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Real estate agents are complaining that with the new TRID rules, lenders now refuse to provide them with a copy of the Closing Disclosure for review prior to closing (CD Block). Strange, I don’t recall lenders providing Realtors with a draft copy of the HUD-1 prior to the closing before the new rules were implemented.
Once again, TRID gets the blame for a procedural issue. Prior to TRID, a consumer (not the Realtor) was entitled to receive a copy of the projected HUD-1 one day prior to the closing. In most cases, the closing agent tried to provide this copy.
In many cases, a lender’s settlement package didn’t arrive at the closing agent until the day before the closing. This was a common complaint of most closing agents. Maybe the closing agent shared the copy of the projected HUD-1 with the Realtor prior to the closing
Prior to TRID, any review was done by the closing agent at the closing table. Now, all of a sudden, with the new rules and the lender fully responsible for the issuance of the Closing Disclosure, and its content, everyone is concerned about getting a copy prior to the closing. Their interest is to identify potential problems, avoid delays in closing and protect the consumer. Maybe…
There is nothing new about problems arising at the closing table or about things that may delay a closing. In the past, the closing agent had to deal with these problems at the table and find the ways to somehow make them work. No one wanted a delay.
But now things are a little different. Closing agents cannot make the changes at the table without the lender’s knowledge and consent. Certain changes may trigger a new 3-day waiting period. That is devastating to all parties. So now everyone wants to get a good look at the CD, BEFORE they get to the table. Maybe the CFPB did a good thing.
There may, or may not be, privacy issues with releasing the CD to the Realtor prior to the closing. Especially when the Realtor is representing the Seller, and not the Buyer, as is the case in many transactions.
To alleviate the problem a Realtor has two options: 1) have the buyer sign a release along with the Sales Agreement allowing the lender and closing agent to release a copy of the initial, any revised and final Closing Disclosures to the Realtor, when issued, or, 2) instruct the Buyer to provide copies of these disclosures to the Realtor immediately upon receipt.
Either way, the lender and closing agent are relieved of this responsibility, and of any potential privacy issue violations which may result. No, it’s not how things were done in the past but then again the whole process has changed.
BTW, lenders may consider having the buyer sign such a release, along with any other privacy disclosures, giving them the authorization to provide the copies of the CDs to the Realtor(s) involved in their transaction.
For every problem, there is a solution. You just need to be willing to work toward finding it.
The game has changed. Play different.
