Is TRID a good change?

By
Real Estate Agent with Dominion Fine Properties SA582226000

 While I don’t normally like to get into political topics, having just attended a training class on the new “TRID” changes, I felt I just needed to share this.

 

     On the surface, TRID is designed to protect home buyers from shady lenders.  But, the new disclosure rules and timelines are, in my opinion, going to do just the opposite.

 

     First, anything “third party” which borrowers have no control over will have a zero tolerance for discrepancy.  This typically means the credit agency and appraisal company.  Well, the choice of credit agencies is limited to just a few and, yes, the lender does choose which one to work with.  But lenders have been required to use an appraisal order mill for the last few years and cannot choose a “specific” appraiser.

 

    What this means is that a typical credit report runs about $18-25.  If there’s something reported incorrectly on the report and the lender tries to help the homeowner correct any mistakes, the credit companies typically charge about $8 per credit line, although there could be additional charges.  If the lender has disclosed a $25 fee to the homebuyer and it costs more, they can’t charge the borrower for those fees and have to “eat” the cost because of TRID.

 

    As to appraisals, again, it’s an outside company assigning to various appraisers.  But, if an appraiser has to drive further for an outlying property or needs to charge a trip fee because of other complications, then any additional fees would need to be “eaten” by the lender.  

 

   So, in all likelihood, because of the lender’s inability to charge the ACTUAL cost charged to them by third party entities, I think they’ll all just OVERCHARGE up front and pad their pockets.  Rather than a processing fee of say $500, their processing fee will now be $1500.  This way, they disclose one time and can’t be fined by the government for making changes.  Instead of charging a $500 processing fee, $450 appraisal fee, $100 appraisal trip fee and $27.18 for a credit report with the net effect to the consumer the government is trying to “protect” will be an additional $422.81 in fees.  But, hey, the mortgage company can’t be out of “compliance.”

 

   Then, there’s the “new and improved” way of disclosing interest.  When the original TIL’s came out, that was confusing enough.  But with the new TRID, interest needs to be disclosed this way:  TOTAL COST.  If a borrower takes a $100,000 loan and, because it’s a 30 year mortgage, pays $70,000 in interest over the next 30 years, the new TRID requirements state the lender must disclose the interest rate is 170%.  Gotta love this one!!!!home interest rates

 

   And, finally, as agents, if we referred our clients to any of these low life mortgage companies who aren’t in “compliance”, we can be fined in addition to the mortgage companies.  Never mind that we’ve used Nick or Anna for the last 5 years and know they will get the loan completed on time.  Let the home buyer “shop for themselves” and pick out some schlock company who’s way over charging them and misses the close of escrow.  But, hey, they’re in compliance with TRID..  

Posted by

Juli Vosmik

Dominion Real Estate Partners, LLC

480-710-0739

 

 Scottsdale and Cave Creek Real Estate

 

 

Helping you make informed decisions whether buying or selling homes in Scottsdale, Cave Creek and north Phoenix Arizona.  I know the area - I live here.

 

A portion of all sales is donated to the various animal rescue and humane societies.

 

AZ license SA582226000

 

 

 

 
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Rainmaker
596,766
Nancy Laswick
United Real Estate - Phoenix, AZ
Your REALTOR® For The Valley Of The Sun

Hi Juli Vosmik I just finished a class myself and TRID, in my opinion, will become the ultimate example of "the law of unintended consequences" for all the reasons and scenarios you have laid out in your post and many more. Oh and the real reason for the delay in implementation of TILA-RESPA Integrated Disclosure, they didn't file their notification paperwork correctly or on time. This really bodes well for the future---NOT! I'm afraid T.R.I.D is goint to be a real T.U.R.D.

Jun 24, 2015 07:35 PM #1
Rainmaker
2,346,102
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

From you post, this does not sound good to me, but I don't know that much about it.

Jun 24, 2015 08:07 PM #2
Rainmaker
794,385
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Juli, thanks for explaining the details on this, and for many lenders I could see them padding the bill to protect themselves and the consumer suffering because of the negative externalities of this law.  In a strange sort of way I think it might be a good thing that real estate agents get fined for using lenders who can't produce.   We are so tired of incompetent lenders making our sellers endure delayed closings, or being told the buyer can't get the loan afterall!

Jun 24, 2015 09:09 PM #3
Rainmaker
820,770
Juli Vosmik
Dominion Fine Properties - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Don't you love it, Nancy?  

Roger - simply don't ever move again, LOL.

Bruce, I think we all know a few lenders we trust then those that we would NEVER refer anyone to.  If we are afraid to refer any GOOD one who misses a disclosure date by one day, we could be party to a fine.  Really?  So, what?  We just no longer refer to anyone?  Crazy!!!!

Jun 25, 2015 09:48 AM #4
Rainmaker
794,385
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Juli, just wanted to thank you for the comments and wishing you a COOL 4th of July in your beautiful, but HOT Valley of the Sun area!

Jul 02, 2015 11:10 PM #5
Ambassador
2,191,693
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

I do like the looks of the new closing statement for the borrowers. I think this is an improvement. Although the other changes are just going to cause problems. 

Jul 06, 2015 01:24 PM #6
Rainmaker
681,830
Cara Marcelle Mancuso
Long Realty - Dove Mountain, Marana AZ - Tucson, AZ
Call a Marana neighbor, I'm THERE! LONG REALTY

I just went to a general class this morning and it was brought up.  I am hearing that the tolerance level is going to be a mite relaxed during a transition period.  I hope so.

Jul 17, 2015 06:14 AM #7
Rainmaker
3,262,705
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Juli hang in there, it is all good, it will clean up the mess and get rid of the agents and lenders that should not have been here in the first place, just get used to new time lines,new terminology and it is all good:), Endre

Aug 14, 2015 04:20 PM #8
Rainmaker
4,207,370
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Juli, this will be a HUGE change, and still not sure if it really do what the CFPB think it will.

Sep 04, 2015 06:38 AM #9
Rainmaker
525,764
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Nov. 2017, two years after TRID implementation, here's my observation:

  • It holds loan officers accountable for their initial offering of terms and costs, which in turn helps reduce last-minute surprises to the buyer.
  • It adds 3 to 5 days or more to the closing process.
Nov 24, 2017 12:40 PM #10
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Rainmaker
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Juli Vosmik

Scottsdale/Cave Creek, AZ real estate 480-710-0739
Find out what your Scottsdale area real estate is worth.
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