It’s been more than six months since the Consumer Financial Protection Bureau’s (CFPB) TILA-RESPA Integrated Disclosure (TRID) went into effect, with the main goal of simplifying the home closing process for consumers. The provisions, known as “Know Before You Owe,” stem from the Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed into law in 2010.
TRID consolidated four existing disclosures into two forms: A Loan Estimate that must be delivered or placed in the mail no later than the third business day after receiving the consumer’s application, and a Closing Disclosure that must be provided to the consumer at least three business days prior to consummation, according to the CFPB.
Since there are a lot of moving parts when closing on a home and plenty of new information for industry professionals to learn, let’s chat about our initial impressions on how the regulations are going thus far.
We were prepared for a tremendous undertaking when the regulations were first announced. So far our team has adjusted well, although the first couple weeks it felt like “we were moving in slow motion” when getting an escrow closed.
It hasn’t been as cataclysmic as many would have wanted you to believe it was going to be.
Our team was in favor of simplifying the process since disclosures can be confusing and has massive liabilities for lenders and closing agents, but after the first few months, I’m not certain that’s happening. We’re not sure that it has actually improved the process for the consumer; it certainly hasn’t improved the process for purposes of clarity in compliance and efficiency. In that sense the final regulations have been disappointing.
Several of our mortgage providers and bankers are struggling to comply, in part, because the systems being provided by vendors are incomplete. As industry professionals become more accustomed to TRID, the process will get faster. As we get to know the regulations better, once the CFPB clarifies certain areas that are still extremely hazy, once all the lenders are on the same page for compliance, and once we can create new flows…I think we’ll be able to improve on the speed towards closing our escrow transactions.