number of delays.  Like everyone else in the Country, we are still working out logistics – and we won’t really know the repercussions of these TRID rules until we simply do them.

Q: My Realtor is encouraging their buyer to shop for the best rate and program after the contract is written. Won’t this slow down the process so that I cannot close in 30 days?

A: Yes it will. We realize that Realtors feel they must take this step.  But you should shop for your Lender PRIOR to writing a contract to buy a house. Otherwise, the contract needs to be written for a longer time period than 30 days.

Q: How will back to back Mortgage closings be different with TRID?

A: Instead of requesting a HUD1 from the sale of the home, we will require the Closing Disclosure from the sale of the home. This is a new form.

Since this must be given to the borrower 3 days prior to closing, it will be easier to get this sooner in the mortgage process and not at closing anymore! If the mortgage underwriter requires proof earlier in the process, then just get the purchase contract showing they are in contract for the sale of their home.

Q: A realtor I met with said that they had met with another mortgage company about TRID. This company was going to require that every buyer utilize one of three of their approved Attorneys. The buyer, nor seller would have any say in the matter. They said they are doing this because of TRID. Is this legal?

A: This is an extreme move to make in an attempt to mitigate risk by the mortgage company, and certainly gives us the upper edge with the Realtor over that mortgage company!

At this time, we have asked all 1000 Attorney and title companies, that we have done business with in the past year to get set up and approved by us. That means that a buyer can choose their Attorney and they are most likely already approved by us. We will also be happy to add more.

But yes – there will be an Attorney approval process.

Q:  You can’t get Home Owner’s insurance until the Home Owner Insurance Agent knows square footage of the property. The Lender doesn’t typically have that information until the appraisal comes in.  

A: We should have the appraisal prior to the Home Owners Insurance needing to be finalized. It just makes it more important for us to make sure we get that appraisal reviewed as soon as we receive it and out to the customer! Our company is making it a priority to make sure our Appraisal Review Underwriter looks at appraisals the day received – certainly no later than the following day.

Q: Are the realtor license numbers required on the closing disclosure?  This will be a change in behavior to get all of info completed on the purchase contract. 

A: YES. The Realtor’s individual license number and the company license number are required on the Closing Disclosure. We will most likely set up a procedure to look this up ourselves when it is not provided. The problem will be if the contract does not have enough information for us to even look it up. It will be best to discuss with the Realtor upfront so they know we need it.

Q: With the Title Insurance Owners Policy…..for some reason I thought this was required by the Bank Servicer’s…or is it only the lender’s policy required to protect us?

A: Owners policy is not required by us for any reason. This policy is set up to protect the new owner of the property only. We require the Lender’s policy. Bank Servicer’s don’t care either way.

Q: The Closing Disclosure (called a CD)  is now required by TRID  3 days before closing.  The Lender must have evidence that it’s been received by all parties.  Can the Closing Disclosure be emailed to the customer, one email…printed by the customer, “wet signed” by customer and wife (for instance) and then sent back?  Would that suffice for proof received if they’re all wet sign?

A: Yes, wet signatures would suffice if both signed and it was sent to only one email.

Again, we are going to continue to provide information on the specific items that are causing mortgage process delays.  I spoke with Movement Mortgage and Wells Fargo in Raleigh this week.  Folks from both companies said that they are soon going to ask Loan Officers to only lock loans for 60 days, not the current 30 days.

We believe that if everyone follows the mortgage process calendar we provide them – we will be able to close in 30 days… BUT, it’s going to require that everyone is paying attention – and follows the guidance we give you about how to document your mortgage loan.

Remember that this really is kind of like the security precautions at the airport… these rules are being put in place to catch the bad guys.

Some folks are not going to miss a beat with these new TRID rules – but many people are going to be surprised by mortgage processing times and their delays.  My point for First Time Home Buyers is… be prepared for us to ask you for more stuff.  Make a folder, start putting things in there for us – and it will be just fine!

Have more questions about TRID and the Mortgage Process changes in 2015 – or what you can expect during the mortgage process?  Call Steve and Eleanor Thorne 919 649 5058 – and connect with us on Twitter, Facebook or Insta – we’re here for questions!  We want to help you buy your next house in North Carolina!