TRID Privacy Rule Causing Issues at Closing Table  


small model house on top of real estate contract

Photo credit: Mark Moz



More than half of surveyed agents reported difficulties, but there are workarounds

One of the reasons home buyers choose to work with real estate professionals is because they are trained to see errors in the closing documents, potentially saving them time and money. With TRID’s October implementation, the ability of the real estate agent to scrutinize final closing documents, traditionally a service they provided, is being threatened by recent changes to the real estate settlement procedures.

TRID mandates that lenders not provide a copy of the Closing Disclosure form to real estate agents representing home buyers. This is due to the “non-public” nature of the Closing Disclosure form, frequently citing federal consumer privacy regulations built within the rule.

Sometimes many miles can separate closing agents and lenders, this distance may result in the Closing Disclosure having a few errors because of the lender not being knowledgeable of local transfer fees and real estate tax practices and other charges.

A recent internal National Association of REALTORs (NAR) survey found that 54.5 percent of agents reported they had difficulties getting the Closing Disclosure form. Half of the surveyed agents found errors such as incorrect commission splits, taxes, fee charges, and failure to include seller concessions when they were able to review the form. With each correction and re-issue, the mandatory three-day waiting period is triggered, causing delays for the purchaser and even sale cancellations.

Some real estate agents would attempt to get the Closing Disclosure from the title or settlement agent, where they find hesitation because of the privacy rules. Some lenders also prohibit title or settlement agents from sharing the Closing Disclosure with real estate agents. Title agents have started using workaround solutions which provide the real estate agent needed information, including a customizable “settlement statement” from the American Land Title Association (ALTA) that itemizes all of the fees and charges that buyers and sellers are required to pay during the settlement process. This document does not include personal information and therefore do not violate privacy rules, but allows agents to advise their clients and report transactional data to the local MLS.

There have been other responses to the TRID Closing Disclosure rule, one being revising the contract used by REALTORs.

Gloria Williams, managing broker at PEMCO Realty’s Atlanta office said, “In the state of Georgia, the 2016 Georgia Association of REALTORs (GAR) contract was revised to address this issue.  The new GAR Purchase and Sale Agreement contains verbiage giving permission to the closing attorney to share the ALTA Estimated Closing Statement.”  Williams says, “Ultimately, it is up to the borrower to allow the information to be released to their REALTOR.  The REALTOR should have a relationship with their client that will support the release of the non-public information that is contained in the ALTA Estimated Closing Statement.  Many attorneys have included the same closing information for the buyer on a buyer-only or seller-only document that is then shared with the buyer or seller’s agent. The lenders are not purposely “shutting out” the REALTORS, they are simply following TRID Guidelines as mandated by the CFPB.”

Are you a real estate agent having issues with this part of TRID?

Are you a lender that makes it easy for the real estate agent at closing?



Miami Herald. Lenders blocking realty agents from buyers’ closing documents




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