Steady Improvement as TRID Effects Wane


In November 2013, the Consumer Financial Protection Bureau (CFPB) integrated the Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA) disclosures and regulations,  also known as “TRID” or “Know Before You Owe.”

Any transaction involving a mortgage will use new CFPB disclosure forms. The new TRID rules and forms took effect on October 3, 2015.

Learn more about TRID here.


Lenders appear to be making headway in the TRID environment. With the busy spring market underway, this trend bodes well for the looming surge in seasonal volumes.

The average time-to-close was unchanged from February at 43.3. To adjust for seasonal affects it is best to compare March to March of 2015. Relative to the same time in 2015, the time-to-close was 3.3 days higher reflecting TRID-related delays. However, the February year-over-year increase was 5.2. The decline in days delayed suggests that lenders are adjusting to the TRID regulations and reducing time to close.

time to close

There was a shift in the distribution of closing from February to March as well. The share of closing that took longer than 45 days fell from 45.0 percent to 43.8 percent. Conversely, the share that took less than 30 days slipped from 23.6 percent to 22.3 percent. On net, there was a shift in time to close to the 30 to 45-day range. The decline in closing that took under 30 day and the increase in the middle range repeated the pattern from February to March of 2015 and was likely due to a seasonal increase in closing volume weighing on production resources. However, the decline in closing that took longer than 45 days was unique and suggests a net improvement.

distribution

The March reading of time-to-close was another positive step in the post-TRID environment. Volumes will rise in the weeks and months ahead as the spring market peaks. Partnering with lenders who are collaborative and who have successfully navigated TRID without delays will help to assure smooth settlements in 2016.


Source: Economists Outlook


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Zach@ZachKidd.com

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