How TRID’s 3-Day Closing Rule Will Change the Title Process

What happens to the title process with the new TRID? In October, one of the largest changes to real estate, lending, and closing will go into effect. The TILA-RESPA Integrated Disclosure Rule (TRID) will change the title process and timeline. It’s being touted as an “industry changer,” but what exactly is changing and what can you expect?

The Good News About TRID

First, buyers can expect a lot of good to come out of the new implementation. Forms are clearer to understand, which means they’re less prone to error and provide greater insight into the numbers behind the transaction.

Buyers will have more time to review the loan and closing documents. The financials will become a lot more transparent. Errors and misunderstandings were the impetus for these sweeping changes and the forms seem to correct this.

Changes to the Title Process

The forms aren’t the only changes being made. As mentioned above buyers will have more time to review the loan and closing documents. The new Closing Disclosure form must be presented to the buyer three days before closing and any changes made start the clock over again, with another three days for sign-off.

This is a game changer because in the past last-minute changes to loan and closing documents were not uncommon. The buyer was often told those numbers were estimates. Even the name of the form denoted that — Good Faith Estimate. This allowed for leeway on behalf of the lender and the title company, but it also left the buyer a bit in the dark about exact numbers. These new provisions change that.

Accuracy and completeness are critical in these new forms, as changes can cause delays in closing now that buyers have three days to review the documents each time a change is issued. Before TRID, mortgage brokers often switched lenders, now they will need to start the paperwork from scratch if they do that.

Most closing officers are not used to having paperwork finalized three days before closing so this changes the way they conduct business. Loans will be non-adjustable and changes to documentation will be akin to delays.

Everyone on the home-buying team (realtors, lenders, buyers, closers, etc.) will need to understand the ramifications of changes and corrections. An attention to detail and dedication to complete accuracy will be critical to an on-time closing.

It’s also important to note that closing dates may be pushed out longer initially until the industry can make the necessary adjustments to deal with the changes to deliverables and their timelines.

What Happens in the Meantime?

The Consumer Financial Protection Bureau delayed the implementation of this new process from August to October 3rd, but many industry experts are still concerned about the timeline because there’s no soft roll-out. Mortgage professionals and closing agents cannot use the new forms until the October 3rd date.

Are you concerned about accuracy and what TRID will mean for your closing and title process? Select a company that’s been following the changes from the first announcement and implemented a workflow that ensures timely closings. Call Bay National Title Company for a consultation today. We can help by putting your needs first.