Plenty of industry surveys have shown that the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosure (TRID) rule has negatively impacted real estate agents, lenders and settlement agents, but how has the mortgage transaction overhaul affected borrowers — the very people the bureau intended to help in creating the rule?

  • ClosingCorp interviewed 1,000 repeat homebuyers last month to compare their homebuying experiences before and after TRID went into effect on Oct. 3, 2015.
  • Respondents were about evenly split on whether the new Loan Estimate and Closing Disclosure forms are easier to understand than the old forms.
  • More than half of respondents encountered “unexpected costs, fees and surprises” in their post-TRID mortgage transactions.
  • Of the 78 percent of buyers who said they were informed that they could shop for different service providers, 74 percent of that group said they shopped for providers, but only 55 percent of them saved money -- somewhere between $1,000 and $5,000 -- as a result.

Plenty of industry surveys have shown that the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosure (TRID) rule has negatively impacted real estate agents, lenders and settlement agents, but how has the mortgage transaction overhaul affected borrowers — the very people the bureau intended to help in creating the rule?

A new survey conducted by real estate closing cost data and technology provider ClosingCorp finds that consumers feel that TRID makes it easier for them to understand their closing fees and costs, but the new regulation is adding time and anxiety to the closing process.

Are the new forms easier to understand?

ClosingCorp interviewed 1,000 repeat homebuyers last month to compare their homebuying experiences before and after TRID went into effect on Oct. 3, 2015.

Six months into TRID, the CFPB’s mission of making the homebuying process simpler and easier to understand seems to have yielded mixed results.

Respondents were about evenly split on whether the new Loan Estimate and Closing Disclosure forms are easier to understand than the old forms, with 63 percent of respondents agreeing with that statement, and whether they felt that their costs and fees were explained better in their most recent experience, with 65 percent of respondents expressing agreement.

Closing Corp_Homebuyers Study_Presentation_FINAL_Page_07

Are consumers paying more?

But according to the survey, more than half of respondents encountered “unexpected costs, fees and surprises” in their post-TRID mortgage transactions. This was especially the case for buyers of homes worth more than $400,000 and for buyers in the Northeast.

ClosingCorp attributed these sentiments to the fact that 59 percent of respondents said their closing costs were higher in their most recent transactions, which lines up with a recent American Bankers’ Association survey, which concluded that consumers are paying an average of 15 percent more in closing costs than they did prior to TRID implementation.

A majority of homebuyers (59%) had higher closing costs in their most recent experience.

The ClosingCorp survey respondents didn’t necessarily save much money by shopping around for different service providers, either.

Of the 78 percent of buyers who said they were informed that they could shop for different service providers, 74 percent of that group said they shopped for providers, but only 55 percent of them saved money — somewhere between $1,000 and $5,000 — as a result.

Nearly three-quarters of homebuyers shopped for different service providers, but only 55% saved money as a result.

How long are TRID closings taking?

Perhaps the biggest surprise in the survey’s results is that 70 percent of respondents said their TRID closings went faster, which conflicts somewhat with the National Association of Realtors’ (NAR’s) estimate that closings are being delayed about eight days.

However, 57 percent of the respondents said the overall process of getting and closing a loan took more time in their most recent experience.

“There’s been a lot of speculation about TRID’s impact and its value to consumers,” said Brian Benson, CEO of ClosingCorp.

“The findings suggest that our industry has more work to do to get comfortable with the TRID forms and processes and to educate consumers and their advisors.

“Our clients and partners believe technology and integrated data and communications will provide the long-term solution to these challenges.”

Email Amy Swinderman

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