TRID causing delays, limiting borrower options -- survey

by Ryan Smith02 Mar 2016
The Consumer Financial Protection Bureau’s integrated disclosure rule is limiting borrower options and causing delays at banks, according to a new survey.

The survey was conducted by the American Bankers Association in February. It found that 25% of respondents had eliminated certain mortgage products out of concern that the CFPB’s 2015 TILA-RESPA Integrated Disclosure Rule, or TRID, didn’t provide enough clarity. Some banks have eliminated construction loans, adjustable-rate mortgages and home equity loans, according to the survey.

And more than 75% of respondents said loan closings are being delayed because of TRID. The average delay reported by bankers was eight days, with results ranging up to 20 days.

“It’s clear from this survey and our discussions with bankers that TRID compliance remains a significant concern,” said Bob Davis, ABA executive vice president of 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 bankers surveyed said the TRID good-faith grace period should be extended.

“As we anticipated, our bankers are struggling to comply in part because the systems being provided by vendors are incomplete or inaccurate,” Davis said. “The causes of many of these systems problems are ambiguities in the TRID rule that require resolution.”

It’s not just banks feeling the pressure from TRID, though; other mortgage lenders are also seeing delays. Data from Ellie Mae last month showed that average delays on loan closings were actually getting longer – with the average time to close a loan in January 10 days longer than it was in January of 2015.


Is TILA-RESPA a good or bad thing long term?