After peaking at 3.9 days in August, delays in the settlement process eased in September. The difference in time to settle a sale eased relative to last year by 3.4 days.
Settlement delays surged in wake of Brexit as rates fell and lenders strained under a surge of refinancing. Under the new TRID or Know Before You Owe rules, a rate change greater than 0.125% that occurs within three days of closing can force lenders to re-issue the closing disclosure (the new document that replaced the HUD-1) and wait an additional three days. Most lenders have added extra time to the process in case of such changes, but some are still adjusting which contributed to the jump in delays. This issue was compounded by a longer-term trend of shortages of qualified appraisers relative to growing sales and refinancing volume.
Delays will likely ease through the fall as refinance demand burns out, lenders continue to adapt, and rates begin to rise in anticipation of a rate hike by the Federal Reserve.