Which of the following transactions is not covered under TRID?

The Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) integrated disclosures (collectively known as TRID) were established to provide transparency in the mortgage lending process. Certain types of transactions are exempt from TRID regulations.

Reverse mortgages are unique financial products aimed at seniors that allow them to convert part of their home equity into cash without having to sell their home or make monthly mortgage payments. Due to their specific purpose and the target demographic, reverse mortgages are not covered under the TRID rules. This exemption is in place because the nature of reverse mortgages differs significantly from traditional residential mortgage loans, which adhere to TRID requirements.

In contrast, transactions like construction loans, vacant land loans, and closed-end transactions typically do fall under TRID regulations, as they involve conventional lending practices that align more closely with the consumer protections TRID aims to uphold. Understanding these distinctions is important for mortgage professionals to ensure compliance and provide accurate information to clients.