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TRID (TILA-RESPA Integrated Disclosure) is a federal regulation that combines the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) requirements into a single set of integrated disclosure forms. TRID requires lenders to provide borrowers with specific loan disclosures within 3 business days of receiving a loan application.

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What is TRID?

TRID was implemented in 2015 to simplify and standardize mortgage disclosures. It requires lenders to provide two key disclosure forms:
  1. Loan Estimate (LE) - Provided within 3 business days of application, showing estimated loan terms, costs, and payments
  2. Closing Disclosure (CD) - Provided at least 3 business days before closing, showing the final loan terms and costs
These disclosures must be provided when a loan application is received, which is defined as when the lender has received six specific pieces of information from the borrower.

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When TRID is triggered

TRID is triggered when a lender receives a complete loan application, which is defined as having all six required pieces of information:
  1. Borrower’s name
  2. Borrower’s income
  3. Borrower’s social security number (for credit report)
  4. Property address
  5. Estimated property value
  6. Mortgage loan amount sought
Once these six pieces of information are collected, the lender has 3 business days to provide the Loan Estimate to the borrower.

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Implications of TRID being triggered

When TRID is triggered, several important requirements take effect:

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Timing requirements

  • Loan Estimate must be provided within 3 business days of receiving the complete application
  • Closing Disclosure must be provided at least 3 business days before closing
  • If loan terms change significantly, a revised Loan Estimate may be required, restarting the 3-day clock

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Lock-in of fees and tolerance cures

Once the Loan Estimate is provided, certain fees are “locked in” and cannot increase beyond specified tolerances:
  • Zero tolerance fees - Cannot increase at all (e.g., lender fees, credit report fees)
  • 10% tolerance fees - Can increase up to 10% (e.g., recording fees, third-party services)
  • Unlimited tolerance fees - Can increase without limit (e.g., prepaid items like property taxes, insurance)
If fees exceed their tolerance limits, a tolerance cure is required. This means the lender must pay the difference between the disclosed amount and the actual amount to bring the fees back within tolerance. Pylon’s responsibility: Pylon is responsible for all tolerance cures and represents and warrants all files. This means Pylon bears the financial risk if fees exceed tolerance limits, ensuring lenders are protected from tolerance violations.

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Impact on loan process

When TRID is triggered, it significantly impacts the loan process:
  • More redisclosures - Changes to loan terms, rates, or loan amounts often require revised Loan Estimates, which can delay the loan process and add administrative overhead
  • Additional waiting periods - Revised disclosures may restart timing requirements, extending the time to close
  • Reduced flexibility - Once disclosures are issued, making changes becomes more complex and time-consuming
  • Closing Disclosure timing - The Closing Disclosure must be provided at least 3 business days before closing, which must be factored into closing timelines

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Pylon’s competitive advantage

Pylon’s approach to TRID provides a significant competitive advantage over traditional Loan Origination Systems (LOS).

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Traditional LOS approach

Most LOS platforms trigger TRID early in the process because they allow lenders to price and commit to very specific loan terms immediately. Once a specific loan amount, rate, and product are selected, the six pieces of information are considered “selected” and TRID is triggered.

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Pylon’s approach

Pylon delays TRID triggering by design:
  1. No specific loan pricing - Pylon doesn’t allow you to price a very specific loan upfront. Instead, products and pricing provide an array of loan amounts per rate for all products.
  2. Flexible product exploration - Borrowers and loan officers can explore multiple product options, rates, and loan amounts without triggering TRID.
  3. TRID triggers only when committed - TRID is not triggered until you:
    • Attach a Product Structure to the loan, or
    • Click “Apply Structure” in the UI
Until one of these actions occurs, the six pieces of information have not been definitively selected, and TRID is not triggered.

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Benefits of delayed TRID triggering

  • More time for exploration - Loan officers can work with borrowers to find the best loan structure without triggering disclosure requirements
  • Reduced redisclosures - By delaying TRID until commitment, Pylon minimizes the need for revised Loan Estimates, reducing delays and administrative overhead
  • Better borrower experience - Borrowers can explore options without triggering formal disclosure requirements
  • Operational efficiency - Less time spent on disclosure management, revisions, and tolerance cure handling
  • Reduced tolerance cure risk - Fewer disclosures mean fewer opportunities for tolerance violations, reducing the risk of cure payments