HousingWire asked Sharon Voss, president of the Orlando Regional Realtor Association, to discuss how the new TILA-RESPA Integrated Disclosure rule from the Consumer Financial Protection Bureau will affect real estate transactions.
HousingWire: Given that TRID can't really be tested until after Oct. 3, how ready do you think the industry really is?
Sharon Voss: The CFPB’s new disclosure rule marks a major event that will cause some bumps in the road, but these new rules are intended to simplify the disclosure and loan-closing process for consumers and better prepare buyers for their mortgage transaction.
Realtors are ready for the changes. In fact, a survey by the National Association of Realtors shows that more than 80% of all Realtors have already received training about the new mortgage disclosure rules. For example, the Orlando Regional Realtor Association offers free and online classes to members, and its brokerages provide training programs to their agents. In addition ORRA affiliate members such as title companies and mortgage lenders host workshops for Realtors.
HW: Is there a sense of concern over the fact that CFPB is offering a "hold harmless" period, but it's not formal or defined?
SV: Realtors are supportive of a hold-harmless period. We advocate a period of restrained enforcement and liability for the TILA-RESPA Integrated Disclosure Rule for the mortgage lenders, title companies, etc., who are making a good faith attempt to comply.
HW: How will this affect transactions for the consumer?
In the early going, consumers might expect to see the mortgage process lengthened beyond even the new timeframe (approximately 45 days to close rather than the previous 30) as the new disclosure rule is implemented. To address the potential delays many Realtors report that they are planning to put a longer time horizon on their purchase agreements. Realtors are also advising renters to ensure their rental agreements cover the longer timeframe.
HW: What other effects will there be that are of concern that I haven't asked you about?
SV: Realtors across the country should ensure that they are using updated purchase contracts that reflect the new mortgage disclosure rules. In Florida, Realtors have had several months to preview redline versions of contracts and read through detailed explanations of the changes. In addition, the updated contracts became officially available prior to the effect date of the disclosure rules so there would be no lag in using them for our clients’ purchase offers.