An overwhelming majority of title professionals will be prepared for the Aug. 1, 2015, implementation of the Consumer Financial Protection Bureau’s (CFPB) TILA-RESPA Integrated Disclosures (TRID) rule, according to a survey conducted by the American Land Title Association (ALTA). The survey, conducted in April 2015, included more than 550 title agents, underwriters, real estate attorneys and abstracters.
“Ninety-two percent of our survey respondents indicated their company will be prepared to implement the new forms and comply with the CFPB’s regulation,” said Michelle Korsmo, ALTA’s chief executive officer. “The land title insurance industry has been a leader in preparing the real estate industry for the new disclosures and that is reflected in the preparedness of our members.”
The CFPB’s rule integrates forms required under the Truth-in-Lending Act (TILA) and Real Estate Settlement and Procedures Act (RESPA). For most consumer mortgages, a three-page Loan Estimate will replace the current Good Faith Estimate (GFE) and early TIL disclosure, while a five-page Closing Disclosure will replace the HUD-1 and final TIL disclosure.
When asked about title professionals’ biggest concerns while preparing for the new disclosures, collaboration with lenders and real estate agents, and potential closing delays top the list.
“For nearly two years, we have encouraged our members to initiate conversations with their Realtor and mortgage lender partners to ensure the implementation of the new forms is seamless for consumers beginning Aug. 1,” Korsmo said. “All stakeholders that participate in the transaction share the CFPB’s goal that these new disclosures help consumers better understand their terms when they buy a home or refinance their mortgage. Title professionals and lenders have been modifying business processes, upgrading software and training staff to comply with the 1,888-page regulation. ALTA has collaborated with the Mortgage Bankers Association and National Association of Realtors to host six industry education forums around the country, with a focus on ensuring real estate transactions continue to be closed efficiently and compliantly.
According to the survey, 87 percent believe TRID will delay real estate closings for consumers or result in closings taking longer to complete. Only 5 percent of respondents believe the disclosures won’t affect closings, while 8 percent are unsure. The top reasons given as to why closing delays will occur include:
►Changes at the closing table
►Small lender/credit collaboration issues
►Lender/Realtor collaboration issues
According to the survey, more than 65 percent of title professionals believe the TILA-RESPA forms will not help the CFPB meet its objective of helping consumers understand or be better prepared to understand the costs of buying a home. The top reasons given as to why consumers might not understand the new Closing Disclosure include:
►Inaccurate disclosure of title insurance premiums
►New forms highlight the costs but do not explain costs to homebuyers
►Too many details for homebuyers to grasp