Nearly two years has passed since the Consumer Financial Protection Bureau (CFPB) began implementing the TILA-RESPA Integrated Disclosure Rule (TRID) back in November 2013, and much has happened since that time. The industry has voiced various questions and concerns to the bureau, and, in turn, the bureau has released a variety of statements and guidance.
Some questions have been answered and others are still hanging in the air. Yet, the moment of fruition is finally upon us.
On Saturday, October 3, the TRID officially went into effect.
What does this mean for the settlement industry?
At its very basic level, it means a change in the forms that are used during a real estate transaction. Gone are the old settlement forms. The new Loan Estimate and Closing Disclosure forms are now required in most residential real estate transactions. However, implementation of TRID includes more than just new forms. With TRID now in effect, there has been a change in how real estate settlements are conducted. Along with the forms comes new waiting periods, deadlines and expectations from lenders.
There is no question that it will take some time for everything to go back to normal – or rather, the “new normal.” After the bureau proposed the TRID, there were concerns among the industry and Congressional representatives that an understanding of how to comply with the regulation could only be made clear once the industry had an opportunity to use the forms in real-life situations. The bureau did not allow the industry to test the forms in real-life situations before the implementation date, but Director Richard Cordray did indicate that the CFPB would be lenient with those who attempt, in good faith, to apply to the regulation after its effect date.
However, with no time for a “trial and error” period, the industry may be in for a rough road ahead while all of the different sectors involved in a real estate transaction get into sync with the new requirements.
The CFPB does offer some guidance for those in the industry who have questions about the forms and what the new requirements entail. Among other things, the bureau offers a compliance guide, illustrated instructions on how to complete the new forms, a closing factsheet, a disclosure timeline and loan disclosure sample forms. The CFPB also published a series of webinars to help answer questions about TRID, and a question index is available for those who want to see what questions were answered during the webinars. In addition, the bureau offers a guide specifically geared toward real estate professionals that offers information on how to prepare for closings and specifies exactly what has changed now that TRID has taken effect.
Lastly, the CFPB has an email specifically for comments about the implementation of the new mortgage rules: CFPB_MortgageRulesImplementation@cfpb.gov.