TRID: Back on Track in June

The average time-to-close snapped back to its downward trend in June after a May reversion. The time from contract to settlement in June relative to the same time in 2015 edged lower relative to last month. On average, sales took 2.8 days longer to close compared to June of 2015. The June reading is the lowest since October of 2015.

Excluding the May reading, the average time-to-close relative to a year earlier, a means of measuring the post-TRID delays in the market adjusted for seasonality, has fallen steadily.  At this pace, time-to-close could be normalized by year’s end. Despite the delays, lenders indicated no cancelled settlements in the 1^st quarter, down sharply from the 4^th quarter of 2015.

TRID or Know Before You Owe is a new set of rules governing the closing process. These rules are intended to help make consumers more aware of their financial liability, while streamlining the process. Settlement delays may increase in the post-Brexit environment as a surge in refinancing taxes producers’ ability to underwrite and close on time. Still, the surge will be transitory as rates will eventually rise or refinance demand will burnout, but the trend will boost producers profits and help them to offset or to spread some costs. TRID related delays will likely ease through the summer as the first wave of regulatory reviews under the new regime provide insights, large producers gain market share, vendor software improves, and demand from mortgage investors recovers.