TRID - Helping The Consumer?

The light turned yellow just in front of him. He did the right thing, stopping at the crosswalk, even though he could have beaten the red light by accelerating through the intersection. The tailgating woman was furious and honked her horn, screaming in frustration, as she missed her chance to get through the intersection.....dropping her cell phone and makeup. As she was still in mid-rant, she heard a tap on her window and looked up into the face of a very serious police officer. The officer ordered her to exit her car with her hands up.

He took her to the police station where she was searched, fingerprinted, photographed, and placed in a holding cell.

After a couple of hours, a policeman approached the cell and opened the door. She was escorted back to the booking desk where the arresting officer was waiting with her personal effects.

He said, "I'm very sorry for this mistake. You see, I pulled up behind your car while you were blowing your horn, flipping off the guy in front of you and cussing a blue streak at him. I noticed the 'What Would Jesus Do' bumper sticker, the 'Choose Life' license plate holder, the 'Follow Me to Sunday-School' bumper sticker, and the chrome-plated Christian fish emblem on the trunk, so naturally....I assumed you had stolen the car."

 

It is pretty much a given that for regulators, especially those focused on financial matters, the cost of a given regulation in determining whether or not to implement it is not as critical as other factors. In the case of the CFPB's "Know Before You Owe" TRID changes, not only is the cost being born by lenders and investors, some of whom continue to be nearly frozen in their tracks for fear of making a mistake and the liability associated with it, but also by the consumer in increased costs and time required by lenders to fund residential mortgage loans. As we all know, "time is money" and the securities market makes it clear that delays result in higher costs.

Ben Lane with HousingWire did a very nice summation of information released by Ellie Mae. Here is an exerpt:

In the months since the implementation of the Consumer Financial Protection Bureau's TILA-RESPA Integrated Disclosures rule last October, repeated evidence shows the impact of TRID, whether the reports were anecdotal or statistical.

Now, a new report from Ellie Mae shows more statistical evidence on how deeply the impact of TRID is being felt, with the time to close a mortgage loan climbing again.

According to Ellie Mae's latest Origination Insight Report, the average time to close a loan increased to 50 total days in January, which is up four days from when TRID went into effect in October.

Additionally, January 2016's average time to close a loan is 10 days longer than just one year ago in January 2015, when the average time to close a loan was 40 days.

The average time to close a loan has grown steadily since TRID went into effect, climbing from 46 days in October to 49 days in November and December and now to 50 days.

According to Ellie Mae's report, the average time to close a purchase loan rose one day from December's total to 51 days in January, while the average time to close a refinance also increased one day from 47 to 48 days.

Ellie Mae's report also showed that the average time to close Federal Housing Administration loans increased in January from 49 days to 51 days, while conventional loans remained largely unchanged at 49 days.

Additionally, the time to close Department of Veteran Affairs loans increased from 52 to 53 days.

Despite closing times increasing, Ellie Mae's report, which is drawn from a "robust sampling" of approximately 66% of all mortgage applications that were initiated on Ellie Mae's Encompass mortgage management solution, also showed that conventional purchase closing rates reached a new high in January.

According to Ellie Mae's report, conventional purchase closing rates rose above 73% for the first time since Ellie Mae began tracking data in August 2011. Ellie Mae's report also showed that closing rates for all loans increased one percentage point to 68%. Refinance closing rates increased to nearly 65%, while purchase closing rates increased to just over 72%.

And while closing percentages were up, Ellie Mae's data also showed that average FICO scores were down as well. According to Ellie Mae's report, the average FICO score on closed loans decreased from 722 in December to 719 in January, which was the largest month-to-month decline since mid-2015.