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The TILA-RESPA Integrated Disclosure (TRID) rule was created to provide homebuyers protection, and allow them increased control of the home buying process. From consolidating four mortgage forms into two to mandating that homebuyers receive the Closing Disclosure at least three business days before finalizing their mortgage, TRID established regulations to assist buyers in understanding all aspects of their home purchase.
Introduced on October 3, 2015, compliance with TRID was not simple; the Consumer Financial Protection Bureau (CFPB) announced a compliance grace period, lenders were provided temporary legal protection and implementation was even postponed twice until the rule’s official launch.
Now, a year after TRID, we look back and examine its successes and shortcomings. How has one of the most pioneering rules in housing ecosystem history truly made its mark?
The National Association of Realtors (NAR) recently released TRID: A Year Later, a survey polling 55,490 realtors on the effects of the rule.
- Delayed transactions fell from 10.4 percent to 8.5 percent, but cancelations edged up slightly from 0.6 percent to 0.7 percent
- 6 percent of respondents had problems getting closing disclosures down from 54.5 percent
- However, realtors were more likely to request closing disclosures from title agents than lenders in the 3rd quarter, especially realtors with greater transactions volume
- 7 percent of respondents said the new settlement process under TRID is more difficult
- Delayed and canceled transactions cost consumers $410 and $226 on average, respectively. Rental and deposit expenses as well as lost vacation time accounted for most expenses
Views on TRID are still polarized, seen in these respondent statements:
- “My clients often got screwed by their lenders before TRID. They paid outrageous loan fees. This has dropped significantly.”
- “I worked 23 years building strong relationships and this new TRID experience has removed me from a lot of the process making me feel my relationships are suffering as a result. The real estate industry, on whole, is suffering from external influences and the client is ultimately the one who loses that great service.”
TRID still isn’t running like a well-oiled machine, but significant parts of the process have improved. Delayed transactions are down almost two percent, saving buyers money, and the amount of realtors experiencing difficulty obtaining closing disclosures has dropped nine percentage points.
The rule must continue improving. Realtors and lenders need to truly implement the new processes in order to ensure the consumer benefits, both parties must do their part. It’s unacceptable that almost half of survey participants have trouble obtaining closing disclosures.
Homebuyers can do their part by educating and preparing themselves for the home buying process. Additionally, buyers can submit comments to the CFPB on the lending process; the survey reveals that only 3.3 percent of client’s provided comments, while 47.6 percent did not and 49.2 percent weren’t aware that they could.
To view the full survey, please, click here.