On October 1, 2020, the Consumer Financial Protection Bureau (CFPB) released the results of its assessment of the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) Rule (TRID). The 316-page assessment report comes five years after it took effect and entails several interesting findings in the report.
According to the report, borrowers have a better understanding of mortgage transactions. The TRID disclosure forms improved prospective borrowers’ abilities to locate key mortgage information, compare the features and costs of different mortgage offers, as well as compare estimated and actual loan terms and costs. Evidence was mixed regarding whether the rule increased consumer shopping for mortgages. TRID-related guidance inquiries to the CFPB increased sharply beginning in early 2015, peaking around the rule’s effective date, and have since steadily declined.
The typical cost for a lender to implement the TRID rule was $146 per mortgage originated in 2015, or roughly 2%t of the average cost of originating a mortgage. Similarly, a typical cost for a closing company was $39 per closing in 2015, or about 10% of the average cost of closing. It has appeared to have decreased mortgage originations and increased closing times. Apparently this phenomenon was short lived, as both originations and closing times returned to pre-TRID rule levels in a relatively short period of time.
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