New disclosure rule doesn’t apply to father
Question: My father owns his Glendale home free and clear. He is moving next month to go back to Illinois to live with his first wife. My father is going to sell the home to me, and I will make payments to him at 6 percent interest for the next 10 years. My understanding is that there is a new law that requires my father as a mortgage lender to make all types of disclosures of this loan to me. What are those disclosures? Does my father have to make those disclosures to me?
Answer: You are talking about the TRID rules that went into effect Oct. 3, 2015. TRID stands for “TILA-RESPA Integrated Disclosure.” In other words, TRID attempts to integrate in one Closing Disclosure form the disclosure requirements of the Truth-in-Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). These TRID rules require in the Closing Disclosure form significant disclosures by a mortgage lender to the borrower relating to the costs of the mortgage loan. These TRID rules, however, do not apply to a one-time seller-carryback financing transaction between family members. Therefore, your father does not need to furnish you with the Closing Disclosure form required by the TRID rules.