Closing delays reported by 96% of credit unions, survey finds... More than 200 credit union executives representing 46 states took part
in a survey conducted by research firm
Callahan & Associates. The research focused on how credit unions are affected after the Consumer
Financial Protection Bureau finalized the TILA-RESPA Integrated Disclosure (TRID).
TRID, finalized Oct. 3, 2015, is causing delays closing home loans, according
to data collected during the survey. In fact, 96.1% of the credit unions
reported closing delays over the past six months.
Respondents reported the average number of days to close on a home is 42,
as compared to the average closing goal of 31 days. TRID has added as
many as five days to the closing process for more than half of the respondents.
- 54.7% of respondents say TRID added five or more days to mortgage closing
- 34.5% of respondents say TRID added three or four days to mortgage closing
- 6.9% of respondents say TRID added one or two days to mortgage closing
The survey presented by Callahan & Associates offered four possible
choices for respondents to choose from as to why they experienced closing delays.
The majority, 51.5%, cited settlement collaboration as the main source
for closing delays. Turnaround time is increasing due to modification
of processes and procedures as well as new creditor work procedures between
title companies and members.
The survey finds 26.2% claim multiple areas of the closing process are
to blame for delays including, settlement, system, member, and mortgage
disclosure compliance. Respondents noted a variety of factors in the open-ended
portion of the survey to include:
- Challenges with realtors, other settlement agents, and title companies
- Problems in incorporating mortgage origination systems with core processors
- Timing issues with disclosures
System issues were noted by 16.2% of respondents as the core issue of closing delays.
A mere 6.1% identified members as the top reason for closing delays, suggesting
some credit unions are working to support members who find it difficult
to provide information or documentation in a timely manner regardless
of enhancements to the Loan Estimate and Closing Disclosure.
Also included in the survey was a timeline of the state of mortgage origination
operations and of mortgage disclosures. The vast majority, 79.6%, claimed
to deliver disclosures quickly and without a problem, while 20.4% reported
disclosures deliveries at the absolute deadline of three days before the
mortgage closing. Those respondents cited a delay for various reasons
like system challenges, member delays, settlement collaboration and taking
extra time out of caution to elude TRID violations.
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