3. Loans Not Covered by TRID Disclosures

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While TRID (TILA-RESPA Integrated Disclosure) rules govern most consumer credit transactions secured by real property, certain loans fall outside their scope. For loans not covered by TRID, creditors must utilize specific disclosure forms to provide borrowers with essential information. Let’s delve into the disclosures used for loans exempt from TRID regulations:

Good Faith Estimate (GFE)

For loans such as reverse mortgages, Home Equity Line of Credit (HELOCs), and mortgages secured by mobile homes or non-attached dwellings, creditors must continue to provide borrowers with a Good Faith Estimate (GFE). The GFE outlines the estimated costs and terms associated with the loan, allowing borrowers to compare offers from different lenders and understand the overall expenses involved.

Truth-In-Lending Disclosure (TIL)

In addition to the GFE, creditors must furnish borrowers with a Truth-In-Lending Disclosure (TIL) for loans not covered by TRID. The TIL provides borrowers with detailed information about the loan’s terms, including the annual percentage rate (APR), finance charges, and total payments over the life of the loan. This disclosure ensures borrowers have a clear understanding of the loan’s costs and obligations.

HUD-1 Form

For certain transactions, such as reverse mortgages and loans secured by mobile homes or non-attached dwellings, creditors must use the HUD-1 form. This form itemizes all charges and fees associated with the loan, including closing costs, prepaid expenses, and loan terms. The HUD-1 form provides borrowers with a comprehensive breakdown of the transaction’s financial aspects, promoting transparency and clarity.

Housing Assistance Loans

Housing assistance loans aimed at low- and moderate-income consumers may be partially exempt from TRID disclosures, with specific rules governing their disclosure requirements. While creditors may not be required to provide Loan Estimate and Closing Disclosure forms for these loans, they must adhere to designated guidelines to ensure borrowers receive adequate information about the loan terms and costs.

Ensuring Borrower Protection

While loans exempt from TRID regulations may not require the same disclosure forms as covered transactions, creditors remain obligated to provide borrowers with transparent and accurate information. These disclosures aim to protect borrowers’ interests by ensuring they have a thorough understanding of the loan terms, costs, and obligations before entering into the transaction.

By utilizing the appropriate disclosure forms for loans not covered by TRID, creditors can uphold transparency and compliance while providing borrowers with the information they need to make informed decisions about their financing options.