What is the TRID rule?

The TRID rule, which stands for TILA-RESPA Integrated Disclosure, is a regulation that requires lenders to provide specific disclosures to borrowers regarding the terms and costs of their mortgage loans. This rule was implemented to simplify and clarify the lending process for consumers, combining information from the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) into a more straightforward format.

Under the TRID rule, lenders must provide two primary disclosures: the Loan Estimate and the Closing Disclosure. The Loan Estimate must be delivered to the borrower within three business days of their loan application, detailing the loan terms, projected payments, and closing costs. The Closing Disclosure must be provided at least three business days before the borrower closes on the loan, outlining the final terms and costs of the mortgage. This ensures that borrowers have a clear understanding of their financial obligations and assists them in making informed decisions about their home financing.

The other choices relate to different aspects of real estate and lending practices but do not accurately describe TRID's focus on disclosure and consumer protection.