October 3, 2015. A date that will live in infamy.
1,800 pages of controversial reform swept over the mortgage transaction process and made real estate agents roll their eyes when thinking about the coming changes.
And now, a year later, the National Association of Realtors (NAR) has polled over 55,000 Realtors (about 4.2% of which responded) asking about their experiences with TRID to see what the effects were – good, bad, and even ugly.
Let’s start with the positive, shall we?
According the NAR President, Tom Salomone, “Consumers now have a clearer picture of their mortgage when they buy a home, and that’s a good thing.”
In keeping with the nickname TRID was given – “Know Before You Owe” – consumers do, in fact, have a better understanding of the home buying process.
However, this seems to be one of the only positive outcomes that TRID has to offer, albeit a big one.
While it’s certainly good that buyers are better aware of what’s going on in terms of their mortgage, the way TRID has affected those on the industry side of things has trickled down to the consumers as well.
Unfortunately, this section will be a bit longer than the last.
While NAR went into more detail than I will here, the bottom line is that Realtors were undoubtedly affected by the landmark ruling, and it comes down to the way it has changed the workflow of real estate pros.
First and foremost, it has required an even deeper level of cooperation between lenders and Realtors.
At the same time, though, the communication between the two groups seems to have decreased.
One survey respondent even commented that the lack of communication “feels like a push to keep [Realtors] out of the process.”
Further complicating things, real estate pros are also now having trouble accessing the Closing Disclosure (CD) from lenders.
While lenders are citing reluctance to share such private information with third parties, Realtors are finding themselves left in the lurch and are now turning to title agents to provide the CD.
The problem with this approach, however, is that many title agents are wary of jeopardizing their relationships with local lenders, and are therefore also denying the CD to agents.
Issues with obtaining the CD are leading to errors that Realtors say could have been prevented if they had access to information they needed.
In fact, the amount of Realtors reporting errors rose from 43 percent in the fourth quarter of 2015 to 50 percent in the third quarter of this year.
Because of the way TRID has slowed down the transaction process for Realtors, they’ve had to make significant adjustments in order to meet disclosure deadlines on time.
From sharing contracts and amendments sooner with lenders, title insurers, and closing agents, to adjusting purchase agreements and performing inspections earlier, Realtors have nearly doubled the time and effort they spend per transaction.
In Q3 of 2015, they worked about 43 hours per transaction. Now, it’s more like 80.
In addition to this, direct expenditures on things like marketing, salaries, postage, and notary fees have also increased about $154 per transaction.
Overall, Realtors are finding that TRID has made the settlement process more difficult than it was in years past.
“I worked 23 years building strong relationships, and this new TRID experience has removed me from a lot of the process, making me feel my relationships are suffering as a result,” said one respondent. “The real estate industry, on the whole, is suffering from external influences, and the client is ultimately the one who loses that great service.”
What do you have to say about TRID and its consequences? Let us know in the comments below!
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