Average Days to Close Loans Taking Longer Under TRID, Reports Show

December 17, 2015

More than two months since the Consumer Financial Protection Bureau’s Know Before You Owe TILA-RESPA Integrated Disclosures (TRID) went into effect, new closing data reveals the impact the regulation may be having on closings.

The average time to close a loan increased by three days to 49 total days in November, the longest time to close since February of 2013, according to Ellie Mae’s latest Origination Insight Report. The average time to close FHA, conventional and VA loans all increased to 49, 49 and 50 days, respectively. The increase could be due to lenders adjusting to TRID.

“We are beginning to see the anticipated impacts of the Know Before You Owe changes that went into effect in October,” said Jonathan Corr, president and CEO of Ellie Mae. “The time to close loans has crept up to 49 days, a 3-day increase over October.”

In another report, RealtyTrac's home sales report for October also indicates that the number of days to close has increased since TRID went into effect.

"Prior to October 2015, housing transactions were normally trending in the neighborhood of 30 to 45 days to close, but new TRID regulations have pushed current housing transactions to 45 to 70 days to close," said Michael Mahon, president of HER Realtors, covering the Cincinnati, Dayton and Columbus markets in Ohio, in the RealtyTrac report. "These delays are pushing October pending transactions to closings in late November, December, if not January in some instances."

Ellie Mae’s data also shows that the average FICO score on all closed loans fell to 721, marking the sixth consecutive month of decline. The driver of the FICO reduction appears to be average FHA refinance FICO scores falling for the second straight month to 648.

Closing rates for all loans reached their highest point, 68 percent, since Ellie Mae began tracking data in August of 2011. The closing rate on purchase loans increased to 72 percent.

The Origination Insight Report mines its application data from a sampling of approximately 66 percent of all mortgage applications that were initiated on the Encompass mortgage management solution.

Contact ALTA at 202-296-3671 or [email protected].