Banks are still struggling to comply with the Consumer Financial Protection Bureau’s 2015 TILA-RESPA Integrated Disclosure rule, or TRID, according to an American Bankers Association survey results released this week. The survey, conducted in February of this year, found that 25 percent of respondents have eliminated certain mortgage products because the rule does not provide enough clarity. Some of the offerings banks have eliminated include construction loans, adjustable rate mortgages, home equity loans or payment frequency options.
More than 75 percent of survey participants said loan closings are being delayed as a result of TRID. On average, those bankers reported a delay of 8 days with responses ranging from one to 20 days. More than 90 percent said front-boarding and loan processing times have increased.
“It’s clear from this survey and our discussions with bankers that TRID compliance remains a significant concern,” says Bob Davis, ABA executive vice president, mortgage markets, financial management and public policy. “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.”
Ninety-four percent of the 548 bankers who completed the survey believe the TRID “good faith” grace period should be extended.
Bankers aren’t the only industry professionals struggling with the new rule.
“We just went through the TRID changes and that’s caused about a 5-6 day delay in closings,” said Rei Mesa, president & CEO, Berkshire Hathaway HomeServices Florida Realty, during a recent interview with RISMedia. “The industry is working through that; long term, it should be a positive, but in the short term, it’s created some challenges for lenders and title companies. It’s impacting the time it takes to schedule a closing.”
“As we anticipated, our bankers are struggling to comply in part because the systems being provided by vendors are incomplete or inaccurate,” says Davis. “The causes of many of these systems problems are ambiguities in the TRID rule that require resolution.”
The survey found that 78 percent of respondents are still waiting for system updates from their vendors and 83 percent are forced to use manual workarounds. About half of survey participants said their bank will have to or have already hired additional staff to comply with the new rule.
“I can’t say it hasn’t been a hassle, and it did cost us some time and money,” said Rick Haase of Latter & Blum REALTORS in New Orleans in a recent interview with RISMedia. “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 then to buyers and sellers.”
For more information, or to read the full survey report, click here.