As I stated last Friday in my blog "New TILA-RESPA Integrated Disclosure Time Requirement", we are less than a week from when the new TILA-RESPA Closing Disclosure time requirement goes into effect. Even though we have had more than ample time to prepare for this change, there still seems to be a lot of confusion. Besides confusion over the Closing Disclosure time requirements, there also seems to be a lot of confusion over What Can Trigger a New Closing Disclosure and New Waiting Period?
There are only three things which will automatically trigger a new Closing Disclosure waiting period, and they are:
- If the APR Increases by more than .125%
- If there is a loan product change (new loan program).
- If a pre-payment penalty is added to the loan.
Anything other than the three things above will not trigger a new Closing Disclosure waiting period, and the loan can Close as scheduled, as long as all corrections are made on time. This means there is no need to be worried about unexpected changes, unless they fall into the three categories above. In fact at the present time it is really only two things, because right now I cannot think of a loan program which presently has a pre-payment penalty.
So unexpected discoveries on a walk-through, even if they require seller credits to the buyer will not trigger a new Closing Disclosure waiting period. Nor most changes made to payments or closing costs at closing , including:
- Taxes
- Meter readings
- Oil
- Escrow changes
- Typos, and
- Loan Amount changes which do not effect the APR by .125% or more
This does not mean we can all relax and think everything will go as normal, but what it does mean is if everyone works as a team, disruptions can be kept to a minimum. If we are all prepared for these changes by:
- Educating everyone as much as possible.
- Making sure all loan conditions are completed quickly
- Everyone communicates with each other
- Walkthroughs are done earlier if possible
- Eliminating last minute negotiations
- Submitting ALL addendums before the loan is approved
- Setting realistic Closing Dates!!!
If everyone does this, then the majority of the fears about the new TILA-RESPA Integrated Disclosure (TRID), and What Can Trigger a New Closing Disclosure and New Waiting Period can be avoided.
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Info about the author:
George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam,# Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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