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New mortgage rules: A 'Y2K' panic that didn't happen

NEW YORK – Dec. 1, 2015 – Mortgage lenders and real estate agents worried that the new Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule (TRID) that went into effect Oct. 3, 2015, would prolong closings and even delay some home sales.
But that hasn’t been the reality thus far.
“I think it was a Y2K analogy where expectations of the worst happening just weren’t there,” says Mortgage Bankers Association President and CEO David Stevens.
Under the rule, lenders must disclose all final costs and mortgage details at least three days before closing, which required financial institutions to upgrade their software and retrain employees. Despite having more than a year to prepare, lenders worried that they wouldn’t be able to manage last-minute changes to loans under the new rules, resulting in delays that could scuttle sales for buyers selling their current home at the same time.
However, Campbell Surveys Research Director Tom Popik says TRID has only had minor impacts, and National Association of Realtors® Chief Economist Lawrence Yun says, “We are not hearing so much noise.”
The HousingPulse survey by Campbell that tracks the share of on-time closings and total average closing times for all loan types indicated “no clear trend” across loan types.
Stevens believes the new rule could actually be speeding up closings.
“Closings are faster because [borrowers] have read all the forms,” he says. But he also acknowledges that smaller lenders with less sophisticated systems are struggling a bit.
Source: CNBC News (11/23/15) Olick, Diana
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Source: Florida Realtors Feed

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