TRID
The disclosure regime, effective October 3, 2015, that merged the old TILA and RESPA mortgage forms into the Loan Estimate — due within three business days of application — and the Closing Disclosure, which the consumer must receive three business days before consummation.
Key Takeaways
- The TILA-RESPA Integrated Disclosure rule, known as TRID, took effect October 3, 2015 and replaced four older mortgage forms with two.
- The Loan Estimate replaced the Good Faith Estimate and the initial Truth in Lending disclosure. The Closing Disclosure replaced the HUD-1 settlement statement and the final Truth in Lending disclosure.
- A creditor is responsible for ensuring the Loan Estimate is delivered to the consumer or placed in the mail no later than the third business day after the creditor receives the consumer's application, under 12 CFR 1026.19(e)(1)(iii).
- The consumer must receive the Closing Disclosure no later than three business days before consummation, under 12 CFR 1026.19(f)(1)(ii)(A). For that count a business day is every calendar day except Sundays and the federal legal public holidays, so Saturdays count.
What It Means
TRID is the shorthand for the TILA-RESPA Integrated Disclosure rule, the mortgage disclosure regime that took effect on October 3, 2015. Before that date a borrower received four forms drawn from two different federal statutes. The Truth in Lending Act produced an initial and a final Truth in Lending disclosure, and the Real Estate Settlement Procedures Act produced the Good Faith Estimate and the HUD-1 settlement statement. The forms overlapped, used different vocabulary for the same numbers, and arrived at different moments in the loan.
TRID collapsed those four into two. The Good Faith Estimate and the initial Truth in Lending disclosure became the Loan Estimate, which arrives near the start of the loan. The HUD-1 and the final Truth in Lending disclosure became the Closing Disclosure, which arrives before closing in a matching layout, so a borrower can set the two side by side and see what moved.
The rule is not a separate statute. It lives inside Regulation Z, the rule that implements the Truth in Lending Act, and it reaches most closed-end consumer credit transactions secured by real property. Reverse mortgages are outside it. For a broker the practical content of TRID is two deadlines, because those deadlines decide when a client is allowed to sign.
How It Works in Washington
TRID is federal, so the two deadlines read the same in Washington, Oregon and Georgia. A creditor must ensure the Loan Estimate is delivered to the consumer or placed in the mail no later than the third business day after it receives the application (12 CFR 1026.19(e)(1)(iii)). The consumer must receive the Closing Disclosure no later than three business days before Consummation, which Regulation Z defines as the time the consumer becomes contractually obligated on the credit transaction (12 CFR 1026.19(f)(1)(ii)(A)).
Only three changes restart that three day clock: the disclosed annual percentage rate becomes inaccurate, which means an increase of more than one eighth of a percentage point on a fixed rate loan or more than one quarter of a point on an adjustable rate loan, a change in the loan product, or the addition of a prepayment penalty. The Bureau was explicit that ordinary late changes do not delay closing, naming typographical errors, problems discovered on the walk through, and most changes to payments made at closing.
In Washington the federal rule meets state law at the closing table. Escrow is a licensed occupation here. RCW 18.44.021 makes it unlawful for any person to engage in business as an escrow agent without a valid license issued by the director of financial institutions, with exemptions for attorneys practicing law, banks and credit unions, title insurance companies, and real estate firms and brokers who take no compensation for the escrow work. So in Washington the signing appointment itself is normally run by a licensed escrow agent under chapter 18.44 RCW, while the Closing Disclosure deadline that fixes the earliest possible date for that appointment comes from federal law. A Washington broker who sets a closing date without asking when the Closing Disclosure was issued is guessing. Our post on interest rates and WA home sales covers the financing side new brokers meet first.
Example
Dana is buying a Spokane condominium for $410,000 with 20 percent down, so she puts $82,000 down and borrows $328,000. She completes her application on Monday, September 14, 2026. Her lender must get the Loan Estimate to her or into the mail no later than the third business day after receiving it, and puts it in the mail on Wednesday, September 16.
Signing is booked with a licensed Spokane escrow agent for Friday, October 16. Counting back three business days from Friday gives Thursday, Wednesday and Tuesday, so Dana has to receive her Closing Disclosure no later than Tuesday, October 13. It reaches her that Tuesday, and the closing date holds.
On Wednesday, October 14, the lender calls. Dana's rate lock has lapsed and the annual percentage rate on her fixed rate loan is going from 6.375 percent to 6.625 percent. That is an increase of one quarter of a percentage point, double the one eighth of a point a fixed rate loan is allowed, so the disclosed rate is now inaccurate and a corrected Closing Disclosure with a new three business day waiting period is required. Dana receives the corrected form on Thursday, October 15. Counting forward, Friday the sixteenth is the first business day, Saturday the seventeenth is the second because Saturdays count, Sunday does not count, and Monday the nineteenth is the third. Dana's closing moves from Friday to Monday, October 19.
Common Mistakes and Exam Traps
- The Loan Estimate deadline runs three business days after the creditor receives the application. The Closing Disclosure deadline runs three business days before consummation. Both are threes, but they count in opposite directions from different events.
- Only three changes trigger a new three business day waiting period on the Closing Disclosure: the annual percentage rate becomes inaccurate, the loan product changes, or a prepayment penalty is added. A problem found on the walk through, a typographical error, or a change to a seller credit does not restart the clock.
- TRID did not repeal the Truth in Lending Act or the Real Estate Settlement Procedures Act. It integrated their disclosure forms, and the requirements now sit inside Regulation Z.
- For the Closing Disclosure count, a business day is every calendar day except Sundays and the federal legal public holidays, so Saturday counts. The looser definition, a day the creditor's offices are open for substantially all business, is the one used for the Loan Estimate application deadline.
Where you'll learn this
Frequently Asked Questions
What is the difference between the Loan Estimate and the Closing Disclosure?
The Loan Estimate is the early form, due within three business days of application, and it estimates the rate, payments and closing costs. The Closing Disclosure is the final form, which the consumer must receive three business days before consummation, and it states the actual terms. They use a matching layout so the borrower can compare them line by line.
Does TRID apply to every mortgage?
No. It applies to most closed-end consumer credit transactions secured by real property. Reverse mortgages subject to 12 CFR 1026.33 are excluded, along with transactions exempt under 12 CFR 1026.3.
If a problem turns up on the final walk through, does closing have to be delayed three more days?
No. The Bureau named walk through problems, typographical errors and most changes to payments made at closing, including seller credits, as changes that do not require a new three day review period. Only an inaccurate annual percentage rate, a change of loan product, or an added prepayment penalty restarts the clock.