It’s been around for years now, but how many times are you still seeing your lender failing to take notice at the onset of what constitutes a TRID loan? TRID constitutes a closed end loan primarily for personal or household use secured by real property regardless of the lien position (no dwelling is required as collateral). This includes trusts as borrowers, construction only loans (lot loan, land parcels of 25 or more acres). Exemptions include business purpose loans, rentals (where owners do not occupy greater than 14 days per year), reverse mortgages and HELOCs. Even if the collateral is commercial real property, if primarily consumer purpose, TRID applies. For a TRID loan, property is the address of the property securing the loan, not purchased (if different). TRID purpose can be tricky. Purchase relates to acquisition of property. Refinance is used to refinance an existing obligation secured by the identified property. Construction will finance the initial/new construction of a dwelling on the property securing the loan. Home Equity is used for any purpose not listed as purchase, refinance, or construction. A TRID discussion could go on and on; however, identification and classification are key concepts out of the gate to ensure the TRID documentation/disclosure process. Remember, for example, if a closed end loan recurred by real property is erroneously treated as commercial when the loan was in fact consumer, the APR effectively becomes the interest rate and a no fee loan has been created. TRID identification and classification is key.
FAQs
What is the 10 tolerance rule for Trid? ›
The aggregate amount of the charges paid by or imposed on the consumer at consummation may not exceed ten percent for fees originally disclosed on the LE. In the event these fees were not disclosed in good faith, they would be subject to the zero tolerance bucket.
What are the 3 day rules for Trid? ›The three-day period is meas- ured by days, not hours. Thus, disclosures must be delivered three days before closing, and not 72 hours prior to closing. Disclosures may also be deliv- ered electronically on the disclo- sures due date in compliance with E-Sign requirements.
How do you count the 3 days from the closing disclosure? ›The three-day rule requires the counting of “business days,” which are “all calendar days except Sundays and the legal public holidays specified in 5 U.S.C.
What is the 2 2 2 rule for mortgage? ›A good way to remember the documentation you'll need is to remember the 2-2-2 rule: 2 years of W-2s. 2 years of tax returns (federal and state) Your two most recent pay stubs.
Can I waive the 3 day closing disclosure? ›A consumer may modify or waive the right to the three-day waiting period only after receiving the disclosures required by § 1026.32 and only if the circ*mstances meet the criteria for establishing a bona fide personal financial emergency under § 1026.23(e).
Can you waive the 3 day Trid rule? ›The consumer may, after receiving the disclosures required by this paragraph (c)(1), modify or waive the three-day waiting period between delivery of those disclosures and consummation or account opening if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency.
What are the 6 Trid requirements? ›- Name.
- Income.
- Social Security Number.
- Property Address.
- Estimated Value of Property.
- Mortgage Loan Amount sought.
The TRID Rule applies to most types of mortgage loans. Mortgage loans to which the TRID Rule does not apply include HELOCs, reverse mortgage loans, or mortgage loans secured by a mobile home or dwelling that is not attached to real property.
Does Saturday count as a Trid day? ›Reference this chart to determine when you need to be sure that the Closing Disclosure is either electronically received by your borrower or delivered via US Mail. Saturdays count toward this 3-day rule! NOTE: If a federal holiday falls in the three-day period, add a day for disclosure delivery.
Does Sunday count for Trid? ›The Precise Definition of Business Day §1026.2(a)(6)-2: The precise definition of business day means all calendar days except Sundays and the 6 floating and 4 fixed legal holidays (New Year's Day 1/1, Martin Luther King Jr.'s Birthday, Washington's Birthday, Memorial Day, Independence Day 7/4, Labor Day, Columbus Day, ...
What is the mailbox rule for Trid? ›
If a lender uses the mailbox rule, then the Closing Disclosure is deemed received by the borrower on the third business day after the creditor (or settlement agent) drops the Closing Disclosure in the mail.
What happens if I don t get my closing disclosure 3 days before closing? ›What should I do if I do not get a Closing Disclosure three days before my mortgage closing? If you have not received this document, you should request one from your lender immediately. You should also not go through with the closing until you receive and review the Closing Disclosure.
Does weekend count to 3 day closing disclosure? ›This three business-day rule was introduced in October of 2015, and it applies to both original mortgages and refinancing. When your three business-day waiting period starts is determined by your consummation day. This three business-day rule may include Saturdays, but it does not count Sundays or holidays.
What triggers a new 3 day waiting period? ›The requirement for the additional three business-day waiting period once the Closing Disclosure has been delivered applies under three specific scenarios: 1) an inaccurate APR, which violates the established tolerances; 2) the addition of a prepayment penalty; or, 3) a change in the loan product.
What is the golden rule of mortgage? ›The 28% / 36% Rule
To use this calculation to figure out how much you can afford to spend, multiply your gross monthly income by 0.28. For example, if your gross monthly income is $8,000, you should spend no more than $2,240 on a monthly mortgage payment.
The TRID rule provides that the borrower can waive the seven-business-day waiting period after receiving the LE and the three-day waiting period after receiving the CD if the borrower has a “bona fide personal financial emergency,” which requires closing the transaction before the end of these waiting periods.
What is the 4x rule for mortgages? ›If you purchase a home that is 4 times your annual income, then 1 times your income is 25% of the value of the home. In that case, you would be able to make a 20% down payment and still have money left over to cover closing and moving costs. Consider saving this amount first before you begin home shopping in earnest.
What is the best mortgage rule? ›According to the 28/36 rule, you should spend no more than 28% of your gross monthly income on housing and no more than 36% on all debts. Housing costs can include: Your monthly mortgage payment. Homeowners Insurance.