- The recently implemented TRID rules have changed the closing process significantly – for the better and, in some ways, for the worse.
- TRID’s biggest impact has been in timing, as the new receipt and review periods have resulted in significant delays for closings.
- Agents can educate their clients about the things they can do to help keep the new process running smoothly, especially during the hectic spring home-buying season.
While TRID officially stands for the TILA-RESPA Integrated Disclosure regulation, which combines and replaces the loan and closing documents required for home sales, some in the industry say the acronym really means “The Reason I Drink.”
Although it was designed to clarify the fees and terms associated with buying a home for the borrower and seller, TRID’s unintended consequences include substantial closing delays. The delays have been so significant that National Association of Realtors’ Chief Economist Lawrence Yun says it contributed to the 10.5 percent drop in November existing home sales.
Keeping open lines of communication between the homebuyer, seller and their representatives is critical to the home-buying process.
As lenders and other industry providers get acclimated to the new requirements, agents can help homebuyers smooth the process and avoid TRID delays during the busy spring homebuying season with the following hacks:
Urge homebuyers to act swiftly
Homebuyers usually saw the loan and closing disclosure forms for the first time at the closing table, but TRID now requires a three-day ‘receipt’ period that precedes a three-day ‘review’ period, resulting in a potential six-day delay to the closing.
If the homebuyer receives the forms on day one of the three-day receipt period, they should begin to review them right away, and either have extra time needed to review, or get to the closing table in less than six days.
Discuss any issues with the loan and closing disclosures immediately
If the borrower or the seller sees anything confusing or inaccurate during the review period, he or she should alert their agent or attorney immediately.
Waiting to raise a concern, or assuming it will be addressed at the closing table, can potentially cause further delays. It’s your job to ensure that everyone involved is on the same page and issues are addressed as soon as possible.
Don’t wait to address issues from the walk-through
Before TRID was enacted, walk-throughs were commonly held on the same day as the closing.
Even though the walk-through is now typically held a few days before the closing, agents should encourage buyers to have a keen eye and immediately raise any concerns.
Sometimes the issues that come up during a walk-through are small things like outlet plates or a leaky faucet, which won’t require a new three-day review period. But anything that affects the payment or interest rate will require new forms and a new review period, because it will impact the amount of the loan.
Ben Niernberg is the executive vice president of business development and operations at Northbrook, Illinois-based Proper Title, LLC, a full-service title insurance agency.
