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TRID: TILA-RESPA Integrated Disclosure Rules

TRID (TILA-RESPA Integrated Disclosure) is a CFPB rule that consolidated four legacy mortgage disclosure forms into two standardized documents: the Loan Estimate (delivered within three business days of application) and the Closing Disclosure (received at least three business days before closing). TRID establishes tolerance categories that limit how much fees can increase between estimate and closing, requires specific timing for disclosure delivery, and defines what constitutes a mortgage application.

Key Takeaways

  • A mortgage application under TRID is triggered when the lender receives six pieces of information: borrower name, income, Social Security number, property address, estimated property value, and loan amount sought.
  • The Loan Estimate must be delivered within three business days of application and received at least seven business days before closing.
  • The Closing Disclosure must be received by the borrower at least three business days before closing, with certain changes requiring a new three-day waiting period.
  • Zero tolerance fees (lender and affiliate charges) cannot increase from LE to CD without a valid changed circumstance; violations require lender cure through refund.
  • 10% cumulative tolerance applies to recording fees and charges for third-party providers selected from the lender's approved list; the aggregate increase cannot exceed 10%.
  • Changed circumstances allow revised Loan Estimates that reset the tolerance baseline for affected fees only.
  • The Loan Estimate and Closing Disclosure use identical categorization, enabling borrowers to track changes from estimate to final figures.
  • Borrowers may apply to multiple lenders simultaneously to compare Loan Estimates without penalty, and multiple credit inquiries within a shopping window count as one.

How It Works

How the Loan Estimate Process Works

The process begins when a borrower provides the six application data points to a lender. The lender then has three business days to deliver or mail the Loan Estimate. The LE is prepared using the best information reasonably available, which means the lender must make a genuine effort to estimate fees accurately based on the property location, loan program, and known third-party costs. The lender cannot intentionally low-ball estimates to attract borrowers, as tolerance rules create financial consequences for understating fees.

The borrower reviews the LE and may compare it with Loan Estimates from other lenders. Within 10 business days, the borrower must indicate intent to proceed with the lender. Once the borrower indicates intent to proceed, the lender continues processing the loan. If the interest rate was not locked at application, the borrower may lock the rate at a later point, triggering a revised LE that reflects the locked rate and associated costs.

Throughout processing, if changed circumstances arise (such as a flood zone determination, a change in the property being purchased, or an appraisal that comes in materially different from the initial estimate), the lender issues a revised LE within three business days of learning about the change. Each revised LE resets the tolerance baseline for affected fees.

How the Closing Disclosure Process Works

When the loan is approved and ready for closing, the lender (or the settlement agent, depending on the arrangement) prepares the Closing Disclosure with the final loan terms and actual closing costs. The CD must be delivered to the borrower so that it is received at least three business days before the scheduled closing date. If delivered electronically (with the borrower’s consent to electronic delivery), the three-day period begins on the date of delivery. If mailed, the three-day receipt presumption adds three additional days.

The borrower reviews the CD and compares it to the most recent Loan Estimate. The CD includes a built-in comparison table that shows the initial LE amounts, any revisions, and the final amounts. If the borrower identifies discrepancies or has questions, they can raise them with the lender before closing. If a correction to the CD is required after delivery and the correction involves a change that triggers a new three-day waiting period (APR change beyond tolerance, addition of a prepayment penalty, or loan product change), the closing is delayed by three business days from the corrected CD delivery date.

At closing, the borrower signs the final CD along with the other loan documents. The CD serves as both the disclosure and the settlement statement, replacing the legacy HUD-1. Post-closing, if tolerance violations are identified (fees that increased beyond their applicable tolerance category), the lender must cure the violation by refunding the excess to the borrower within 60 calendar days of consummation .

How Tolerance Violations Are Cured

If the final fees on the Closing Disclosure exceed the applicable tolerance limits relative to the most recent Loan Estimate, the lender has a tolerance violation that must be cured. For zero-tolerance fees, any increase (even $1) is a violation. For 10% cumulative tolerance fees, the aggregate increase exceeding 10% of the aggregate estimated amount is a violation. The cure amount is the dollar difference between what the borrower was charged and what the tolerance limit permitted.

The lender cures the violation by refunding the excess amount to the borrower. This can be done at closing (by adjusting the CD to reduce the borrower’s costs) or within 60 calendar days after closing. If the cure is provided after closing, the lender must deliver a corrected CD reflecting the refund. Failure to cure tolerance violations constitutes a TRID violation subject to regulatory enforcement and potential borrower legal claims under TILA and RESPA.

Related topics include qualified mortgage (qm) rules explained, respa explained: real estate settlement procedures act, fair lending laws and equal credit opportunity, mortgage servicing rights and loan transfers, and mortgage regulations: a borrower’s guide.

Key Factors

Factors relevant to TRID: TILA-RESPA Integrated Disclosure Rules
Factor Description Typical Range
Tolerance Category
Timing Requirements
Changed Circumstances
Application Trigger

Examples

Scenario: Borrower discovers fee increase on the Closing Disclosure compared to the Loan Estimate
Outcome: The $300 increase is a tolerance violation. The lender must cure the violation by refunding $300 to the borrower, either at closing (by crediting $300 toward the borrower's closing costs) or within 60 days after closing with a corrected Closing Disclosure. If the lender fails to cure, the violation is subject to regulatory enforcement and the borrower may have a legal claim under TILA.

Scenario: Changed circumstance triggers a revised Loan Estimate
Outcome: The flood zone determination is a valid changed circumstance because it constitutes new information about the transaction that the lender did not have at the time the original LE was issued. The revised LE resets the tolerance baseline for the affected fees (flood determination fee, flood insurance escrow). The tolerance clock starts fresh for those specific charges, and the CD will be compared to the revised LE amounts.

Scenario: Closing delayed due to a Closing Disclosure change requiring a new waiting period
Outcome: The closing cannot occur on Friday as originally scheduled. The new three-business-day waiting period begins when the borrower receives the corrected CD. If the corrected CD is received on Thursday, the earliest closing date is the following Tuesday (counting Friday, Monday, and Tuesday as three business days, assuming none are federal holidays). The delay affects rate lock expiration, contract deadlines, and the seller's plans, making APR accuracy on the initial CD critical.

Scenario: Borrower comparing Loan Estimates from three lenders
Outcome: The standardized LE format allows the borrower to compare the three offers on equal terms. The borrower evaluates total closing costs, interest rate, APR, and the total of payments over the loan term to determine which offer provides the best overall value. The borrower can also compare specific line items to understand why Lender C's closing costs are higher. The borrower indicates intent to proceed with one lender within 10 business days. The multiple credit inquiries within the shopping window are treated as a single inquiry.

Common Mistakes to Avoid

  • Not reviewing the Closing Disclosure before closing day
  • Assuming all fee increases on the Closing Disclosure are permissible
  • Providing incomplete application information to avoid triggering the Loan Estimate
  • Not understanding which changes to the Closing Disclosure trigger a new three-day waiting period
  • Confusing the Loan Estimate with a loan commitment or approval
  • Shopping for a lender based only on the interest rate without comparing total closing costs on the Loan Estimate

Documents You May Need

  • Initial Loan Estimate (three-page form received within three business days of application)
  • Any revised Loan Estimates issued due to changed circumstances, rate lock, or borrower-requested changes
  • Closing Disclosure (five-page form received at least three business days before closing)
  • Any corrected Closing Disclosures issued before or after closing
  • Written list of settlement service providers provided by the lender (for identifying 10% tolerance services)
  • Documentation of changed circumstances that triggered revised Loan Estimates (flood determination, appraisal, etc.)
  • Rate lock confirmation showing the date and terms of the interest rate lock
  • Intent to proceed documentation (verbal or written confirmation from borrower to lender)
  • Tolerance cure refund documentation (if applicable, showing lender reimbursement for tolerance violations)

Frequently Asked Questions

What is TRID?
TRID stands for TILA-RESPA Integrated Disclosure, a CFPB rule that went into effect October 3, 2015. It consolidated four legacy mortgage disclosure forms (Good Faith Estimate, initial Truth in Lending disclosure, HUD-1 Settlement Statement, and final Truth in Lending disclosure) into two new standardized forms: the Loan Estimate (LE) and the Closing Disclosure (CD). TRID establishes timing requirements for when these forms must be delivered and tolerance rules that limit how much fees can change.
When do I receive the Loan Estimate?
The lender must deliver or place in the mail the Loan Estimate within three business days after receiving your application, which under TRID consists of six pieces of information: your name, income, Social Security number, the property address, an estimate of the property value, and the loan amount you are seeking. You must also receive the LE at least seven business days before closing.
When do I receive the Closing Disclosure?
You must receive the Closing Disclosure at least three business days before your closing date. This three-day review period gives you time to compare the final terms and costs to the Loan Estimate before signing loan documents. If the CD is mailed (rather than delivered electronically or in person), the lender must account for a three-business-day mail receipt presumption, effectively mailing it six business days before closing.
What happens if a fee increases from the Loan Estimate to the Closing Disclosure?
It depends on the tolerance category of the fee. Zero-tolerance fees (lender charges, affiliate charges, and services the borrower could not shop for) cannot increase at all without a valid changed circumstance. 10% cumulative tolerance fees (recording fees and services from the lender's approved provider list) can increase, but the aggregate increase cannot exceed 10%. Unlimited tolerance fees (prepaid interest, insurance, escrow deposits, and services from the borrower's own provider) have no cap. Tolerance violations require the lender to refund the excess.
Can closing be delayed because of TRID?
Yes. If the Closing Disclosure is not delivered in time for the borrower to receive it three business days before the scheduled closing, the closing must be postponed. Additionally, if a corrected CD is issued that reflects an APR change beyond tolerance, a prepayment penalty addition, or a loan product change, a new three-business-day waiting period is triggered, further delaying closing.
What is a changed circumstance under TRID?
A changed circumstance is an event that allows the lender to issue a revised Loan Estimate with updated fees. Examples include discovering the property is in a flood zone (new information not available at application), a natural disaster affecting the property, borrower-requested changes to the loan terms, and rate lock events. The lender must issue the revised LE within three business days of learning about the changed circumstance, and only fees affected by the change can be revised.
Does TRID apply to all mortgage loans?
TRID applies to most closed-end consumer mortgage loans, including purchase loans, refinances, and construction-only loans. TRID does not apply to home equity lines of credit (HELOCs), reverse mortgages, mortgages on mobile homes not attached to real property, or loans made by creditors who make five or fewer mortgage loans per year. Business-purpose loans secured by residential property are also generally excluded .
Can I negotiate fees listed on the Loan Estimate?
Yes. The Loan Estimate is not a final contract. You can negotiate with the lender on origination charges, interest rate (including buying discount points or accepting lender credits), and other lender-controlled fees. You can also shop for third-party services (such as title insurance, pest inspection, and surveys) from providers on or off the lender's approved list. Fees from providers you select independently fall into the unlimited tolerance category, meaning the lender is not responsible if those fees change.
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