As a seller, the last thing you want is anything holding up the closing on your home, particularly if you are selling your home as well as purchasing one. Any delays on one real estate transaction could cause a snowball effect, delaying multiple transactions. So it makes sense that you could be having concerns about the recent TRID Guideline changes that officially became effective on October 3rd. The TRID Guidelines are aimed at protecting loan borrowers, who also happen to be your buyer. So do they really have an effect on you?
Your concerns as a seller are best summed up in one question,”Will the new mortgage disclosures delay my closing?” Luckily, the Consumer Financial Protection Bureau has already answered that question for you, and with the optimism of a Magic Eight ball, the outlook looks good.
The CFPB states “The answer is NO for just about everybody.”
That’s great, but let’s back up for just a second. What exactly is TRID? TRID stands for TILA / RESPA Integrated Disclosure Rule. More lovingly, it’s referred to as “Know Before You Owe.” Simply put, it was implemented as a protection for borrowers. It requires lenders to present two separate disclosure forms, one after the approval of a loan, and the second before closing.
When it comes to these documents, timing is everything. 72 hours of timing to be exact. Because the second document, called the Closing Disclosure From, must be presented to the borrower at least three days before closing. This gives the borrower ample time to review and ask any questions. The Closing Disclosure Form also clearly lists all of the fees associated with loan as well as who is responsible for them, (the buyer, a third party, or you, the seller.)
But with such a specific time table, why shouldn’t you be concerned about closing delays? The reason is simple. Contrary to recent hype surrounding the TRID updates, not every change to a loan document requires the three-day waiting period to start over. In fact, there are only three changes that would start the clock over. According to the CFPB they are:
- The APR increases
- A prepayment penalty will be added
- The basic loan product changes
The CFPB also reassures that surprises, like unexpected findings during a walk-through (i.e. a broken appliance,) most changes to payments made at closing, or typos found at the closing table, do NOT require an additional three-day review.
If you’re still uneasy, there’s even more good news from the National Association of Realtors. According to their survey “more than 80% of [Realtors] had taken some form of training on TRID,” and with over 70% of Realtors rating their preparedness for these new guidelines at least average or better.”
HOME Real Estate and its local and state boards have offered training on the new regulations. HOME agent Mitzi Garthright said, “In preparation for TRID I have taken advantage of every possible training opportunity available to me; I am prepared to guide my clients through the ever-changing world of buying and selling real estate.”
Mary Stull, a HOME agent, agrees. “As an agent, I attended an in-depth training regarding these changes. I feel it is essential as an agent to be up-to-speed on the new regulations in order to properly inform and advise my buyers.”
In other words, you can rest easy, the NAR survey concluded with this positive statement: “[Realtors] are working with their industry partners and making changes to contracts to help smooth the transition.”