How TRID (TILA-RESPA Integrated Disclosures) Changes the Front End of the Mortgage Process

by Amy Tierce


Amy Tierce (NMLS# 15695) is the regional vice president for Wintrust in New England.

Under TRID regulations a lender cannot require a borrower to supply back up documentation until the consumer has applied for a loan, received the three business day disclosures, and most importantly the Loan Estimate which replaces the GFE and the TIL. A lender cannot collect any fees from the consumer until he or she signs an ‘intent to proceed’ with the mortgage application.

As part of the three business day disclosures, consumers are sent a guide on “how to shop for a mortgage.” This instructs the consumer to take their Loan Estimate and use it to compare to other lenders’ offers.


Why would the CFPB suggest a consumer shop after they have applied?

The rule stating that a borrower cannot receive the three business day disclosures, specifically the GFE, until they file a complete application has been in effect since 2009. However, most lenders came up with closing cost worksheets to replace the GFE for shopping consumers to review before they applied for the loan.

The fact is, the lender cannot know or quote exact costs until the property has been identified and the closing date established. Without a property address, taxes cannot be determined. If a closing date hasn’t been set, prepaid interest cannot be figured. If the offer has not been accepted and the rate has not been locked, the loan amount, title insurance, rate and APR cannot be calculated. I believe that the CFPB wants the consumer to KNOW the true costs based on the reality of the purchase and be able to accurately compare costs.

The only way the regulators can judge the performance of mortgage professionals is to have a measureable event, which is the actual trigger of an application. Like the GFE before it, the Loan Estimate has tolerances where the fees are fixed and cannot change. There can be no ‘baiting and switching’ of the costs on the loan once the consumer has made an application.

This regulation will also impact the issuing of Pre-Approval letters. The truth is that unless the policy of the lender is to have an underwriter review and approve the loan, there is no such thing as a pre-approval. Loan originators do not have actual approval authority, so in fact any letter a borrower or realtor receives from a lender is a “Loan Officer Opinion Letter” and not any kind of approval. We receive calls weekly from borrowers who were “pre-approved” by other lenders only to be declined when they found a property and submitted a full application for a loan. I am sure that this issue came up frequently in the CFPB’s research. They want consumers to know the truth.

This policy does complicate the full vetting of a consumer in advance of making an offer. How do we confidently qualify a borrower if we have not looked at all employment, asset, credit and other documentation specific to loan qualification guidelines? Consumers may provide documentation to us voluntarily but we need to hear more guidance on how to manage the pre-qualification process more effectively. This is an area to be worked out with lenders, regulators and attorneys all across the country. Stay tuned and we will let you know how to protect your buyers and sellers when reviewing or making offers.

A 25-year veteran of real estate, Amy Tierce (NMLS# 15695) is the regional vice president for Wintrust Mortgage in New England; a division of Wintrust Financial Corporation (a $20-plus billion financial services company based in Chicago), Wintrust offers a full product menu of programs, and Tierce is excited to grow the Wintrust footprint in the Greater Boston area while exploring new talent, recruiting new individuals and creating a team of dedicated individuals. Before joining Wintrust, Amy built Fairway Mortgage into one of Massachusetts’ top lenders.

Wintrust Mortgage is a division of Barrington Bank & Trust Company, N.A., a Wintrust Community Bank NMLS #449042, an equal housing lender.

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  • Barbara Crowley says:

    How many original Loan Estimates can be issued to the borrower showing different loan amounts at one time?

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