Many real estate agents and home builders remain in the dark about the details and likely impact on their businesses of the combined mortgage disclosures known as TRID.
Main reason? Some of the lenders they rely on to advise them are poorly informed, too, and prone to spread bad information about the TILA-Respa Integrated Disclosures that take effect in two months.
With that in mind, Ginger Bell, the senior vice president of e-learning at Morf Media, a San Francisco compliance training company, has traveled the country teaching mortgage originators how to properly educate their referral partners.
"For 90% of those [lending officers] that are sitting in the workshop, it is the first training they have ever been in," Bell said.
Agents have only recently begun serious discussions of the topic, said Drayton Saunders, the president of the real estate firm Michael Saunders and Co. in Sarasota, Fla. "You can never be too prepared, and it is very hard to prepare somebody until they know it is really going to affect their business," Saunders said.
Michael Saunders has an affiliated title company and an affiliated mortgage company, and he considers that a huge advantage for the real estate side when it comes to spreading the word on TRID, also referred to as Know Before You Owe.
Agents are having to deal with a major overhaul of the real estate process, Saunders acknowledged, but he said the key for them is to focus on counseling buyers to have their paperwork ready early in the process.
"I think people treat it as the 'sky is falling,' but when you really break it down, yes there are changes, but we're a date-driven industry," he said. The Oct. 3 implementation date is "going to be just one more date to make sure that we're clear on in the process."
The combination of three consumer disclosure statements into two clearer statements "is ultimately a very good thing," he said.
A pair of builders contacted by National Mortgage News that did not have in-house mortgage ventures did not wish to comment on how TRID affects them because they felt they did not know enough about the subject.
But TRI Pointe Connect, a Scottsdale, Ariz.-based joint venture between the builder TRI Pointe Group and loanDepot subsidiary imortgage, has been working on educating its staff and homebuilding partners on how the changes will affect its technology and processes.
"We see this as no different than any other change that the industry will go through. So, it's my belief that those that embrace it sooner will manage through it without having any negative impact on their business," said Ron Turner, the president of TRI Pointe Connect.
Consumers will have to finalize their selections earlier in the process in order to keep the process moving in a timely fashion, Turner said.
"You may lose a little bit of flexibility; a purchaser may not be able to renegotiate specific circumstances as late into the transaction as they may have otherwise been able to, without potentially delaying the settlement on the home," he said.
The firm's peers publicly traded home builders with a mortgage affiliate seem to have the change under control, Turner said.
Meanwhile, lenders and agents should be taking advantage of the rule's implementation date being pushed to Oct. 3 to get familiar with TRID's details, Bell said. The original deadline was Aug. 1.
"This delay will provide us with the time needed to successfully train and educate all of our industry partners including title and escrow, real estate processors, wholesale and originators," she said.
Michael Deery, the president of San Diego mortgage lender Citywide Financial, said "the word is out" among real estate agents and he believes the transition will be relatively smooth.
"We are in an ever-changing mortgage world, and extra compliance is just part of the landscape these days," Deery said. "Those who adapt quickly will prosper, those who don't will be left behind."