Okay, we’re less than 30 days away from one of the bigger changes in the residential mortgage lending process and the acronym for these changes is TRID. This acronym replaces these acronyms, GFE, TIL and RESPA. Remember, this is the CFPB we’re talking about and a government agency so we real estate investingshould expect nothing less. TIL is the Truth in Lending Act, GFE is the Good Faith Estimate of Settlement Charges and RESPA is the Real Estate Settlement Procedures Act.

TRID combines the TIL and RESPA into the TIL and RESPA Integrated Disclosure. Yes, it’s a double portion of alphabet soup but now that we’ve got that out of the way, here’s what you can expect come October 1.

TRID is the CFPB’s (sorry about that) second effort at making settlement charges and final loan fees more transparent. It doesn’t affect investment properties but it does affect those who flip real estate to long term buyers. The Good Faith Estimate is long gone and now lenders provide a Loan Estimate, or LE. There are certain acceptable tolerances between the initial LE and the final settlement statement the lender must adhere to but the biggest change involves timing.

Starting October 1, lenders who issue loans for those financing a primary residence must provide the TRID a full three days before closing. Prior to this new rule, a one day guideline was standard although lenders were known to provide the final numbers, then on a form called the HUD-1, even hours before the loan closed. If there were any errors on the final settlement statement, the lender could make the corrections on the spot and redraw closing papers so the closing could take place. Now however, that option will go away. If there are any changes, the three day time clock starts all over again. There’s really no other way around it. There is an “emergency” provision but lenders are more prone to ignore an emergency request but instead follow TRID rules.

If you’re selling one of your investment properties and this scenario begins to take place, you’ll need to amend the sales contract to reflect the new dates but there is no way around the three day rule.