A new government rule making major changes to the mortgage process — known as the “TILA-RESPA Integrated Disclosure” (TRID) rule — goes into effect in Fall 2015. This new rule will affect the loan signing process and the documents Notary signing agents work with during assignments. Are you ready for this change? Take our quiz and see how much you know about how TRID will affect you. (Detailed answers can be found below.)
ANSWERS:
1. Under TRID, lenders will consolidate information from the following documents into a single “Closing Disclosure”:
A. Deed of Trust and Right To Cancel
B. Truth-In-Lending (TIL) disclosure and HUD-1 Settlement Statement
C. Name Affidavit and HUD-1 Settlement Statement
D. All of the above
Answer: B. The part of the rule most likely to affect signing agents is the Closing Disclosure, which consolidates the Truth-in-Lending (TIL) disclosure and the HUD-1 Settlement Statement. The new forms are intended to simplify and clarify the loan process for borrowers and give them more time to review and ask questions about the terms of their loan.
2. TRID requires lenders to provide borrowers with the new Closing Disclosure form:
A. On the day the borrower signs
B. No later than 48 hours after the borrower signs
C. No later than seven business days before the borrower signs
D. No later than three business days before the borrower signs
Answer: D. TRID requires the Closing Disclosure to be received by the borrower at least three business days before the borrower becomes legally obligated under the loan — which often occurs when the note is signed. The rule is intended to give borrowers more time to review and better understand their loan terms before they fully commit.
3. TRID is currently scheduled to take effect on the following date in 2015:
A. September 27
B. October 3
C. November 11
D. December 31
Answer: B. October 3, 2015 is the day when the Consumer Financial Protection Bureau’s new mortgage disclosure rule goes into effect. TRID was originally scheduled for implementation August 1, but due to mortgage industry concerns about implementing TRID, the CFPB postponed to give the industry more time to prepare.
4. True or False: After October 3, Notary signing agents will no longer see the HUD-1 Settlement Statement and Truth in Lending Disclosure.
A. True
B. False
ANSWER: False. The new TRID disclosures must be included in loans for which a borrower first applies beginning October 3. Loans in the pipeline before October 3 will contain a HUD-1 and Truth in Lending Statement, not the TRID disclosures. In addition, after October 3, certain types of loans – for example, home equity lines of credit and reverse mortgages – will not have a TRID disclosure but will retain the HUD-1 and Truth in Lending Disclosure.