What is the TILA-RESPA Integrated Disclosure (TRID) Rule?
Overview: TILA-RESPA Integrated Disclosure (TRID) Rule
The TILA-RESPA Integrated Disclosure (TRID) Rule is a federal regulation issued by the Consumer Financial Protection Bureau (CFPB) that aims to simplify and clarify the information provided to consumers during the mortgage loan process. It integrates and replaces older disclosure forms required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).
Key Features of TRID:
- Combined Disclosures:
- Loan Estimate (LE): Replaces the Good Faith Estimate (GFE) and the initial Truth-in-Lending disclosure. Given within 3 business days of a loan application, it provides an early summary of key loan terms and estimated costs.
- Closing Disclosure (CD): Replaces the HUD-1 Settlement Statement and the final Truth-in-Lending disclosure. Must be provided at least 3 business days before closing, detailing final loan terms and closing costs.
- Applies to Most Closed-End Consumer Mortgage Loans:
- Includes home purchases, refinances, and loans for vacant land or construction.
- Excludes: Home equity lines of credit (HELOCs), reverse mortgages, and mortgages secured by mobile homes not attached to land.
- Timing Requirements:
- Loan Estimate: Within 3 business days after receiving a complete loan application.
- Closing Disclosure: At least 3 business days before loan consummation.
- Purpose:
- Make the loan process more transparent.
- Help consumers better understand the terms and costs of their loans.
- Reduce confusion and prevent surprises at closing.
- Effective Date:
- The TRID Rule took effect on October 3, 2015.
Why It Matters:
TRID was designed to improve consumer protection by presenting mortgage information in a more consistent, understandable format, enabling better comparison shopping and reducing the likelihood of predatory lending or last-minute surprises.
