TILA vs. RESPA vs. TRID: Which Law Does What

Federal Mortgage Laws is 24% of the SAFE test, and its favorite trick is jurisdictional: not what the rule says, but which law owns it. TILA and RESPA are two statutes with two different jobs, and TRID is not a third law at all. Sort the three once and a whole class of distractors stops working.

Two Statutes, Two Jobs

TILA (1968) · Regulation Z

The price of credit

Truth in Lending Act. Makes the cost of credit comparable: APR, the finance charge, payment disclosures. Also home to rescission, loan originator compensation limits, HOEPA high-cost rules, and advertising trigger terms.

RESPA (1974) · Regulation X

The settlement process

Real Estate Settlement Procedures Act. Polices the people around the closing: Section 8's kickback ban, affiliated business arrangements, escrow account limits, servicing transfers, and borrower complaint handling.

The sorting question: is this about the cost of the loan, or about the conduct of settlement and servicing? Cost points to TILA. Conduct around the table points to RESPA. That one test sorts nearly every boundary question the exam can write.

Then TRID Merged the Paperwork

Before October 2015, each statute demanded its own disclosures, so borrowers got four overlapping documents. The CFPB integrated them: the TILA-RESPA Integrated Disclosure rule replaced the four forms with the Loan Estimate up front and the Closing Disclosure at the end. The mechanics live in Regulation Z.

The Loan Estimate replaced

Reg Z §1026.19(e)

The early Truth in Lending statement (TILA) and the Good Faith Estimate (RESPA)

The Closing Disclosure replaced

Reg Z §1026.19(f)

The final TIL statement (TILA) and the HUD-1 settlement statement (RESPA)

Loans TRID covers

Most closed-end consumer mortgage loans

Loans left out

HELOCs, reverse mortgages, and mobile-home-only loans keep the older disclosure forms

TRID is a rule, not a statute

Asked what statute TRID is, the answer is neither: it is the rule that integrated the two statutes' disclosures, and it is housed in Regulation Z. Kickbacks stayed in RESPA. Rescission stayed in TILA. Only the forms merged.

The Boundary Questions, Answered in Advance

Who bans kickbacks and referral fees?

12 USC §2607

RESPA, Section 8. Not TILA, and not TRID: the integration did not move it. Penalties run to $10,000 and a year in prison per violation.

Who owns the LE and CD?

Reg Z §1026.19(e)(1)(iii)

The TRID rule in Regulation Z. Cite Reg Z for both forms and both deadlines.

Who grants rescission?

Reg Z §1026.23(a) (HELOCs: §1026.15)

TILA. Until MIDNIGHT of the 3rd SPECIFIC business day after the LATEST of: consummation, delivery of material disclosures, or delivery of the rescission notice.

Who caps escrow cushions?

Reg X §1024.17(c)(1)

RESPA. Maximum cushion = 1/6 of estimated annual disbursements (about 2 months).

Who governs servicing transfers?

Reg X §1024.33(b)

RESPA. Old servicer notifies the borrower at least 15 days BEFORE the effective date of transfer.

Who defines business days?

Reg Z §1026.19(f)(1)(ii)

Regulation Z, both definitions: the general one governs LE delivery, the specific one governs the CD wait and rescission.

The one-line sort

TILA talks money. RESPA polices the table. TRID merged their paperwork and moved nothing else.

Questions People Ask

Is TRID part of TILA or RESPA?

Both and neither. TRID is the CFPB rule that integrated the two statutes' disclosures into the Loan Estimate and Closing Disclosure. Its text lives in Regulation Z, TILA's regulation, which is why exam citations for both forms point at Reg Z.

Which law prohibits kickbacks: TILA or RESPA?

RESPA. Section 8 bans giving or accepting anything of value for a settlement-service referral, with penalties up to $10,000 and one year in prison per violation. TILA has no kickback provision, and TRID did not move this one.

What forms did TRID replace?

Four became two. The early Truth in Lending statement and the Good Faith Estimate became the Loan Estimate; the final TIL and the HUD-1 became the Closing Disclosure. HELOCs and reverse mortgages were left out of TRID and still use the older forms.

Does RESPA or TILA give the right of rescission?

TILA. The three-day right to cancel is a Regulation Z provision covering refinances and home-equity loans on a principal dwelling. It never applies to purchase-money loans, whatever the answer choices imply.

Not sure where you stand? The free 20-question diagnostic scores you by domain.