TILA-RESPA Integrated Disclosure will add a week or more to closings

Rule gives all-cash buyers advantage in home sales

The bottom line effect of the TILA-RESPA Integrated Disclosure requirements that go into effect Aug.1 will be to add at least a week to closings, say industry experts.

The TRID rule, which was brought forth by the CFPB, has a sweeping impact on the real estate market through the implementation and compliance costs it requires.

Industry observers say the effect on individual home sales will be that it adds a week to closings. Marketwatch has the story:

Benjamin Niernberg, executive vice president of business development with Proper Title LLC, a title insurance company in Northbrook, Ill., said he expects closings this summer to take a week more than usual, which could hurt homebuyers who are depending on financing to come through quickly to have a chance against all-cash buyers.

“It can push the closing six days out, but we’re talking about business days, so if it falls on a weekend, it could be even longer.” Niernberg said the new rules, which have been in the works since November 2013, could widen the advantage all-cash buyers currently have over those dependent on bank financing when it comes to closing quickly in this red-hot real-estate market.

Here’s what’s happening. The changes the federal government is requiring that loan disclosure documents starting Aug. 1 combine the information required in the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). Now, under the new rule change, known as the “Know Before You Owe” rule, or the TILA-RESPA Integrated Disclosure (TRID) regulation, consumers must be given the new combined Loan Estimate (LE) with all the charges, fees and line items three days before the closing, rather than at the closing on the HUD-1 form, which itself will disappear.

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