Lenders and title companies are hesitant or unwilling to provide copies of the final closing documents to real estate agents due to the new TILA-RESPA Integrated Disclosures rule that went into effect on Oct. 3, 2015, an article in the Miami Herald by Kenneth Harney said.
Previously, the article explained that agents routinely received a copy of the HUD-1 closing form, which summarized the costs and credits for both the sellers and buyers in one document.
This is no longer the case. From the article:
Lenders are often reluctant to deliver it to any party not expressly designated in the government’s rules. The rules are silent about sharing a copy with the buyers’ realty agent.
Lenders also cite federal consumer privacy regulations that they feel constrain them from providing a Closing Disclosure to a realty agent because the document contains “non-public” personal information.
Title agents may not be willing to share it with them either because of their own federal privacy concerns. Some lenders also prohibit title and settlement agents from sharing the Closing Disclosure with realty agents.
Even though most parties blame the new regulation, it has caused concerns over the increased likelihood of inaccuracies during closing that could cost buyers money or delay the settlement unnecessarily, the article said.
From the article:
Emily Vaile, regional manager for BHGRE David Winans & Associates in Dallas, agrees. “Errors are happening all the time,” she said in an interview. “Maybe half” of Closing Disclosures contain them, she estimates — some minor and clerical, some consequential. If there’s something that’s inconsistent with the sales contract in the Closing Disclosure, “it may be obvious to the agent,” she said, but be totally missed by the buyers, whose heads are spinning with all the last-minute details of getting ready to move.
These aren’t the first mutterings of trouble when it comes to the new TRID regulation, especially when it comes to closing delays.
A recent report from Ellie Mae showed statistical evidence on how deeply the impact of TRID is being felt, with the time to close a mortgage loan climbing.
According to Ellie Mae’s 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.