Lender Evaluates New Mortgage Rule

Published on: January 22, 2016

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Meagan Nichols, The Memphis Business Journal

In October 2015, the TILA-RESPA Integrated Disclosure rule [TRID] went into effect to help streamline the mortgage process.

Now, a few months after TRID's implementation, the Memphis Business Journal talked with John Loebel, senior vice president and residential manager of Financial Federal Bank, to see how homebuyers and lenders are liking the process.

MBJ: How have the TRID regulations been received by both homebuyers and lenders?
John Loebel: 

The TILA-RESPA Integrated Disclosure rule is impacting real estate and mortgage finance along every step of the system.

Specifically, homebuyers now receive a loan estimate in place of the good faith estimate, which further breaks down information regarding the cost of their loans. The borrower also receives the closing disclosure – which replaced HUD1 and the truth in lending disclosure – three days prior to closing, allowing extra time to review final closing figures and resolve discrepancies.

From a lender’s perspective, the regulation places more responsibility and burden on the lender.

TRID is intended to make the mortgage process easier to understand. Now that it has been in place for a few months, do you think it is meeting its goals?

Overall, the increased transparency is benefitting everyone in the long run. Financial Federal Bank has only received positive feedback since rolling out the new system. Our clients agree that the new mortgage processing arrangements are more efficient and close the gap for error.

How much longer, on average, is the mortgage process now taking?

Realtors have done a good job of educating their buyers about the possibility of the process taking slightly longer than what we were all accustomed to, prior to the new guidelines. While most of the contracts we see have a closing date 45 days from the date the contract is signed, we are still closing some of our loans in 30 days.

Our goal and continuous commitment is to meet the buyer’s closing deadline. The TRID changes, therefore, have not delayed any of our closings.

What is your No. 1 piece of advice for mortgage customers?

TRID is an attempt for the lenders and the Consumer Financial Protection Bureau to better serve them and correct any system faults. Thus, our advice to our borrowers would be to appreciate the new transparency of the loan process. We hope it allows for better service and clearer decision-making.