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A Detailed Look at TILA-RESPA Integrated Disclosures (TRID)

By Arvin Sahakian · May 1, 2015 · Mortgage

A Detailed Look at TILA-RESPA Integrated Disclosures (TRID)

Image courtesy of Flickr, GotCredit

The new mortgage Loan Estimate and Closing Disclosure documents will replace RESPA and TILA disclosures. Easier to read, understand, and use to compare offers with other lenders.

Whenever lenders and consumers come together for a loan transaction, things can get complicated to say the least. Mortgage loans require the exchange of personal information, collateral to secure debt, contractual obligations, and the notarization of legally binding documentation, just to mention a few things.

This is where disclosures come to the rescue. You must receive disclosures by mortgage lenders in the beginning and towards the end of the mortgage loan process to ensure you are aware of the costs, fees, loan amount and agreements you are signing an obligation to.

Let's take a closer look and review the new Loan Estimate and Closing Disclosure together.

Loan Estimate

You must receive the Loan Estimate disclosure within 3 business days of the lender/broker receiving your mortgage loan application. This three page disclosure is intended to give you a clear understanding of what you can expect with the type and term of loan you are applying for. You will also see what fees, costs and payments are associated with your loan.


Page 1: Four Sections


1. General Information

  • Date Issued
  • Applicant Names and Mailing Addresses
  • Property Address
  • Sale Price/ Property Value
  • Loan Term (such as 30 years)
  • Purpose of Loan (such as Refinance)
  • Product (such as Fixed Rate)
  • Loan Type (such as Conventional or FHA)
  • Loan ID Number
  • Rate Lock (whether or not your quoted rate is locked in, and if so, for how long)

2. Loan Terms

  • Loan Amount
  • Interest Rate
  • Monthly Principal & Interest Payment
  • Prepayment Penalty (whether or not you have one, and if so, how much it can be)
  • Balloon Payment (whether or not you have one, and if so, how much it can be)

3. Projected Payments

  • Principal and Interest
  • Mortgage Insurance (if applicable)
  • Estimated Escrow/Impounds (if applicable)
  • Total Estimated Monthly Payments (derived from the 3 bullet points above)
  • Estimated Taxes, Insurance and Assessments (whether or not it's included in monthly payments)

4. Costs at Closing

  • Estimated Closing Costs
  • Estimated Cash to Close (out-of-pocket expenses required to close your loan). This section will also outline any refund or cash-back due back at closing.

Page 2: Three Sections


1. Loan Costs

  • Origination Charges (such as application fee, underwriting fee and mortgage points)
  • Services You Cannot Shop For (such as appraisal, credit report and flood certification fees)
  • Services You Can Shop For (such as pest inspection, survey and title insurance fees)
  • Total Loan Costs (derived from fees and charges in the 3 bullet points above)

2. Other Costs

  • Taxes and Other Government Fees (such as recording fees and transfer taxes)
  • Prepaids (items that may require a pre-payment by your lender: such as 6 months of home owners insurance payments, several months of mortgage insurance payments if applicable, pre-paid daily loan interest, and several months' worth of property tax payments)
  • Initial Escrow Payment at Closing (if your lender requires an escrow/impound account, the first 1 or 2 months of payments for taxes and insurance will be collected up front)
  • Other (such as owners title insurance policy)
  • Total Other Costs (derived from fees, charges and payments in the 4 bullet points above)
  • Total Closing Costs (derived by adding Total Loan Costs and Total Other Costs together)

3. Calculating Cash to Close

  • Total Closing Costs (from page 2 section 3 mentioned above)
  • Closing Costs Financed (any closing costs that are to be included in your loan amount)
  • Down Payment/ Funds from Borrower (any out-of-pocket money due before closing)
  • Deposit (funds deposited at the beginning of the process, such as an earnest money deposit from a real estate purchase contract)
  • Funds for Borrower (any funds designated to go back to you at the closing of escrow process)
  • Seller Credits
  • Adjustments and Other Credits
  • Estimated Cash to Close (derived from the total of the 6 bullet points above)

Page 3: Four Sections


1. Additional Information About This Loan

  • Lender Name
  • NMLS/ License ID for Lender
  • Loan Officer Name
  • NMLS/ License ID for Loan Officer
  • Email Address
  • Phone Number

If a Mortgage Broker is Involved in the Transaction:

  • Mortgage Broker Name
  • NMLS/License ID
  • Loan Officer Name
  • NMLS/ License ID of Loan Officer
  • Email Address
  • Phone Number

2. Comparisons

  • In 5 years (outlines the total of your principal and interest payments over the first 5 years)
  • Annual Percentage Rate: APR (your costs over the life of your loan expressed as an interest rate)
  • Total Interest Percentage: TIP (total amount of interest you will pay over the life of the loan expressed as a percentage of your loan amount)

3. Other Considerations

This sections asks you to review further information pertaining to the following items:

  • Appraisal
  • Assumption (whether or not the lender will allow you to transfer this loan to a new homebuyer)
  • Homeowner's Insurance (whether or not the lender will require this insurance)
  • Late Payment
  • Refinance
  • Servicing (whether or not the lender intends to collect payments or designate another company)

4. Confirm Receipt

You will simply sign and date this section to show the lender you have received and read the disclosure.

Closing Disclosure

You must receive the Closing Disclosure within 3 business days of the consummation of your loan (the date your loan process is set to close). This five page document is a more detailed view of the Loan Estimate disclosure we have described above.

Take note, that the first 2 pages of the Closing Disclosure are the same as the first 2 pages of the Loan Estimate disclosure. The primary difference is that the dollar amounts listed within the Closing Disclosure are final, and not expected to change under normal circumstances.

Due to the similarity of the first two pages from each of the two disclosures, we will begin reviewing the Closing Disclosure from the third page.


Page 3: Two Sections


1. Calculating cash to Close

You will use this table to easily see what has changed from your Loan Estimate disclosure.

  • Total Closing Costs (from page 2 section 3 mentioned above)
  • Closing Costs Financed (any closing costs that are to be included in your loan amount)
  • Down Payment/ Funds from Borrower (any out-of-pocket money due before closing)
  • Deposit (funds deposited at the beginning of the process, such as an earnest money deposit from a real estate purchase contract)
  • Funds for Borrower (any funds designated to go back to you at the closing of escrow process)
  • Seller Credits
  • Adjustments and Other Credits
  • Cash to Close (derived from the total of the 6 bullet points above)

2. Summaries of Transactions

Borrower's Transaction

  • Due from Borrower at Closing (such as closing costs due at closing and sale price of property if a purchase transaction)
  • Adjustments (if applicable)
  • Adjustments for items Paid by Seller in Advance (if applicable in a purchase transaction)
  • Paid Already by or on behalf of Borrower at Closing (such an earnest money deposit or purchase loan if applicable in a purchase transaction)
  • Other Credits (such as a rebate/ refund from a title or escrow company)
  • Adjustments for Items Unpaid by Seller (such as county or city taxes if applicable)
  • Calculation (Total due from borrower at closing and items already paid by borrower or on borrowers behalf)
  • Cash to Close (amount due by borrower to close loan, or paid to the borrower as cash-back)

Seller's Transaction (if applicable during a real estate purchase)

  • Due to Seller at Closing (such as sales price)
  • Adjustments for Items Paid by Seller in Advance (such as county or city taxes)
  • Due from Seller at Closing (such as an excess deposit from buyer, seller paid closing costs)
  • Calculation (Total due from seller at closing and items already paid by seller or on seller's behalf)
  • Cash to Close (amount due by seller to close the transaction, or paid to the seller)

Page 4: One Primary Section


This section will include additional information about this particular loan.

1. Loan Disclosures

  • Assumption (whether or not the lender will allow you to transfer this loan to a new homebuyer)
  • Demand Feature (whether or not your lender is able to demand early repayment at any time)
  • Late Payment (describes when a payment is considered late, and how much the late fee is)
  • Negative Amortization (if applicable, will describe whether or not you have this loan option)
  • Partial Payments (describes what your lender will do if payments are less than required amount)
  • Security Interest (will list the property address that is being used to secure the borrowers loan)
  • Escrow Account (describes whether or not your loan has an escrow/impound account, and a breakdown of the money being held in this account and the monthly payments that will be paid towards taxes and insurance on your behalf)

Page 5: Four Sections


1. Loan Calculations

  • Total Payments (total you will pay through the life of your loan, in addition to the principal, interest, mortgage insurance and loan costs)
  • Finance Charge (total dollar amount the loan will cost you)
  • Amount Financed (the initial loan amount you borrowed)
  • Annual Percentage Rate: APR (your costs over the life of your loan expressed as an interest rate)
  • Total Interest Percentage: TIP (total amount of interest you will pay over the life of the loan, expressed as a percentage of your loan amount)

2. Other Disclosures

  • Appraisal (states the lender must give you a free copy of the appraisal report 3 business days before the closing of your loan)
  • Contract Details (states where you should look for particular details on your obligations)
  • Liability After Foreclosure (states whether or not you are protected from liability in case the foreclosure does not cover the amount of the unpaid balance on the loan)
  • Refinance (states you may or may not be eligible to refinance based on your unique situation)
  • Tax Deductions (describes when you wouldn't be able to use interest as tax deductions)

3. Contact Information

You will be given the complete details of the contact and licensing information for the following:

4. Confirm Receipt

You will simply sign and date this section to show the lender you have received and read the disclosure.

Moving Forward

As you can see from this detailed review of the new mortgage disclosures set to go into effect October 3, 2015, the consumer's best interests are seriously taken into consideration. The idea behind these new disclosures is to make them as simple, and easy to understand as possible in comparison to the old RESPA and TILA disclosures which are currently in use during the publication of this article.

Mortgage loans can be complex transactions to say the least, and there is no reason to further complicate things for consumers. The RESPA and TILA disclosures currently in use are different, but have overlapping information. It is for these reasons, under the direction of the U.S. Congress, the Consumer Financial Protection Bureau (CFPB) was designated to create and design these new mortgage disclosures.


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