Photo credit: Senior Living
Since before TRID’s October 2015 implementation, there’s been a multitude of stories warning about the new rule’s negative effects on the mortgage industry, especially on originations. There were also many stories blasting how the new mortgage rules would add more delays to the closing process. TRID has affected the mortgage business and consumers, but the overall reviews have mostly been mixed. Depending on how prepared lenders and real estate agents were, the rollout was either ‘business as usual’ for some or there were disruptions to the closing process.
For instance, TRID’s federal consumer privacy rules mandate that lenders not provide copies of the Closing Disclosure forms to real estate agents. Title or settlement agents were also prevented by lenders from sharing the form with real estate agents, so title agents started using customizable “settlement statements” from the American land Title Association (ALTA). This form itemizes all of the fees and charges that buyers and sellers are required to pay during the settlement process, sans personal information. Errors were found by agents when they were able to review the form, and fixing the errors, cost the borrower with delays and the agent with cancelled sales.
Borrowers are reviewing their mortgage documents more
ALTA’s most recent survey shows that a significantly larger percentage of borrowers are actually reviewing their mortgage documents before closing than they were pre-TRID. The survey compares closing experience data before and after TRID’s implementation and found that nearly 20 percent more homebuyers are looking over their closing documents after TRID was implemented. This is one of the intentions of the “know before you owe” aspect of TRID.
“Title and settlement agents went to great lengths to prepare and train staff prior to implementation of the regulation,” said Michelle Korsmo, ALTA’s chief executive officer.
“The hard work of these professionals paid off as 92% of surveyed homebuyers are taking time to review their mortgage documents before the closing,” Korsmo continued. “This compares to only 74% of consumers who reported having reviewed their documents prior to the new regulation.”
The survey data also puts to rest earlier predictions about closing delays in a post-TRID world. The survey shows that prior to TRID’s implementation, homebuyers reported that 77 percent of closings happened as scheduled while 74 percent of post-TRID closings took place as scheduled. A recently released Ellie Mae report shows the time to close all loans dropped to an average of 44 days in March, which was the least amount of days to close since March 2015.
Is TRID the monster it was predicted to be?
Resources:
HousingWire. TRID works: More homebuyers actually review mortgage documents
PEMCO Limited. TRID Privacy Rule Causing Issues at Closing Table
TheMReport. Homebuyers Taking a Closer Look at Mortgage Disclosures
PEMCO Limited. Was TRID all Bark, but no Bite?