Three months into TRID: A first assessment
Three months have passed since TRID took effect on October 3, 2015. TRID is an acronym derived from TILA/RESPA Integrated Disclosure and encompasses a set of rules meant to help borrowers better understand the terms of their home financing. For this reason TRID is sometimes simply referred to as the ‘Know Before You Owe’ rule.
Under the new measure borrowers must now be given the new combined Loan Estimate (LE) with all the charges, fees and line items that come with the loan three days before the closing, and no longer at the closing.
The National Association of REALTORS® (NAR) surveyed REALTORS® about how they lived through the first months of implementing TRID. What follows is a selection from the findings. A complete report from NAR can be found on their website.
10% of transactions are delayed
10.4% of transactions were delayed. The typical delay is 8.8 days. Only in 0.6% of the cases in which an issue happened in their process did the lender or settlement agent cancel the closing.
Closing documents have missing concessions
54.5% of respondents indicated problems attaining the closing documents for their transaction. In those cases where access was possible, a majority of real estate agents discovered at least some closing documents that they needed to suggest corrections for prior to closing. The most common error was missing buyer or seller concession (53.3%), a missing agent concession (37.2%) or ‘other’ (35.5%).
Agents work with longer contracts
No less than 56.2% of respondents started working with contracts with a longer time horizon. 31.5% opted to share contracts and amendments sooner with lenders, title insurers and closing agents. 27.7% made a plan with lenders and title agents to smooth transition to TRID.
E-settlements: faster half of the time
25.4% of respondents said that when they worked with e-settlements the process went faster and with fewer issues. 22.1% did not notice any difference and 19.8% did not see any changes in the issues they met, but noted the higher speed of processing.
The jury is still out
With TRID only three months old at this stage, it still may be too early to measure the true impact it is having on real estate agents. One thing is for sure, however, and that is more regulatory hurdles often translate into potential closing delays or more work for real estate agents.