While most everyone knew TRID regulations would result in delays, not many expected those delays to be so sweeping. The results of a study [1] released Wednesday by Washington, D.C.-based Callahan & Associates [2] found that a whopping 96 percent of the 200-plus credit union executives the company surveyed across 46 states reported closing delays related to TRID over the past six months.
Callahan found a variety of reasons at the heart of the delays. Half cited new lender workflow between title companies and members, as well as refinement of processes of procedures as the primary cause of closing delays. A quarter cited compliance issues related to settlement, systems, members, and mortgage disclosure. Sixteen percent said that their own mortgage loan origination and core processing systems were not fully equipped to handle necessary updates, while 6 percent said their members were unable to provide documentation and other information in a timely manner.
Additionally, open-ended survey responses noted timing issues with disclosures, difficulties integrating mortgage origination systems with core processors, and challenges with title companies, realtors, and other settlement agents, Callahan stated.
All told, more than half of the respondents said new TRID regulations have added five or more days to mortgage closing, while the average number of days to close, according to respondents is 42. The industry’s ideal average closing goal is 31 days.
Despite the delays, the vast majority of respondents said closing issues were generally easy to handle. Nearly 80 percent said they are able to deliver disclosures quickly, with 20 percent saying they deliver three days before the mortgage closing, the absolute deadline for delivering disclosures.
For most credit unions, the portfolio and secondary markets are significant origination factors, Callahan found. Eighty-three percent of respondents, in fact, said they originate loans to hold in their portfolio. But more two-thirds also actively originate for sale to the GSEs. A minority of respondents — 11.3 percent — said they solely originate for sales to GSEs.