On October 3rd, 2015 the rules of Real Estate are going to be changing. Welcome TILA (Truth in Lending Act) RESPA (Real Estate Settlement Procedures Act) Integrated Disclosure rule or TRID. Change is common now a days in Real Estate as new disclosure laws (most recently added Radon) and forms are added on an annual bases. These changes however are driven by the Consumer Financial Protection Bureau (CFPB) and the purpose is to ensure that consumers get all the information with regards to their financial decision in a timely fashion. Often times, we will see settlement statements the day before or even in some case the day of closing. This can add a lot of undue stress and scrambling with a transaction.
Any changes made to the purchase agreement will require additional time for re-disclosure, which in turn could delay closing. The issue that we have talked about as a team/office is what if something comes up at the final walk through that requires monetary compensation? Typically a final walk through will be done either the day before or the day of closing so any changes to the purchase agreement would need to allow for the time needed for re-disclosure. We have also been advised that most closings (unless cash) should have an additional 10-15 days added to the time frame. Most likely putting the closings closer to a 40-45 day window.
With any change there are always challenges, however this change feels like a big win for the Real Estate Industry and Consumers as a whole. With more regulations on the time tables in which lenders will need to have documents to both the consumers and title companies, the smoother the sale should move along in the end. If you have any questions on how this may affect you, please feel to reach out.