Survey: 96% Of Credit Union Execs Say TRID Has Delayed Closings

Posted by Patrick Barnard on April 07, 2016 No Comments
Categories : Residential Mortgage

In a recent survey of more than 200 credit union executives, 96.1% say the Consumer Financial Protection Bureau’s new TILA-RESPA Integrated Disclosure (TRID) rules are resulting in closing delays.

Many of the respondents report that during the past six months, the average number of days to close has increased to 42 compared with the average of 31 days.

More than half of respondents reported TRID added five or more days to mortgage closing.

Only 3.9% say the rules have not resulted in any closing delays.

The survey conducted by Callahan & Associates breaks down the various ways that closings are being delayed. For example, 51.5% of respondents say new lender workflow between title companies and members, as well as refinement of processes of procedures, is the primary cause of closing delays.

About 26.2% say compliance (settlement, system, members and mortgage disclosure) is the primary cause for closing delays.

About 16.2% report that the inability of their mortgage loan origination and core processing systems to handle necessary updates is the primary cause for closing delays.

About 6.1% say the inability of members to provide documentation and other information in a timely manner is the primary cause of closing delays.

The survey also included an open-ended section where credit union executives noted timing issues with disclosures; difficulties integrating mortgage origination systems with core processors; and challenges with title companies, Realtors and other settlement agents.

About 79.6% of respondents say they are able to deliver the new disclosures quickly without issue. About 20.4% say they deliver the closing disclosure exactly three days before the mortgage closing – the absolute deadline for delivery.

A major concern for credit unions and all lenders is whether loans with TRID defects will see a high rate of refusal on the secondary market. Although about 83.3% of credit union execs say they originate loans to hold in portfolio, about 66.9% say they also actively originate for sale to the government-sponsored enterprises (GSEs). Only 11.3% say they solely originate for sales to GSEs.

To access the full survey results, click here.

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