An in-depth look at the TILA-RESPA Integrated Disclosures (TRID) rule, effective from October 2015, which combines the previous GFE, HUD-1, and TILA disclosures into two new forms: the Loan Estimate and the Closing Disclosure.
Loan Estimate (LE): Combines the Good Faith Estimate (GFE) and initial Truth-in-Lending (TIL) statement.
Closing Disclosure (CD): Combines the HUD-1 Settlement Statement and the final Truth-in-Lending (TIL) statement.
The Loan Estimate is provided to the borrower within three business days of applying for a mortgage. It details:
Loan terms
Projected payments
Costs at closing
The Closing Disclosure must be provided to the borrower at least three business days before closing. It includes:
Final loan terms
All closing costs
While TRID itself does not involve specific mathematical formulas, it streamlines complex financial information into straightforward figures.
Consumer Clarity: Simplifies previously complicated mortgage information.
Transparency: Enhances borrower understanding and protection.
Standardization: Promotes consistency in mortgage documentation.
TRID applies to most closed-end consumer mortgages. Exemptions include:
Home equity lines of credit (HELOCs)
Reverse mortgages
Mortgages secured by mobile homes not attached to real property
GFE: Good Faith Estimate
HUD-1: Housing and Urban Development-1 Settlement Statement
TIL: Truth-in-Lending statement