Agents Plan to Extend Sales Contract for TRID
September 3, 2015
About 56 percent of REALTORS® say they plan to change their purchase agreements to allow for a longer timeline for the closing process due to the upcoming changes from new mortgage disclosures rules, according to a new survey by the National Association of REALTORS®. Thirty-one percent of real estate professionals surveyed said they would also add contingencies to the contract.
Starting on Oct. 3, the TILA-RESPA Integrated Disclosure rule is to go into effect, which will merge the HUD-1 Settlement Statement, the Good Faith Estimate, and the Truth-in-Lending disclosure form into two new closing forms: a Loan Estimate and a Closing Disclosure. The new rule also aims to provide consumers with more time to review the total costs of their mortgage prior to closing. The Loan Estimate form is due to consumers three days after they apply for a loan, while the Closing Disclosure form is due three days prior to closing.
Download the report: REALTORS® and the New Closing Process Survey
The current HUD-1 settlement form can be revised and delivered up to the day of settlement, but the new mortgage forms must be finalized and in the borrower’s possession three days prior to closing. If that deadline is not met, borrowers will receive another re-issuance of the closing disclosure and wait another three days.
As such, some real estate professionals are extending their contract timelines due to the uncertainties of dealing with the new regulations, says Ken Fears, NAR's director of regional economics and housing finance.
Eighty-two percent of real estate professionals also say they've taken some training to prepare for the TRID rule.
To try to avoid a closing delay from the new TRID rules, 30 percent of real estate professionals surveyed by NAR say they plan to share contracts and amendments sooner with lenders, title insurers, and closing agents. Thirty-three percent plan to perform final or pre-closing walk-through home inspections earlier, and 37 percent say they plan to develop a plan with lenders and title agents to ensure a smooth transition with TRID.
Source: "Real Estate Agents to Extend Contracts for New Mortgage Disclosures," National Mortgage News (Sept. 1, 2015) and "REALTORS® Train for TRID," National Association of REALTORS®' Economists' Outlook blog (Sept. 1, 2015)
Updated: December 07, 2018