If it has been a while since you have been through the mortgage lending process, it has changed; actually even this month, it has changed.
A quick trip down memory lane will remind us of why it is still undergoing changes. The mortgage industry created quite a mess, not just nationally, but nearly globally, with the housing industry fiasco of 2007-2009. San Antonio didn’t feel it nearly as much as most of the country, but it has had lasting effects for many families on many levels. None of us, neither you nor I, want that to ever happen again. As I am a silver lining kind of gal, I see the changes as a benefit for my clients. I structure my client flow accordingly to manage the process as proactively as possible, so they can still enjoy finding and buying their new home.
Although the hoopla of the Dodd-Frank Act may have been nearly debilitating for many lending institutions and tested the patience of qualified clients, it is the means to an end. I never lose sight of how it may feel for my clients to go through the loan process, and I work hard to ease as much of that trepidation as possible.
The latest roll out from the CFPB that occurred on October 3, 2015, is called TRID: TILA/RESPA Integrated Disclosure Rule. It seems simple enough from the clients’ perspective. It combines a couple of old confusing forms at both ends of the mortgage process into easier to read formats with a few required days built in so the client can review everything. The new forms are called the Loan Estimate and the Closing Disclosure, which has to be delivered to the borrower no less than 3 days prior to closing.
What isn’t noted in that overview are all of the compliance specific requirements of lenders. There are also additional mandates that aren’t immediately obvious and don’t account for the overall logistics of how a loan flows from application to the closing signatures. Given that the regulation is about 2000 pages, I can hardly summarize it into one page newsletter. However, one thing is for sure. Every lending institution has been working night and day to make sure they are compliant.
The biggest immediate toll I see is the number of days necessary to get to closing. This varies dramatically from lender to lender, as each is managing their own implementation of systems. In addition, every Mortgage Loan Originator has his or her own work flow to follow to be compliant. It is also heavily impacted by client responsiveness. For me personally, with a responsive client that contacts me proactively and is qualified to purchase, I can manage as little as a 30 day closing timeline, starting from when I receive the executed (signed by both parties) contract. Many lenders are targeting 45 days while others are asking for 60. Some are even requiring 90 days. As any initial setbacks are handled, I expect timelines to shorten again. But the risk is too great for most to not be conservative in their commitments right now.
We are a few days in and still breathing, so I am not worried. Sellers want to sell, buyers want to buy, and with open communication between borrower, lender, and Realtor®, we can all have a happy celebration at the end. That is my main goal for sure! 🙂
Please call me with questions; I love what I do and look forward to assisting you with your home loan needs. 210-775-1869