On October 3rd 2015, history was made in the mortgage industry when the TRID Rule, or the “Know Before You Owe” Rule was implemented in the United States. TRID was created in order to bridge the gap of transparency between borrowers, regulators, and lenders through more consumer-friendly documents and additional time restraints in the lending process with the hope of creating a more informed, and therefore better protected consumer. In the two years leading up to the implementation of TRID, those in the lending industry feared that additional paperwork and time would deter potential buyers. Once TRID was implemented, there were a few hiccups in the road, but the mortgage industry has been changed forever.
With a year of the implementation of TRID officially under America’s belt, we want to take a look back on the up’s, down’s, and still-to-come’s.
THE TRID TRAIN, A TIMELINE:
November 2013: TRID unveiled to the lending industry with the proposed roll-out date to take place August 1st 2015. Cue industry-wide panic attacks due to the copious amounts of work they will have to do in order to adhere to the new rule (think technology and work process overhauls).
November 2013- June 2015: Everyone freaks out about the implementation of TRID, concurrent with an “administrative error” prompting the CFPB to change the start date to October 1st, 2015.
June 24th 2015- A proposed amendment to TRID is released where the official start date of the “Know Before You Owe” rule will be October 3, 2015.
October 3, 2015- TRID goes into effect, and companies are mandated to comply. Many express concern and complaints that the CFPB is vague in some sections of TRID and the lack of guidance offered in the following months.
January 2016- Ellie Mae’s Origination Insight Report shows that total time to close has reached a high of 51 days, an indicator that the 6 days added in the process were being added to the total time instead of integrated in. Lending companies continue to complain about vagueness and lack of education from the CFPB regarding TRID.
July, 2016- The CFPB responds to concerns by lending companies and other businesses impacted by TRID and put some new changes into place regarding the secondary market to better help and inform lenders. The proposed changes include: tolerances for the total of payments, expanding the number of housing assistance loans that would qualify for exemptions, including cooperatives in the rule, and clarifying how a creditor could provide separate disclosure forms to the consumer and the seller.
August 2016- NAR surveyed 2,500 REALTORS to get their perspective of how the TRID rule was working which revealed that the majority saw no changes through the implementation of the rule.
TRID IN 2017
While there were a few up’s, down’s, and hiccups in the past year for the lending industry (as expected with any major industry overhaul), it is apparent that TRID has been a mostly beneficial and much needed industry update for the consumer. As Pete Mills from the Mortgage Bankers Association stated, “TRID was a massive undertaking from a systems and business processes standpoint,” Although many anticipated the rule would significantly disrupt the closing process for consumers, the impact of TRID on consumers was mitigated because lenders and other participants in the closing process dutifully prepared for the final rule.”
Many lending companies are still making adjustments in their strategy with the implementation of the new rules, but with a year of adhering to TRID under their belt, lending companies are now analyzing ways to better streamline processes and resources to better serve their clients and integrate the additional 6 days in the process instead of adding them. Ready to own the house of your dreams? We’re here to help you from the beginning steps of your planning period all the way until you step through the doors of your new home. Contact us today at Alpha Mortgage!