TRID Update Shows Everything Going Smoothly

Filed under: TRID

The Consumer Financial Protection Bureau’s newly instituted Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) designed to give borrowers a better understanding of their home loans is not nearly causing the potential widespread disruption in the housing market that some experts had predicted, according to a recent article by CNBC.

TRIDMany lenders and real estate agents had warned of possible delays that could have an impact on sales, but so far, that is not the case.

The new rule requires lenders to disclose all final costs and details of a mortgage at least three days prior to closing. The fear, according to writer Diana Olick, was that even after more than a year of preparation time, lenders would be unable to deal with last-minute changes to loans under the new requirements, thus creating delayed closings.

Tom Popik, research director at Campbell Surveys said, “While there was apprehension about TRID, so far impacts are minor.”

Campbell’s HousingPulse survey found “no clear trend” across loan types. The total average closing time including delays for most loan types stayed relatively level or showed only a slight increase between September and October.

Olick said that at this point, TRID is still quite new, but real estate agents are not raising red flags.

Lawrence Yun, chief economist of the National Association of Realtors said, “We are not hearing so much noise.”

And, according to the article, evidence suggests the new rules could actually be expediting closings.

“Closings are faster because they [borrowers] have read all the forms,” said David Stevens, president and CEO of the Mortgage Bankers Association.

Stevens also mentioned that some smaller lenders, who don’t have as sophisticated systems are struggling somewhat, but that is not the vast majority of the market.

The CFPB’s director even implemented an unofficial grace period for lenders to comply, but that may be unnecessary.

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