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Five years ago, big changes to federal requirements for the mortgage loan disclosure processes produced great anxiety in the lending world. Lenders feared they were facing an onslaught of complicated, new compliance demands that would inflate the cost and risks of every loan origination and leave them perpetually at risk of penalties.

The TILA- RESPA Integrated Disclosure (TRID) rules were instituted in late 2015 and administered by the Consumer Financial Protection Bureau. TRID consolidated four existing disclosures required under TILA and RESPA for closed-end credit transactions secured by real property into two forms:

• The Loan Estimate (LE) replaced the Good Faith Estimate (GFE) and initial Truth-in-Lending Disclosure, which are provided to consumers at the start of the transaction and include both initial disclosures and timing restrictions (must be provided within 3 business days from the date the application is received)
• The Closing Disclosure (CD) replaced the HUD-1 Settlement Statement and final Truth-in-Lending Disclosure, providing consumers the required 3 days to review all final terms and conditions and seeking to prevent borrowers from signing documents under duress

Lenders’ anxiety around these new rules was based on the lack of clear guidance from the CFPB, the myriad interpretations by varying investors, and potential penalties associated with non-compliance.