TRID turned one year old last week. If there was a party, this newspaper did not receive an invitation.
The Truth In Lending Act Real Estate Settlement Procedures Act Integrated Disclosure, more commonly known as TRID, went into effect on Oct. 3, 2015. The Consumer Financial Protection Bureau (CFPB) prefers to call it the “Know Before You Owe” mortgage disclosure rule.
The initial implementation date was pushed back to give the industry more time to prepare for the massive changes TRID required of them. Lenders wanted more time to find and repair any bugs in their new system. They reasoned a fall/winter start date would let them test their new systems during a relatively slow part of the real estate cycle. It worked better than many in the industry thought it would.
Throughout 2015, real estate agents, attorneys and lenders were talking about the nightmare scenario: Some hapless family would move everything out of their house and into a moving van and show up to the closing only to find that a last-minute change would push their closing date back three days and they’d have nowhere to stay.
I’ve been asking around for a year and as near as I can tell, it hasn’t happened in either Massachusetts or Connecticut.
From what I gather, there are some lenders who are having trouble closing loans in fewer than 45 days, but not in Greater Boston. Inside Route 128, the market is so hot and competitive, lenders can’t afford to be slow. Lenders who invested in the technology and manpower to deal with TRID are regularly closing loans in 30 days or less, though they have to get creative and hustle to do it.
Penalties are another fear from a year ago that hasn’t panned out. Lenders feared they were risking the CFPB’s ability to levy seven-figure fines on even clerical errors. The CFPB addressed this early on by assuring lenders they wouldn’t be fined for minor errors during the early days of implementation. So far, so good.
Some people compare them TRID to Y2K, but it’s a false equivalency. Y2K didn’t happen regardless of whether people prepared for it or not. TRID-related disasters did not happen on a wide scale because lenders put the time and money into preparing for it.
Many lenders compare TRID to the Dodd-Frank Act. It’s just another set of new government regulations they had to absorb in order to do business; it wasn’t the first time it’s ever happened and it probably won’t be the last.