How TRID Impacts Contract Timelines
Realtors are asking how they should adjust closing periods and contingencies with TRID coming into effect on Saturday. Some lenders are telling Realtors they need 45 days to close because of TRID, and we have no idea why; those lenders must have monks in back rooms copying loan documents with quill pens on parchment paper.
In any case, we are asking for 7 more days to close than typical, and maybe another day for loan contingencies. Our “Fast 14” close may turn into the “Terrific 21” temporarily, but we think we will get back to speed within a few weeks.
Managing Disclosures, Variances, and Delays
Again, TRID requires that we draw up a very accurate “Loan Estimate” (LE) at the front end of the disclosure process, but this is not that different from our disclosure requirements now. Loan docs cannot be signed within 7 days of the LE receipt date.
TRID also requires that we draw a Closing Disclosure (CD) that requires 3 days of seasoning before borrowers can sign loan documents. The CD must be within a 10% variance of the LE, or the LE has to be re-issued with another 7 day waiting period (this is what is sparking so much fear). The trick is to make sure the CD matches the LE, even if we (the lender) has to eat some fees.
Note: Even when JVM eats fees, we will still have the delay as borrowers need to be aware of all fees, even though JVM pays for them. Also, there are no fee adjustments permitted once the CD is sent unless it’s due to a borrower change or cut appraisal, etc.
