This Headline from REALTOR Magazine sums up the probable result of an impending significant change to the Mortgage Process.
The cfpb – Consumer Finance Protection Bureau has cooked up some new rules that we so lovingly call “TRID”
TILA-RESPA Integrated Disclosure rule
Essentially, this is a rule that changes much of what happens with respect to Lending Disclosures for Mortgage Borrowers and many of the processes relating to Home Buyer requirements throughout the process of consummating the purchase of a house.
The new rule requires rigid timelines for Mortgage Lenders and Mortgage Borrowers for the period between executing a contract to purchase a house and the closing.
Because we are all connected (Buyers, Sellers, REALTORS, Mortgage Lenders, Title Companies), these new rules affect ALL of us AND the entire process.
We expect some hiccups from the start.
Many of the things we are accustomed to doing will no longer be possible thereby “doing away with the 30 day close” which (in my opinion) is not such a bad thing in and of itself.
Truthfully, the up-side of these new rules is that it WILL force all of us professionals to S.L.O.W. D.O.W.N. and pay attention in order to be accurate and complete with the process.
These changes are requiring some alterations of our standard Purchase & Sale Agreements and some of our other frequently used forms.
They are also forcing us REALTORS to be more rigid in our execution of the process, so we will necessarily need to add a few new accountability forms along the way as we ultimately become the “Enforcers” of the new rules throughout the contract to close period.
At the end of the process, the Title Companies take over and are adjusting their processes just as significantly, even to the extent that many Mortgage Companies will require the Title Companies to become “TRID Certified” through a 7 step requirement for compliance.
One uncomfortable truth of all of this is that we expect a closing to require 45-60 days (rather than the 30 days to which we’re currently accustomed) . . .
AND there’s a real potential danger at the end that there will be CLOSING DELAYS due to someone (anyone) fumbling a ball at the last minute. These delays could be 3 to 7 days (best case).
Given all of the above, we Sales Professionals are figuring out that these new rules are putting Home SELLERS in the precarious position of packing their house up and planning to move out on a particular day knowing all along that there could be a blip that might delay the closing. One possible “band aid” for this is negotiating some days for “Seller’s Continued Occupancy after Closing.
Of course, this potential has ALWAYS been present, but we have a heightened awareness because we hate change . . . especially change created by a Federal “Bureau” 🙂
These rules change October 3, 2015
WE ARE READY!
The Tennessee Association of REALTORS has already revised our contracts and disclosures to be compliant.
Principal Brokers are reading and studying and attending meetings so as to be able to educate and prepare all real estate sales professionals so they can continue to serve their clients and advise them appropriately.
I can speak for Pareto Realty that I have studied and studied and studied and know the ins and the outs of ALL of these changes . . . We are READY!
SO . . . If you are thinking about buying or Selling a house after October 3, don’t you worry about all of this . . . We REALTORS have got your back.
Don’t get mad when we advise you not to expect to close faster then 45 days from striking a deal on a house.
I am always available for consultation and more in-depth ‘splainin’ of the scope of these new rules.
We at Pareto Realty would be honored to shepherd you through this process here in Middle Tennessee.