Takeaways:
- Most Realtors are aware of the mortgage closing changes and working with industry partners to smooth the transition.
- 75 percent of Realtors are confident their title company partners are prepared for TRID; 65 percent are confident in their lender partners.
- The vast majority of survey respondents have taken a class or webinar to learn about TRID.
The federal TILA-RESPA Integrated Disclosures (TRID) rule takes effect next month and Realtors are ready.
That’s according to a recent survey by the 1 million-member National Association of Realtors.
Thanks in large part to educational efforts led by title insurance companies, Realtors feel like they are in a good place to handle the sweeping changes coming to the mortgage closing process next month, the survey report said.
NAR polled about 1,400 randomly selected members in August about their preparedness for TRID — around the same time that the rule was originally set to take place. The Consumer Financial Protection Bureau ultimately decided to delay the implementation deadline from Aug. 1 to Oct. 3.
The CFPB released the complex, 1,800-page regulation in November 2013, giving the affected industries nearly two years to retool their mortgage loan processing systems and train their staffs to comply with the new disclosure forms and changes.
In that time, the bulk of the training and education efforts have been led by the title insurance industry — and those efforts have not gone unnoticed by NAR’s members, according to the survey.
More than three quarters, or 75.1 percent, of the survey’s respondents indicated they have a high degree of confidence in the preparation efforts of title companies.
That figure fell to 65.1 percent for lenders, upon whom the CFPB has bestowed ultimate compliance responsibility for all closing table parties.
With less than a month to go before TRID takes effect, it will relieve many to know that the survey found most Realtors are aware of the changes and taking actions and working with industry partners to smooth the transition.
Since the beginning of the year, rumors have swirled that many leading loan processing software providers’ systems will not be ready and tested to handle the new disclosure forms, and the busy summer selling season has kept many professionals from devoting time to learning about the new process.
NAR’s survey tells a different story, however. According to the association, about 82 percent of respondents have taken some form of webinar or class.
More than a third of those training sessions took place at broker- or firm-sponsored events; nearly 27 percent were hosted by local or state associations; about 25 percent were hosted by affiliated title companies or lenders; and around 20 percent were hosted by nonaffiliated title companies or lenders.
Many respondents are already anticipating that closings will take longer to complete, according to the survey. More than half, or nearly 56 percent, said they plan to change their purchase agreements to reflect longer timelines, while 31.2 percent said they will add contingencies to their contracts.
Plans are also in place with lenders and title companies to help smooth the process, according to 37 percent of respondents, and another 25 percent said they plan to perform final inspections earlier or will provide contracts and amendments to lenders earlier than they usually do.
NAR noted that, historically, delayed or terminated closings are not very common. In the last year, 9.1 percent of closings were delayed due to an issue with the lender’s process, and only 1.2 percent of transactions were canceled. When a closing was delayed, only about 6.6 days, on average, were added, the survey’s respondents said.
