The Digital Mortgage and TRID
As the world becomes ever more digital, consumers expect every bit of their lives to become simpler and faster. It’s an expectation 21st-century businesses will need to meet while maintaining an innovative competitive edge.
The mortgage industry has historically lagged far behind technological advances until the most recent launch of the Digital Mortgage. Digital lending has changed the face of lending by putting consumers in control of their mortgage transaction. The result has been greater transparency, improved customer service and seamless regulatory implementation – solid wins for Guaranteed Rate.
With TRID rolling out on the heels of the Digital Mortgage launch, the new digital platform was truly tested – it exceeded all expectations.
What does the Digital Mortgage do?
The vision behind digital lending was to give consumers more freedom and control while freeing up originators to focus on more revenue generating activities – it worked.
In no more than 30 minutes, the Digital Mortgage allows applicants to complete their entire loan application, choose a loan type and rate, obtain all three credit scores for free, run and receive automated underwriting (AUS) and digitally sign all necessary disclosures. This has shifted the bulk of administrative work from the originator to the applicant.
With approval in hand, applicants can then digitally upload needed docs from AUS results by using encrypted technology from Box. The digital platform also allows milestones to be tracked; keeping all parties involved in the transaction aware of TRID timing requirements and on task.
Applicants, however, are not left to their own devices with the Digital Mortgage. If help is needed along the way, their mortgage originator can be easily contacted for assistance.
What is TRID and how has it helped consumers?
Prior to TRID implementation, the CFPB surveyed consumers and learned most were unable to identify their loan amount on the Good Faith Estimate. With the new Loan Estimate (LE) and Closing Disclosure (CD), over 90 percent of consumers were able to easily identify their rate, APR and monthly payment – great news for consumers.
The new disclosures (LE and CD), are nearly identical which helps consumers identify costs and fees both at the beginning and end of their transaction. The LE, replaces the GFE and TIL which is typically given to the applicant in the early stages of the process. The CD, replaces the HUD-1 and is given three days prior to closing; this gives the borrower final numbers well in advance of closing.
With the replacement of three key mortgage disclosures (GFE, TIL and HUD-1), the Know Before You Owe initiative offers greater transparency as well as a better understanding of costs, fees and details of the transaction.
How does TRID impact the closing process? Will it take longer to close loans?
There has been some concern over the impact TRID will have on closing times, and while lenders will need to adjust internal timing, it should not add time to the process. As a matter of fact, since the TRID implementation, Guaranteed Rate has continued to close loans in under 30 days.
Additionally, agents and consumers may find the process to be more structured as there are two areas of the loan process where TRID has implemented timing requirements:
- Loan Estimate (LE): This disclosure must be received by the consumer, or placed in the mail, no less than seven business days before consummation of the transaction.
- Closing Disclosure (CD): This disclosure must be received by the consumer no later than three business days prior to the closing (consummation).
Innovative digital technology has allowed us to implement a significant regulatory change with relative ease and no negative impact to our service or speed. The bottom line, more informed and independent consumers will allow you to focus on more revenue generating activities. Embrace the change and get clear on the facts.