TRID (TILA-RESPA Integrated Disclosure Rule)

TRID created a structured mortgage disclosure timeline that governs the entire loan origination process from application to closing. The timeline begins when a consumer submits a loan application (defined as completing six key pieces of information: the borrower's name, income, Social Security number, property address, estimated property value, and desired loan amount). Within three business days of receiving this application, the lender must deliver the Loan Estimate. The LE must be provided in person, by mail, or electronically (with borrower consent). The LE contains five color-coded sections: Loan Terms (page one), Projected Payments (page one), Costs at Closing (page two with detailed Loan Costs table and Other Costs table), Calculating Cash to Close (page three), and Comparisons (APR and TIP percentage). The form must use standardized terminology — for example, "origination charges" replaces the old "origination fee" disclosure, and "services borrower did not shop for" replaces the confusing "required services" category. The LE is valid for 10 business days, during which the lender cannot change estimated fees (except in response to changed circumstances such as the borrower requesting a different loan product or the property appraisal coming in lower than expected). After the borrower indicates intent to proceed, the lender begins processing and underwriting the loan.

The second major TRID requirement is the Closing Disclosure, which must be delivered to the borrower at least three business days before closing. The CD is a five-page form that mirrors the LE format but contains final, binding loan terms and costs. The three-business-day review period is measured using the "receipt rule" under Regulation Z: if the CD is hand-delivered, the period begins immediately; if sent by mail, three business days are added to account for delivery time; if sent electronically, the borrower is presumed to have received it the day the email is sent. The three-day period includes Saturdays as business days but excludes Sundays and federal legal holidays. If the APR changes by more than 0.125% (0.25% for adjustable-rate mortgages), if a prepayment penalty is added or changed, or if the loan product changes (e.g., fixed-rate to adjustable-rate), a new three-day waiting period is triggered and a revised CD must be provided. This redisclosure requirement was designed to prevent last-minute surprise changes at the closing table — a common problem before TRID. The CFPB found that before TRID, approximately 15% of borrowers experienced a cost increase of 10% or more at closing compared to the original estimate. TRID's tolerance enforcement has significantly reduced this issue: CFPB compliance exams in 2023 found that 89% of lenders achieved tolerance compliance on zero-tolerance items, compared to approximately 65% compliance under the pre-TRID GFE/HUD-1 framework. Lenders who violate TRID tolerance requirements must reimburse borrowers for excessive charges and may face civil penalties under TILA and RESPA.

TRID fundamentally changed the mortgage shopping experience by giving borrowers the tools and time to make informed, apples-to-apples comparisons between loan offers. Before TRID, lenders could quote a low interest rate while hiding significant costs in the fine print — the so-called "bait and switch" — because the GFE and TILA forms used different calculation methodologies, making direct comparison nearly impossible. Now, every lender must use the identical Loan Estimate form, making it straightforward to compare offers side by side. The CFPB's Know Before You Owe website provides consumer guides that walk borrowers through reading each section of both the LE and CD. For example, when comparing two loan offers, you can turn directly to the "Comparisons" table on page three of each LE to compare the APR (total cost of borrowing expressed as a yearly rate) and the Total Interest Percentage (TIP — the total amount of interest you will pay over the loan term expressed as a percentage of the loan amount). A lender offering a 6.5% rate with 2 points might have a 6.8% APR and a TIP of 70%, while a competing lender offering 6.75% with zero points might have a 6.85% APR and a TIP of 72% — revealing that the points-based loan is actually cheaper over the long term despite the lower rate.

The three-day CD review period is a powerful consumer protection that borrowers should use actively. The CFPB recommends that borrowers compare every line item on the CD against the LE they received and question any increases — especially in the zero-tolerance categories. If the origination charge increased from $2,500 to $3,000 between the LE and CD, the lender must reimburse the $500 difference at closing because origination charges are in the zero-tolerance category. Borrowers should also verify their personal information on the CD: name spelling, property address, loan type (conventional, FHA, VA), loan term, and amortization type. A 2024 study by the Urban Institute found that approximately 8% of Closing Disclosures contain errors that could affect loan terms or borrower obligations. Common errors include incorrect escrow amounts, misclassified fees, and wrong interest rate calculations. Borrowers who identify errors before closing can request corrected documents and delay closing if necessary. The TRID rule also requires lenders to retain records of all disclosures for at least three years after closing, giving borrowers legal recourse if they later discover undisclosed changes. Understanding TRID disclosures is especially critical for first-time homebuyers, who are most vulnerable to fee manipulation. The CFPB has published online learning modules and a mobile-friendly Loan Estimate Explainer that walks through each line item with plain-language explanations and illustrative examples.