Well, it’s coming Saturday, whether you like it or not.
Oct. 3 marks the effective date of the Consumer Financial Protection Bureau’s Know Before You Owe mortgage disclosure rule, also called the TILA-RESPA Integrated Disclosures rule or TRID.
For years (and especially the last few months), the industry scrambled to prepare itself for TRID and all of its changes.
The new required loan documentation consists of two new forms: the Loan Estimate and the Closing Disclosure to ensure compliance.
These new forms consolidate the TILA-RESPA forms and are meant to give consumers more time to review the total costs of their mortgage. The Loan Estimate is due to consumers three days after they apply for a loan, and the Closing Disclosure is due to them three days before closing.
Despite the industry having even more time than it initially thought to implement TRID, a new article from the Wall Street Journal sheds light on some potential issues that the industry is about to face.
From the Wall St. Journal:
The National Association of Realtors is advising real-estate agents to extend contracts by around 15 days in anticipation of delays in some home closings.
Some changes to the closing terms—such as if a home buyer wanted to change from a fixed-rate mortgage to one with an adjustable rate—cause the three-day period to reset.
Since home transactions often are made together, as home buyers sell their old homes, a delay in one home closing can cause a ripple effect.
The National Association of Realtors has hosted dozens of webinars, conference calls and training sessions with real-estate agents to get them ready for the changes, said NAR President Chris Polychron. “Are there going to be some blips? Yeah. Are there going to be some delays? Absolutely,” Mr. Polychron said.
In the WSJ article, Quicken Loans CEO Bill Emerson said that Quicken has dedicated roughly 350 employees for 17 months to work on TRID, adding that those employees could have worked on other projects in that time, but notes that there’s “no choice” but to comply with the CFPB’s rules.
“Clearly if we weren’t doing that, we’d have folks deployed on other projects, maybe things that would be innovative. But there’s no choice. You have to do it,” said Mr. Emerson, who said Quicken is prepared for the change
