It’s been around for years now, but how many times are you still seeing your lender failing to take notice at the onset of what constitutes a TRID loan?

TRID constitutes a closed end loan primarily for personal or household use secured by real property regardless of the lien position (no dwelling is required as collateral). This includes trusts as borrowers, construction only loans (lot loan, land parcels of 25 or more acres). Exemptions include business purpose loans, rentals (where owners do not occupy greater than 14 days per year), reverse mortgages and HELOCs. Even if the collateral is commercial real property, if primarily consumer purpose, TRID applies.

For a TRID loan, property is the address of the property securing the loan, not purchased (if different). TRID purpose can be tricky. Purchase relates to acquisition of property. Refinance is used to refinance an existing obligation secured by the identified property. Construction will finance the initial/new construction of a dwelling on the property securing the loan. Home Equity is used for any purpose not listed as purchase, refinance, or construction. A TRID discussion could go on and on; however, identification and classification are key concepts out of the gate to ensure the TRID documentation/disclosure process.

Remember, for example, if a closed end loan recurred by real property is erroneously treated as commercial when the loan was in fact consumer, the APR effectively becomes the interest rate and a no fee loan has been created.

TRID identification and classification is key.