After the Consumer Financial Protection Bureau finalized the TILA-RESPA Integrated Disclosure in Oct. 3, 2015, credit unions reportedly began experiencing delays closing home loans, according to data compiled from research firm Callahan & Associates.
More than 200 credit union executives from 46 states, participated in this survey to evaluate the effects of TRID at their credit union.
They find 96.1% of the credit unions experience closing delays over the past six months.
In real time, the average number of days to close by respondents is 42, compares to the average closing goal of 31 days.
More than half of respondents reported TRID added five or more days to mortgage closing (54.7%), followed by delays of three or four days (34.5%), and one or two days (6.9%).
From the Callahan & Associates survey, respondents stated 4 primary reasons for closing delays.
Note respondents could only chose one of the following, thus the numbers add up to 100%:
- 51.5% cited settlement collaboration as the primary cause of closing delays. New lender workflow between title companies and members, as well as refinement of processes and procedures, are creating turnaround roadblocks.
- 26.2% reported multiple areas were equally problematic. Settlement, system, member, and mortgage disclosure compliance were among the primary causes for closing delay reported by respondents. Open-ended survey responses noted timing issues with disclosures, difficulties in integrating mortgage origination systems with core processors, and challenges with title companies, Realtors, and other settlement agents.
- 16.2% noted system issues as the primary cause of closing delays and indicated their mortgage loan origination and core processing systems are not fully equipped to handle necessary updates.
- 6.1% counted members as the leading cause of closing delays, which suggests some credit unions have members who are unable to provide documentation and other information in a timely manner despite enhancements to the Loan Estimate and Closing Disclosure.
The survey also covered the timeline of mortgage disclosures and the state of mortgage origination operations.
79.6% said they’re able to deliver disclosures quickly without issue. 20.4% stated they deliver three days before the mortgage closing, the absolute deadline for delivering Closure Disclosures. This delay could be the result of several variables, including settlement collaboration, system, and member delays as well as extra precaution to avoid TRID violations.