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TRID Rule Has Helped Borrowers Understand Their Loans
Friday, October 2, 2020
The TRID Rule has been in effect for
exactly 5 years (October 3, 2015) and the Consumer Financial Protection Bureau
(CFPB) has published an assessment of its effects and effectiveness. The TRID
Rule and its associated disclosures and forms was part of a mandate to CFPB
included in the Dodd-Frank Wall Street Reform and Consumer Protection Act to
combine previously separate mortgage disclosures given to consumers under the
Truth in Lending Act (TILA) and the 1974 Real Estate Settlement Procedures Act
(RESPA). Dodd-Frank also mandates an assessment of the rule within five years
of the effective date. Before the TRID Rule, Federal law
generally required that consumers applying for mortgages receive two different
forms, one with disclosures regarding the cost of credit (TILA) and another
concerning real estate settlement costs, the Good Faith Estimate (GFE). Shortly
before settlement consumers received two additional forms: the final TILA
disclosure and the RESPA settlement statement (HUD-1).
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