TILA-RESPA Integrated Disclosure, or TRID, is a 2015 rule from the Consumer Financial Protection Bureau (CFPB) which was designed to replace HUD-1 and Good Faith Estimate disclosures. It is a combination of two acts: the Truth in Lending Act (TILA) and the Real Estate Settlement Protection Act (RESPA). Combining the two is meant to make all fees clearer and more transparent.
Instead of four closed-end credit transaction disclosures (that is, credit that should be repaid by the end of the loan term), the government combined (“integrated”) them into two. This design is meant to help borrowers have a more complete understanding of the terms of their loan before closing. TRID documents place the most important information, your principle, your interest, insurance, and escrow, all at the top of the page so nothing is hidden from the borrower.
How does TILA-RESPA affect you? Well, if you are comparing mortgage lenders, all fees are alphabetized on the second page in order to make comparisons as transparent as possible. All costs are added together at the bottom of the page and you get to decide if you want to complete the transaction; if you choose that you do not, the estimate expires in 10 days. If, within 10 days, you decide you do want to complete the transaction, your lender is locked into the fees they’ve quoted. If anything does need to be changed, the lender is required to give you a revised quote.
TRID forms also provide you with a Total Interest Percentage (TIP): a representation of how much interest you will pay throughout the loan. It is written as a percentage. This is a measure of transparency—allowing you to be more aware of how much you will pay in interest throughout the life of the loan.
Lenders are also required to provide a closing disclosure (CD) no less than three days prior to close. The CD helps you compare the actual charges to your estimate. The CD has a very similar format to your estimate to make a comparison as simple as possible. Your lender will then provide a few pages of information. The CD is designed to be a final closure, but last-minute changes may occur. Because last-minute changes can happen, you may receive a revised CD after closing.
TILA-RESPA Integrated Disclosure is designed with the consumer in mind. It makes making your loan decisions and comparison shopping as transparent and as easy as possible.