The TRID ripples: Time to close mortgage loans continues to rise

Loans now take 10 days longer to close than one year ago


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.

The average FHA refinance FICO score decreased to 645, down from 651 in December.

And with mortgage interest rates continuing to fall recently, the share of closed refinance loans climbed from 43% in December to 47% in January.

That’s still under January 2015’s refinance share, when 51% of closed loans were refinances, but well above six months ago, when the refinance share was 36% in July.


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