Since the Consumer Financial Protection Bureau’s (CFPB) new TILA-RESPA Integrated Disclosure (TRID) rules took effect on Oct. 3, 2015, the industry has been preoccupied with how the rules are impacting closing timelines and lenders’ internal operations.
But, so far, very little has been written about the impact the new rules are having on consumers.
ClosingCorp, a provider of residential real estate closing cost data and technology, however, recently conducted a national consumer survey of repeat home buyers that provides insight into how the new rules are impacting the customer experience.
In the survey of about 1,000 repeat home buyers – all of whom had purchased a home both before and after the new TRID rules took effect – about 64% say it was easier getting a mortgage under the old rules than under TRID. About 57% say it took more time under TRID than it did previously.
However, about 63% say the CFPB’s new “Know Before You Owe” forms for loan estimates and closing disclosures were easier to understand than the old forms. About 68% say the new forms did a better job preparing them for the closing costs they would have to pay – and only 6% disagreed.
Similarly, 65% of the respondents say the costs and fees were “explained better” in their most recent experience.
However, about 51% of respondents say there were more “unexpected costs, fees and surprises” in their most recent experience.
Being able to shop for service providers is one of the benefits highlighted in the new TRID forms. About 78% of the consumers said they were informed about this option and, of those, about 74% say they took advantage of it. About 55% say they saved money as a result.
Interestingly, of the consumers not informed that they could shop for different services, 61% were women and 39% were men, raising the question of why female home buyers have a different experience than their male counterparts.
Another interesting tidbit: Although about 57% say it took more time to close under TRID than it did previously, about 70% say that the actual closing of the transaction was faster the second time. About 19% say it was about the same, and only 11% say it was slower. Thus, it is probably more accurate to say that TRID is increasing the number of days to close than it is to say TRID is making closings take longer.
“There’s been a lot of speculation about TRID’s impact and its value to consumers,” says Brian Benson, CEO of ClosingCorp, in a statement. “Our new study of consumers who have bought homes and gotten mortgages both the new and the old way suggests that TRID is making it easier for consumers to understand the costs and fees that they’ll face at closing. But, at the same time, the new rules are adding time and anxiety to the closing process and more than half of the respondents still said they encountered unexpected costs, fees and surprises.
“The findings suggest that our industry has more work to do to get comfortable with the TRID forms and processes and to educate consumers and their advisors,” Benson adds. “Our clients and partners believe technology and integrated data and communications will provide the long-term solution to these challenges.”