One year later, industry learns from TRID

Just over a year ago, on Oct. 3, the controversial rule known as the TILA-RESPA Integrated Disclosure went into effect.

Just over a year ago, on Oct. 3, the controversial rule known as the TILA-RESPA Integrated Disclosure went into effect.


Just over a year ago, on Oct. 3, the controversial rule known as the TILA-RESPA Integrated Disclosure went into effect. Lenders around the country had already spent the previous two years understanding and preparing for the new regulation, which was enacted to provide greater transparency between lenders and their customers. Both before and immediately after TRID went into action, many in the housing finance industry were concerned that the additional paperwork and process improvement would have a negative effect on business. 

"While mostly behind them, lenders are still adjusting to TRID."

As HousingWire reported, however, the ultimate impact one year later has been mixed. According to Pete Mills of the Mortgage Bankers Association, TRID's implementation was a stressful process that ended up causing only minor headaches and ultimately led to good outcomes for the consumer.

"TRID was a massive undertaking from a systems and business processes standpoint," Mills said, according to HousingWire. " Although many anticipated the rule would significantly disrupt the closing process for consumers, the impact of TRID on consumers was mitigated because lenders and other participants in the closing process dutifully prepared for the final rule."

Despite the light at the end of the tunnel, many lenders did express frustration with the Consumer Financial Protection Bureau, the still-new agency that mandated TRID's rollout. HousingWire noted that some lenders felt the CFPB could have done a better job of communicating with loan agents and title companies. Some said several kinks in the new system weren't for​eseen by the CFPB and led to delayed closing times as well as administrative scrambling.

"[Title and closing businesses] have seen a significant increase in the amount of work required to close a financed transaction and have made enormous investments in computer and software upgrades," Dana Ward of Real Estate Closing Solutions told HousingWire. "Transactional challenges remain within the lending industry to accurately disclose to our buyers three days prior to closing. Regardless, our title partners work hard behind the scenes to get these transactions closed on time."

TRID made it more difficult to close home sales in some cases.

Closing data

Some of the issues behind the rollout of TRID could be seen in data from Ellie Mae, whose Origination Insight Report showed average time to closing on a home sale jumped to 51 days in January 2016. By March, this figure fell to 44 days. As of August, the latest month available for the report, the average closing time for all home loans was at 46 days, a figure which has remained steady throughout the summer. August 2016 also saw more than 72 percent of loan applications reach closing, the highest this metric had reached all year and much higher than the rate seen in August 2015, when it was only 66 percent.

More changes coming?

In response to the continued debate surrounding TRID's added burden on lenders, the CFPB issued a series of proposed changes to the rule in July, and began accepting comments on them. The proposed changes included:

  • Tolerances for the "total of payments" disclosure, making it consistent with what this rule entailed prior to TRID implementation.
  • Allowing more housing assistance loans and their lenders to qualify for the partial exemption from disclosure requirements. The CFPB said this change "should encourage lenders to partner with housing finance agencies to make these loans."
  • Extend TRID rules to housing cooperatives.
  • Clarification on how a creditor may provide disclosure information to third parties like sellers and real estate agents.

The comment period for the proposed TRID changes will remain open until Oct. 18, and can be submitted via instructions provided on the Federal Register website. Meanwhile, real estate professionals will continue watching to see how regulatory changes will continue to impact their business.