Why Are Home Closing Times Continuing to Increase Under TRID?
A little over a year ago, on October 3, 2015, the TILA-RESPA Integrated Disclosure or TRID went into effect. This rule changed several of the forms used and altered the timelines for closings.
While many experts envisioned time to close increasing at the end of 2015 (the National Association of REALTORS issued a statement suggesting that its members add 15 days to closing), most did not see this being a long-term delay. So why are closing times still increasing over a year later?
Questions about closing costs?
Get the answers with our free guide.
GET THE GUIDE
TRID and the New Normal
According to statistics, home closings took slightly longer in November 2016 than they did the year prior. But did this have anything to do with TRID?
Possibly.
However, while the National Association of REALTORS (NAR) initially cautioned real estate professionals to expect 45-day closings, the statistics looked more like 36.7 days in November of 2015. While this is nearly a week longer than what the industry had come to expect at about 30 days before TRID, it was not the projected 45. This year in November, it edged up to 40.5 days to close.
Ken Fears, NAR’s manager of Regional and Economics Finance Policy said the increase could be due to the many people who had been sitting on the fence about home buying changing their minds due to the (then upcoming) election and expected rate increase at the end of the year. It caused September and October to be busy months for home closings. The number of home purchases in those months may have caused delays in November.
The market also saw a significant number of re-fi’s–an increase of 10% from the previous year–due to concerns over rising interest rates. Mortgage originations in 2016 were up to 1.9 trillion from 1.6 in 2015. Those larger numbers may have also been part of the delay.
Still, the industry is hoping the numbers continue to increase so what does that mean for closings? Ken Fears added, “These delays should ease in the coming months as refinance volume eases and as lenders continue to adapt to the new settlement process, but a longer average time-to-close may be part of the new normal.”
But there is hope that the closing time numbers will come back in line with November of 2015, as more companies turn to technology and closings are handled electronically. Not only does an eClosings mean less paper, but it also means quicker sign-offs and less administrative error. The error can result in costly delays so by increasing accuracy, you can decrease delays.
Find Out More About eClosings
Are you interested in an eClosing? Bay National Title Company can help. It’s all we do. We combine expert attention to detail with interest in helping our customers understand the process as much as they want to. That’s why 96.4% of our customers look to work with us again.
We were in compliance with TRID before the required federal deadline, and we strive to get our customers quick, accurate closings every time. If you are ready to work with a title company you can count on, choose BNTC.
CHECK OUT THESE RELATED POSTS:
