We asked for your feedback on TRID based on some conflicting reports and… wow you guys really came through! CLICK HERE to see yesterday’s show.
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Ok, we went from 1 closing statement that some in high positions thought was confusing, to 2 closing statements that are different and just as confusing. On one form you take all the numbers and add up to a total, on the other you add down like before. On 1 form the figures are bunched into subsections, on the other they are not. There are a handful of people out there that were chosen to clear up the mess that has damaged the consumer for years (right), and this is what they came up with. Wow.
The
Reason
I
Drink
And we have a winner!
Nice little jam session there!
Okay back to business. I didn't read the comments from yesterday, but how do we know the delays in closings were caused by TRID and not uninformed Agents writing contracts with no TRID buffer times? Or lenders not completing due diligence and just… gasp… robo-signing prequals?
If I'm trying to be a maverick and still push for 30 day closings and it's "delayed" it's MY fault the clients suffer. Wouldn't it be best to temper the clients expectations up front and say 45 to 60 days out. It's a moving target but we are shooting for this date.
If I'm a lender and I send over a pretty prequal to get this ball rolling… oh yeah Mr. Homeboy Ernest you're golden. And then it comes out in u/w the buyer didn't mention he doesn't escrow $15k a year in taxes on his rental properties (it happened) and the lender didn't catch that up front… guess what… if you are lucky it's only delayed and not a dead deal!
Where it really comes down to is 2 things. Agents writing better contracts and lenders better qualifying these homebuyers. If the Agent sets the time line too quick… FAIL… if the lender misses the mark on prequal…. and major stuff comes out in u/w…. FAIL.
Now I'll go read the comments.
TRID= The Reason I Drink
Following up on my comment from yesterday. This is still new. Delays, conveniently blamed on TRID need to identified. Was the contract written for 30 days or less? Was the client upfront with the details of their current financial situation? Did the client apply for their mortgage within the allotted time frame of the contract? Is the Lender and Title Company up to speed on what they need to do to properly follow the TRID disclosure requirements?
The one thing this new regulation is forcing us to do is ensure there is clear, concise and open communication across the board. Realtors need to set the proper expectations with the client as do the Mortgage Lenders UPFRONT (not 2 days before the expected close date). They should be working together to ensure the client is responding in a timely fashion. When it’s realized that the expected closed date cannot be met (for whatever reason), the lender needs to reach out to the realtor and let them know that the moment they’re aware of it. Not the day before or day of closing. Too many lenders are afraid to let the realtor know there’s an issue because they don’t want to upset their referral source. The truth is many realtors just want to know what’s going on and would rather know sooner than later. The sooner they know, the sooner they can work together with the lender to resolve whatever the issue may be. And in some cases, the client simply has no sense of urgency.
There are and will continue to be a myriad of reasons why closing dates are not met. As an industry, we need to determine the actual cause and not just respond with a knee jerk of “TRID”. That’s the easy way out.
For the record, I do work for a smaller community bank and we’ve closed a number of TRID transactions already. We have yet to miss a single closing date. There is a need for a paradigm shift in the industry on how we think about our work flow and preparation is/was the key to a smooth transition.
TRID, This Really Is Dumb……..or The Reality Is Delay
T – The
R – Reason
I – I
D – Drink
I would like to see the TRID information given to the seller at the time of listing so they have an idea of what will be coming down the road. I think its really important to have all parties to the transaction know what is going on. I don’t want any one in the transaction use the TRID as an excuse not to worry about deadlines. Realtors need to give enough time. Buyers and sellers need to know what to expect .Buyers must be diligent in cooperation with their lender and the lender needs to make sure they tell the buyers what is needed. They need to make sure the appraiser is ordered timely and all items are followed up on. Communication and cooperation are the key – just as it always has been. If everyone does their job TRID or no TRID the timeline should work.
It’s still a little bit of a learning process for some lenders. Some lenders started with one process, but changed in mid-stream. I expect others will do the same in the next month or two. There’s still the challenge as a broker of keeping up with different lender’s processes. Sometimes they disclose the LE, sometimes we disclose the LE, sometimes we disclose the first one and they disclose the subsequent ones, and so on. I think most of this will iron itself out over the next 60 to 90 days.
The thing I don’t like about TRID are the inconsistency of the forms. The appraisal doesn’t show up as a POC item and the Aggregate Credit doesn’t flow over to the LE. Huh? What’s up with that? There are other issues as well. That means none of the LE’s are correct and we’re left trying to explain to our clients why the new forms aren’t correct….and “trust us” here’s the real number. That’s just pitiful planning and execution on the part of the CFPB. Let’s get the numbers right on the disclosures. The GFE from 10 years ago is still the best form out there. I could have modified that slightly and still provided the same (or better!) clarity to clients.
I must say that TRID has of course impacted the way we do business, I have had several TRID closings already all without any issues. Our company was ready as we were training for at least a whole year prior to implementing the TRID way. My borrowers all seem to like to the new documents the closing disclosure is much more borrower friendly. Its all about setting the proper expectation up front. Michael Lasson – First State Bank Mortgage
I must say that TRID has of course impacted the way we do business, I have had several TRID closings already all without any issues. Our company was ready as we were training for at least a whole year prior to implementing the TRID way. My borrowers all seem to like to the new documents the closing disclosure is much more borrower friendly. Its all about setting the proper expectation up front. Michael Lasson – First State Bank Mortgage http://www.yourlakeloan.com
I think more like late Spring it will be that it won't be a big deal. Obviously my opinion, but a good solid 6 months of implementation is what I am loooking for before it is a normality within the Lending Community and the Realtor Community and before everyone understands, "Hey let's add 10-15 days to the Escrow to protect the Consumer AND make sure the Consumer has a pleasant experience instead of a negative one and in hopes that Consumer will have a positive outlook on a Move Up Purchase in 5-10 years instead of a negative one". If a Lender or Realtor can't afford to extend an Escrow period becasue "they need to get paid", then they are in the wrong business.
When I get a Contract and there is 24 days left until the COE, and I ask the Buyer if it was them that wanted this Closing so quick, most often the response is, "No, my Realtor said we shouldn't have any issue in doing this", failing to understand the amount of pressure that is ready to be applied to the Consumer to perform in that manner. Forget about us and how that can burden an U/W system, but let's take it from a Buyer's side who says have children, both parents work, perhaps coach their kids extracurricular activities, etc, etc. And now we are going to need items from them NOW, no, not in 3 days, we need it in 24 hours. Sure we may close on time, but does that mean it was successful? No it was not, if they despise the exact thing we just went through. Let's not make it the worst thing ever that the Consumer has gone through. Simply stating, just ask for a little longer Escrow up front.
Here is the problem with Bryan's prediction, he is probably right. Within 60 days, people will probably accept it which is the real problem. When Dodd-Frank came out, we bitched and then accepted it. Then they came out with HVCC on appraisals and we bitched and accepted it. At what point to do we stand up and say this is enough. I can appreciate the fact that borrowers need to be protected but they also cannot be completely blind to purchasing something like a house. The other thing that happens is there is always a delayed reaction. What has happened in this case is 78% of all loan officers have gotten out of the business since Dodd-Frank has come out. Granted, alot of them were refi houses that dried up. Some people say that it is an opportunity for the ones remaining which is true. I am working harder now and making less money than I did in the 15 years of doing this business.
My issue is if you talk to enough people every company has had a different interpretation on how to implement the program and how the rules work. We all have a different way of getting our title companies approved. It is driving them crazy.
I have to say overall TRID has not been that bad. It has made some unhappy borrowers in the fact that moving the closing up is virtually impossible. I think TRID is causing originators to up their game and be more proactive in clearing conditions and getting documents from the clients. The originators that adapt to the "new" process will clearly rise to the top and the referrals will follow.
TRID
The
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I
Drink
I spoke to many RE agents in the lead up to Oct 3rd, all was well, they were well informed, they were ready for the adjustments, until Oct 4th. Then we had 25 day escrows written and demands that we deliver or they would move file to broker with higher rate and fees in order to accommodate the CUSTOMERS. Oh, by the way, the broker missed the closing date as well and no the buyer has a rate .75% higher and paid >$1,500 in fees.
Whereas I welcome and even like the new LE (could be tweaked a bit) the combination of the LE and CD is completely confusing the public. I personally just closed on a house, and the process was just a mess. I attribute a lot to the fact that is was all new for all parties involved and even had my RE agent request a 45 day escrow (which almost lost me the home, as the sellers wanted 30 days)
The transactions you refer to all seem one sided, but what if there is a domino as there will be in a healthy market. 2-3 sometimes many more in line and it just takes one and it will affect many lives. And my thought is net, it will cost the consumer a lot money, lost time and health.
What this industry has lost in the madness of being compliant to a entity that is politically driven, is that there is a customer that is paying much higher prices with horrible service levels.
TRID is a pain in the ass. Uninformed agents are part of the problem but how do you explain that to borrowers who just want to close & get on with their lives? Agents deflect any criticism and just have one more thing to bitch about at the closing. Like the one I had three days ago. Guy just shook his head & said "you guys are going to have to do something about this!" "What am I going to 'do' about it bud?!"
If he knew anything about TRID, he'd know I had zero 'say' in how TRID came about or was implemented.
TRID issues are hitting the broker channel harder than small regionals at the moment, IMO. Every wholesaler has a different process, wait time, & workflow. I had a wholesaler tell me with a CTC we got 15 days ago, couldn't close until sometime in December w/unknown date. Rate was expiring (cost my borrower an additional $600 to protect their lock). Lenders' closing dept. couldn't 'draw docs', was having software implementation issues, didn't test enough apparently. 15 days! Unreal.
Everyone freaked out, we held deal together & got it closed at end of November even (lots of threats, whining, and accountability needed to get lender to finish line). But it was more stressful, costly, time consuming path than pre-TRID. Consumers weren't any more clear on #s. I'd say they were more confused by it all & why they had the unfortuanate luck to buy a house while the industry was working through a half-baked implementation.
Having the borrower sitting by their email at 4pm (MST) in the afternoon waiting for an East Coast lender to acknowledge a CD at 6pm(EST) is stupid.
CFPB has everyone scared. Hopefully it will be a concern of the past in 6mo but implementation & helpfulness from CFPB on the whole change has been less than mediocre & the memory of yet another disappointing regulatory change implementation is in the books.
I hope next administration pulls the reins in a bit. Attitude at the top is adversarial. Granted, CFPB mission is tough. Very tough. But there is a better way to 'administer' their duties. They suck at it & most the industry doesn't like them. I suspect there MUST BE someone better suited to do the job than Cordray.
i think the major problem I see with all of this ….Is everyone has a different interpretation of 1026….This all would be much easier if we all were playing the same game at the same time …..too many companies/Lenders doing it to many different ways….to many title companies doing it to many different ways…..I guess the old adage of being a duck in water and let it roll… applies…i have closed 2 TRID loans in less than 30 days and both were done in October….but I took the approach of business as usual and just made it happen…Do I think TRID is better …..NO…But it is their ball and bat and we need it to play the game ….
what is up with all the RE agents? They are not listening – 30 day escrows are a thing of the past until the banks can get a real grip on TRID. We would love to close your loan in 21 days, 30 days but it is just unrealistic…..
Communication is the key, just as it was before TRID was implemented. Being a renovation loan officer for the past 10 years, these loans are "tougher" than traditional loans, as there are many more moving parts involved in the process (contractors, bids, HUD Consultants/inspectors, subject-to appraisals, etc.). This leads to more opportunities for delays. Being a teacher prior to getting in the mortgage industry, I spend the time to educate clients and realtors about the expectations upfront, but additionally what possible "speed bumps" we can encounter along the way that can be cause for delays. My first TRID closing required a 4 day extension, as we had a delay in receiving the appraisal back during the Thanksgiving holidays. It's not fun to have the conversations about extending a close date, but it was done immediately once we were told of that delay, and because it was discussed upfront as a possible expectation of a "speed bump," it was much easier for the clients to accept and understand. TRID is here…we have to work within its parameters… I would much rather set the expectation to have a longer time for a closing date, and be able to move it up for those deals where things fall in line than setting improper expectations and causing undue anxiety. Again, communication and education are the key.
some people say TRID means The Reason I Drink. what i hear from operation is the frustration of how many escrow company that were not ready. the borrowers CE is out docs are order but can not be done because escrow does not have the paper work to send out a CE to the seller. Let’s face it most problems come from the lack of the taking the changes serious and educating everyone you can. Anything new can be a pain but they have been throwing everything but the kitchen sink at us . It will take 90-120 days and this will 2nd nature and then they will change it Ha Ha
You have hit the nail on the head! The major problem seems to be agent that want business as usual and failed to learn what would bre required with TRID. Can I say they were uninformed? Some have even been saying to our title companies, "what is TRID". These are unprofessional agents that need to get our of the business. They give us all a bad name.
In fact when all parties know what they are doing closings have been happening in less than 30 days. I have planned 45 days for all closings since TRID, but we have been closing in less than that.
There is nothing clearer about the settlement sheet. The clear settlement sheet was two pages, or heck three pages, which we just abandoned. One frustration I've run into on nearly every contract, at least one of the two real estate agents does not complete their contact information. I find it hard to believe agents don't want to write down their contact address, phone number, etc. Wouldn't it make it easier for their clients to reach them or to get paid? Isn't it a requirement to actually complete the contract? I'm not kidding I have a contract where the agent scribbled her name and I have no idea what it says; no brokerage listed. Now I am required by one of my lenders to fill out all the agent, seller, etc information on their website, which takes another half an hour of my time when I'm searching all over the web for real estate agent info.
You are right, we should have stopped them at HVCC. I can tell you Mark Savitt was President at the time of NAMB and he made a sweep thru my area and three, yes three brokers showed up. If just all the mortgage brokers got involved it perhaps would have made a difference. If all brokers and correspondents got involved now it could maybe make a difference. HVCC/AIR is simply a rip off. I am so weary of getting the absolute cheapest worst appraisers assigned. That is something cfpb could work on if they want to help the consumer. Ever rising costs, ever lowering quality and service.
TRID = The Reason I Drink
I forget who said it but someone said a lender told them that TRID stands for The Reason I Drink!
David W. Scott i completely agree with you. We've closed post TRID purchases in our office in 21 days. We were the first TRID loan to be funded at Flagstar and 5th at US BAnk, then had zero issues when selling to secondary. We took the time to be informed prior to the TRID changes and instead of shying away and COMPLAINING ABOUT IT we embraced the changes as they are here to stay. For us it was business as usual for the most part.
Ps…just drives me crazy to hear agents make the comment "what is TRID?"
TRID-Tremendously Ridiculous Insane Delays! The consumer always suffers.
My first post TRIDulation loan was unfortunately a USDA loan supposed to close last Month and we are finally in the coveted "Know before you owe for three days" wait period, but it took 3 days to prepare the CD for review and approval before sending to the borrower. Now 1 full week delay as long as the borrowers e-consent. The seller is elderly and puking her guts out over the uncertainty of it all and how to manage the mover, and the borrower has to pay an additional $965 in rent to extend for a partial month or pay to store her household goods and rent a hotel until we get’r done. Thank you CFPB for “protecting the consumer” and requiring them to stare at their CD for three days while they rack up costly charges for moving, storage, and rent penalties. Back to Back closings-just forget about it.
This loan was supposed to be my first TRID closing however I just FUNded my first TRID yesterday with another lender who allowed me to input the CD after initial underwriter approval, as opposed to waiting for CTC. I also get to input the actual title and escrow fees for the initial LE that is then sent by the lender as they also do not allow me to issue a LE. I like this approach. There was no 3 day prep time so the CD was ready to go ahead of schedule, sent immediately electronically, and did not cause any additional delay. We closed a week ahead of the closing date!
All in all, things will eventually get better because we learn how to adapt. I only wish the CFPB would do away with the costly "Know for three days before you owe" delay and allow the consumer the option to opt out as most capable humans who got as far as getting loan approval can review their closing statement in a few minutes and decide not to sign their loan documents if something is wrong with the numbers. Did the CFPB think we hold our clients at gunpoint to sign their loan docs? The consumer is totally in control of the closing process, so why should they be forced to endure delays and penalties if they can exercise their choice not to!
TRID…Terribly Reinvented Inept Documents