When the Consumer Financial Protection Bureau published the 1,888-page TILA-RESPA Integrated Mortgage Disclosures rule (“TRID”) in November 2013, I had just taken on a national role responsible for escrow operations with First American Title Insurance Company. For better or worse, my professional life would now be inextricably tied to TRID.
Like many of us in the residential real estate industry, I navigated the five stages of TRID-related grief. From the initial denial, “This is just a form change,” to deep anger, “This is much more than a form change!” Depressionset in as it became apparent that TRID will completely redefine residential real estate lending and the process for closing residential real estate loans. The depression soon transitioned to bargaining, “While we’re preparing well, if only there was a way to be confident that the entire industry would be ready!” And just then, the CFPB gave the industry more time to prepare, delaying the implementation date from August 1, 2015 to October 3, 2015.
Now, as October 3 and TRID implementation nears, I’ve reached acceptanceof the transformation triggered by TRID. The acceptance stems from the thousands of conversations and interactions I’ve had with lenders, real estate agents and brokers, title and settlement agents, and others in the real estate industry over the last two years.
In fact, as I’ve led or participated in hundreds of hours of internal meetings, customer-focused webinars, and presentations at various conferences, I’ve noted three takeaways from the TRID training trenches that trumpet some of the positive impacts to the real estate industry.
1. TRID is breaking down traditional silos between lenders, real estate agents and brokers, and title insurance and settlement service providers. Real estate professionals (anyone involved in residential real estate transactions) that are taking TRID seriously are gaining a greater understanding of, and empathy for, the important roles and responsibilities that each participant in the real estate transaction plays, as well as the unique challenges they face. This will translate into tangible business growth opportunities for many real estate professionals and the delivery of a better experience for home buyers and sellers.
2. TRID is shining a light on the distinct regional differences in closing and settlement across the industry. The way residential real estate transactions are closed varies from state to state and sometimes even differs significantly within the same state. The regional nature of the settlement process is partly why settlement has not evolved into a more standardized practice. As settlement professionals adjust to TRID, many are finding and implementing new best practices from across the country. The result is a subtle evolution toward more alignment in settlement processes.
3. TRID is elevating the role of consumer education among all the parties involved in residential real estate transactions. Consumers have always looked to real estate professionals for help understanding how to buy and sell a home. Traditionally, real estate agents and brokers have led consumer education efforts, and they will continue to play a leading role. But, it’s clear that lenders, as well as title insurance and settlement service providers, will need to play a larger role in helping home buyers and sellers understand the new residential real estate environment.
The transition and preparation for TRID has been arduous for the industry. And there will undoubtedly be challenges to address as implementation begins October 3. But, amid the pressure and the stress, I believe there are positive changes taking place that will benefit the industry, as well as home buyers and sellers.