According to the National Association of Realtors, from November 2015 to December 2015, existing home sales increased by 14.7 percent. Instead of the housing market outperforming expectations, this boost was due to the 11 percent drop seen in November, which was caused by “TRID.” TRID stands or TILA-RESPA Integrated Disclosure.
TRID involves a new set of federal regulations. The acronym stands for “Know Before You Owe.” This is meant to help you from being caught off-guard by the hidden costs and fees associated with home loans. These risks make lenders disclose all the fine print of the loans prior to closing. Before making a huge commitment, you have plenty of time to review the terms and ask questions.
TRID became effective in October and delayed November closings. It took time to adjust computers and adhere to the new protocol. Fortunately, December was a stronger month.
Although December 2015 closings took a week longer than the previous year, it was due to factors other than TRID. For instance, rates remained lower than expected, so more lending applications were pushed through. These high numbers took longer to process. Even though this seems like an insignificant amount of time, quite a number of homes can close in a few days.
With the TRID problems solved, delays will not be a large dilemma. A bigger challenge you may find as you enter the housing market is the lack of inventory available. As the busy spring boom is approaching, this may mean more headaches will develop.