Borrowers are experiencing higher costs now that the TRID regulations are in effect, according to a Mortgage Bankers Association survey in which mortgage lenders saw their total loan production expenses climb to $7,747 per loan in the fourth quarter of 2015, up from $7,080 per loan in the third quarter, reports MarketWatch staffer Daniel Goldsetin.
As a result, profits per loan for lenders fell to about $493 on each loan they originated in the fourth quarter of 2015, down 60% from the third quarter of 2015, it added.
Some people think the new regulations are getting blamed unfairly. “Lenders are using TRID as a scapegoat for everything,” said Andrew Pizor, a staff attorney at the National Consumer Law Center in Washington, D.C. “It wouldn’t surprise me if they were using it to raise fees,” he said.
The Consumer Financial Protection Bureau required that as of Oct. 3 loan disclosure documents must combine the information required in the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). Under the new rule change, known as the “Know Before You Owe” rule, or the TILA-RESPA Integrated Disclosure (TRID) regulation, consumers must be given the new combined Closing Disclosure (CD) with all the charges, fees and line items three days before the closing, rather than at the closing.