TRID: Not so Scary
As real estate transactions under new TRID guidelines are beginning to be completed, real estate professionals will want to know how they are working. Tom McLister, of George Mason Mortgage, LLC, was kind enough to answer a few questions about his experience with one of the first TRID real estate transactions in Frederick County:
Q. Were there any challenges getting the numbers from the lender to the settlement company, as this process has virtually been reversed from how it’s been done in the past?
A. The Title Companies as well as the lenders understand the time frames. We’re working diligently to ensure that the fees are gathered more upfront, rather than last minute. Everyone was onboard and knew their roles with this first settlement, so there were no challenges.
Q. Were there any challenges with complying with the disclosure period?
A. There may be challenges, however, if the correct expectations are set up front with the customers and real estate agents, things should go smoothly. (primarily: Time is of the Essence) The biggest challenge is working with processing and underwriting to make sure the file is given to the closer with enough time for them and the title company to do what they need to do.
In one case, the new Closing Disclosure was sent to the borrower electronically to sign and acknowledge receipt. However, one of the borrowers put in an incorrect password, which cancelled out the electronic version. We then had to have Wet signatures from the borrower, face-to-face. The borrower understood completely and we got it taken care of, because we had the time to get it done.
Q. How did the communication between the lender and title company go?
A. The communication was great; they are working together and helping one another get through the new process. It seems that everyone is on board and knows efficiency is everything going forward. Good communication will play a key role.
Q. Do you have any advice for real estate agents to assure a smooth settlement under the new TRID rules? (as smooth as possible)
A. The main advice would be to keep in mind that time is of the essence.
- Gather pest inspections, well and septic inspections, etc. earlier in the process.
- Make sure that the admin fees are listed in the contract to avoid being missed at the time of Closing Disclosure preparation.
- In order for the Realtor to get a copy of the new CD showing their commisions, etc., they will now have to go through the title company to receive a copy. The buyer’s CD will get sent to the buyer from the lender, but it doesn’t have the seller’s information, or the Realtor’s commission.
About TRID Three Day Reviews:
There has been a lot of misinformation regarding the 3-day review. No other changes accept the following will require a new 3-day review:
- The APR (annual percentage rate) increases by more than 1/8 of a percent for fixed-rate loans or 1/4 of a percent for adjustable loans. A decrease in APR will not require a new 3-day review if it is based on changes to interest rate or other fees.
- A prepayment penalty is added, making it expensive to refinance or sell.
- The basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest-only payments.
Source: George Mason Mortgage, LLC