On Oct. 1, 2015, a long-anticipated change to the mortgage process took place: TRID is also known as the TILA-RESPA Integrated Disclosure Rule, (the Truth in Lending Act and RESPA is the Real Estate Settlement Procedures Act), was created and was aimed toward making mortgages more transparent and easier to understand for consumers.
According to NAR’s Economist Outlook blog, the TRID made “modest improvement” during the month of March but that’s a stretch by anyone’s logic: “The average time-to-close as measured in days fell from 43.3 in January to 39.9 in February. The February year-over-year increase under TRID was a decline from the 5.2 additional days in January and the 5.7 day peak registered in December.”
Easier for Everyone
AmeriFirst explains that TRID has streamlined the mortgage process: “Consumer disclosures are much easier to read and the Loan Estimate forms clearly set forth the terms of the proposed transaction to help the borrower determine whether they would like to proceed with the transaction.”
Consumers are also given their Closing Disclosure early. TRID stipulates that before closing on a home purchase or refinance, consumers must receive a copy of their Closing Disclosure at least 3 business days prior to closing so if they have questions, their Loan Originator can provide them with additional information. The format of the Closing Disclosure will also mirror the Loan Estimate to make comparison easy.
Furthermore, the TRID rules applied only to loan apps received after October 1st, and the timing is a point of burden, as if only 10 percent of transactions experience closing issues due to TRID changes, NAR notes that means as many as 40,000 transactions per month.
Watch Your Step
Since TRID came to pass you better believe lenders are being extra careful and hesitant while providing mortgages so as not to be out of compliance with the new rules. The forecast in October was that changes to TRID would most likely translate to longer timelines to get a mortgage and delayed closing dates.
But the reality is that the system seems to be catching up itself and finally benefitting the people that help the most: the home buyer.