Loan Closing Considerations to Make under Recent Law Changes
By Stephanie E. Kaiser,
Attorney-at-Law, Puls + Haney
Parker County affords its residents a unique opportunity
to live and engage in a rural lifestyle while still having
access to big city resources. Land sales are on the rise
and, as some are learning, financing such purchases can
be met with delays. Some delays may be attributable
to appraisals and closing schedules; others are attributable to TRID, which is a new law that went into effect on
October 3, 2015.
What is TRID?
Congress enacted the Dodd-Frank Wall Street Reform
and Consumer Protection Act (Dodd-Frank Act), which
was signed into law on July 21, 2010. The Dodd-Frank
Act established the Consumer Financial Protection Bureau
(CFPB), which issued a number of mortgage-related regulations. TRID represents one of those regulatory changes
and stands for TILA-RESPA Integrated Disclosures; TILA
refers to the Truth-in-Lending Act, and RESPA refers to the
Real Estate Settlement Procedures Act.
Generally speaking, TRID applies to certain mortgage
loans whose primary purpose is consumer. A lender
may be able to rely on how the loan proceeds will be
used to determine whether the primary loan purpose is
consumer (e.g., if 100% of the loan proceeds will be used
to purchase an individual’s primary residence, and if the
residence is worth more than the land, then the primary
purpose of the loan is likely going to be consumer).
Sometimes, additional information is needed to determine
the primary purpose of a loan.
One of the best ways to avoid delays in closing a
TRID loan is to communicate with the lender regarding
the terms and conditions on which the loan can be made.
Through such communications, the lender may be able to
determine whether the loan is subject to TRID and, if so,
begin making the disclosures necessary to get the closing
timeline started.
Concluding Thoughts
The Dodd-Frank Act is thousands of pages long, and
the regulations issued by CFPB are extensive. This article,
therefore, highlights just some of issues to consider when
financing the purchase of your home in Parker County
and the timeline for closing that loan.
Stephanie E. Kaiser frequently trains and advises lending institutions and others on the Dodd-Frank Act and the
regulations issued by CFPB, including TRID. For additional information on Puls Haney Kaiser, PLLC, you may visit
www.pulshaney.com.
PA R K E R C O U N T Y T O D AY
The applicant must be provided with a Closing
Disclosure at least three business days prior to consummation of the transaction. The Closing Disclosure replaces the HUD-1 Settlement Statement and final Truth-in-
What can be done to avoid closing delays?
Mailing the Loan Estimate and the Closing Disclosure
adds three days to the timeline absent evidence of earlier
receipt, and the waiting periods associated with the
disclosures may only be waived in a “bona fide personal
financial emergency,” which is narrowly defined. As a
result, the timeline for closing a TRID loan is generally
unmovable.
MAY 2016
How can TRID affect my loan and closing?
When TRID applies to a loan, a Loan Estimate must
be delivered to the applicant within three business days
of receiving the application and at least seven business days prior to consummation of the transaction. The
Loan Estimate replaces the Good Faith Estimate and the
initial Truth-in-Lending disclosure and is often provided
before all of the information necessary to make a sound
credit decision is received. Under TRID, the lender
cannot require the applicant to provide verifying information related to the application before issuing the Loan
Estimate. The Loan Estimate, therefore, must be based on
the best information available at the time of the disclosure and be made in good faith. If certain information
changes, then a revised Loan Estimate may be required.
If a revised Loan Estimate is required, then it must be
provided at least four business days prior to consummation of the transaction.
Lending disclosures and allows the applicant to compare
the actual costs to the estimated costs prior to closing.
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