Has the new TRID rule impacted your real estate business? Several months after its implication, real estate industry pros gather to discuss what it means for them.
Editor’s note: The Power Broker Roundtable is brought to you by the National Association of REALTORS® and J. Nicholas (Nick) D’Ambrosia, NAR’s Liaison for Large Residential Firms Relations.
Moderator: J. Nicholas (Nick) D’Ambrosia, Liaison for Large Residential Firms Relations, NAR; Broker of Record, The Long & Foster Companies, Chantilly, Va.
Panelists: Jason Waugh, President, CEO, Berkshire Hathaway Home Services Northwest Real Estate, Portland, Ore.; Jeff Barnett, Vice President, Regional Manager, Alain Pinel REALTORS®, Los Gatos, Calif.; Rick Haase, President, Latter & Blum REALTORS®, New Orleans, La.
Nick D’Ambrosia: Remember Y2K? At the stroke of midnight, January 2000, the world held its collective breath, convinced that business and commerce as we knew it would be forever blown to bits by a wily little computer bug. That’s a little like the kind of dread many REALTORS® felt last year when the Consumer Financial Protection Bureau (CFPB) announced changes to the TILA/RESPA Integrated Disclosure (TRID) Rule. New forms … a mountain of paperwork…closings terminally delayed. But TRID is here now, and functioning, and the world didn’t come to an end any more than it did in 2000. So today, three months after the rule implementation, we thought we’d assess the state of things—as measured by a few industry leaders known for their skills and savvy. Jason, why don’t we start with you? Was TRID as difficult as some anticipated?
Jason Waugh: Well, it certainly wasn’t a non-event, but neither do we see the sky falling. The key, I think, was preparation, with our own people and our affiliate partners—making sure we were on the same page in terms of managing the timing and the changes.
Jeff Barnett: I agree. It took a lot of training—and the preparation might have been even tougher if the NATIONAL ASSOCIATION OF REALTORS® (NAR) had not worked with the CFPB to delay implementation from August to October. As it is, we got through our busiest season and our agents had the time to get familiar with the rules and get ready. Frankly, as long as our agents keep track of the timing and document flow, we’re not finding the changes to be onerous.
Rick Haase: I can’t say it hasn’t been a hassle, and it did cost us some time and money. We provided more than 30 classes—different locations, different instructors, online as well as face-to-face—so that agents at every level could prepare, not just on how to comply with the new disclosure rules, but how to explain them to buyers and sellers.
ND: So how are consumers—and agents, for that matter—dealing with the new rules? Is TRID turning out to be a good thing, by and large, or is it just a disruptive nuisance?
JB: In essence, the CFPB’s “Know Before You Owe” program materials are a good thing for borrowers because it helps them better understand the terms of their loan—although many people may not even recognize the difference. At this point, we have not been seeing a problem with delayed closings, although that may change in the next quarter when agents who haven’t fully prepared don’t stay on top of the process. But, if you think about it, the new disclosure rules may even give us the opportunity to add value to our role as client advisors.
RH: The consumer may not see the difference, but we may see some delayed closings until the process becomes routine. The best way to avoid it is to improve communication between the mortgage companies and the agents. If they can learn to work together seamlessly, they should be able to avoid delays.
JW: Are the new procedures worth it? In the long run if it creates a better real estate experience for the customer then, yes, it is worth it. Like everything else, once you adapt to the changes and repeat the process a few times, it will become routine.
ND: What, specifically, can the agent do to help alleviate potential issues?
JB: As partners in the process, agents should advise buyers to provide the necessary documents and make changes to their loan earlier in the closing process—and maybe do the walk-through sooner.
JW: And as Rick mentioned, work closely with the lender to avoid last minute changes to the loan agreement. The three-day review period and the need for a new Closing Disclosure can only be triggered under three pretty specific circumstances. Having close communication—and developing a good relationship with the lender—will go a long way toward avoiding those kinds of problems.
RH: As is almost always the case, it’s the boots on the ground that will really make the difference. Our agents are reporting that they are doing closings with agents who haven’t even heard of the TRID changes. I think it’s safe to say that well-organized agents and brokerage firms will make the transition smoothly—but if you aren’t well-organized, this is going to be a problem for agents and their brokers.
For more information, visit www.realtor.org.