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Understanding TRID

The TILA-RESPA Integrated Disclosure (TRID) rule is a consumer protection regulation that was implemented by the Consumer Financial Protection Bureau (CFPB) in 2015. The TRID rule is also known as the "Know Before You Owe" mortgage disclosure rule. It combines and replaces the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) disclosures that borrowers previously received when applying for a mortgage.

The purpose of the TRID rule is to help consumers better understand the terms and costs of their mortgage by requiring lenders to provide two separate disclosures: the Loan Estimate and the Closing Disclosure. The Loan Estimate must be provided to the borrower within three business days of receiving a mortgage application, and it provides an estimate of the loan terms, closing costs, and other fees associated with the mortgage. The Closing Disclosure must be provided to the borrower at least three business days before the closing of the mortgage, and it provides a final breakdown of the loan terms, closing costs, and other fees.

The TRID rule requires lenders to use a standardized form for these disclosures, which makes it easier for borrowers to compare offers from different lenders and to understand the terms of their mortgage. The TRID rule also limits the ability of lenders to change certain fees after the Loan Estimate has been provided, which helps to reduce the risk of surprises for borrowers at closing.

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