Just how disruptive have the Consumer Financial Protection Bureau’s (CFPB) new TILA-RESPA Integrated Disclosure (TRID) rules been for mortgage bankers so far?
In a survey of 548 mortgage bankers conducted in February by the American Bankers Association (ABA), about 75% say they are witnessing delayed closings directly as a result of the new rule.
On average, lenders are seeing delays of about eight days; however, responses ranged from one to 20 days. More than 90% of respondents say loan onboarding and processing times have increased.
About 25% report that they have eliminated certain mortgage products because the rule does not provide enough clarity. Some of the offerings eliminated include construction loans, adjustable-rate mortgages, home equity loans or payment frequency options, the survey reveals.
“It’s clear from this survey and our discussions with bankers that TRID compliance remains a significant concern,” says Bob Davis, executive vice president of mortgage markets, financial management and public policy for the ABA, in a statement. “Consumers are seeing the greatest impact due to increased loan costs, fewer choices and delayed closings – and that’s not what this rule was intended to do.”
And what of the “good faith” grace period for enforcement that the CFPB promised? About 94% of respondents say the grace period should be extended, even though the bureau never set an official date for when the grace period ends.
“As we anticipated, our bankers are struggling to comply, in part, because the systems being provided by vendors are incomplete or inaccurate,” Davis explains. “The causes of many of these systems’ problems are ambiguities in the TRID rule that require resolution.”
The survey reveals that mortgage technology vendors continue to struggle with TRID, as well. About 78% of respondents report that they are still waiting for system updates from their vendors – and 83% say they have no choice but to use manual workarounds. About half of survey participants say that their company has either already hired additional staff to comply with the new rule or they will be hiring soon.
To access the complete survey results, click here.