As the real estate and mortgage industries go, by extension so goes title insurance.
Therefore the business trends that are being experienced by title insurance professionals will also offer some insight into the health and direction of transactional real estate and mortgage refinances.
Hallmark Abstract Service, as a participant in a monthly national survey of title insurance industry professionals that’s conducted by Zelman & Associates, would like to share some of last months results as well as industry experiences with TRID…
Residential Purchase Orders: Agent Closed Orders Decreased 4% in January but Open Orders Showed Continued Positive Growth
– Agent closed purchase orders decreased 4% year over year in January versus a 4% increase for First American, the only publicly-traded title insurer that discloses intra-quarter monthly order flow.
– Agent opened orders increased 4% year over year versus a 5% decline for First American.
Residential Refinance Orders: Agent Closings Decreased 11% Year Over Year in January
- Year-over-year refinance performance
– Agent closed orders decreased 11% year over year in January versus a 4% decline for First American.
– Agent opened orders decreased 9% year over year versus a 35% decline for First American.
- Sequential refinance performance
– Agent closed orders decreased 34% sequentially in January versus a 19% decline for First American.
– Agent opened orders decreased 4% sequentially versus a 2% decline for First American.
TRID Experience
With respect to closing and documentation on TRID forms, survey participants noted similar issues as previous months, with communication bottlenecks, lack of knowledge of the rules and process and technology bugs topping the list. While participants generally note a significant number of problems, many have indicated they are slowly working through them, with seasonally-low volumes aiding the process.
Regarding closing times relative to December, roughly two-thirds of respondents noted no change in the number of days needed to convert an open order to a closed order. However, about a third of respondents noted slightly longer closing times in January relative to December, generally between one and seven days.
TRID And What Some Industry Participants Are Saying
We are “still seeing slowness in closings, customers are frustrated at the new ‘Easier’ forms, [but] they are not as easy to understand as the old HUD-1 was.”
“Many involved in the transaction still do not understand the necessity to get all pertinent invoices to the settlement agent in a timely fashion such that they could be included on the CD and allow for a timely closing.”
Issues include “lenders not knowledgeable, incorrect preparation of CD and missing the [state-specific] Disclosure.”
We are “still experiencing delays in closing as lenders are NOT getting the CD out within the three days. Also the ‘Know Before You Owe’ has done nothing except cause headaches for borrowers and not detected any fraud.”
“Lenders who are preparing and delivering the CDs for the most part are not getting our fees in advance and in some cases not telling us that they have delivered until their borrower is about to arrive in our office. Getting our fees / collecting the correct amount for our fees is a fight and balancing to fund is even worse.”
“Since volumes are low, TRID deals seem to be being handled well.”
“Non-Borrowing spouses and other title holders are required to sign by some lenders and not by others on the Closing Disclosure. Lack of consistency on standards of who needs to sign the Closing Disclosure” is a problem. “TRID has not posed any appreciable issues or problems for my firm.”
“We are encountering problems from the lenders forms. The lenders are placing fees in the incorrect locations on the CDF.”
“We recently had a closing adjourned because the Borrower signed the wrong date on the Disclosure.”
We have experienced issues with “changing fees on buyer’s side.”
“The biggest issue we continue to face is the disconnect in the flow of information between the necessary parties (loan officer, Realtor, title company and client).”
“Many lenders are sending CDs to the consumer without any notification to even their own loan officer and so the LO is unprepared to review the disclosed numbers with the client. Further, the individuals who are preparing the CDs are often doing so based on title company and lender fees and are not aware of fees that the Realtor usually communicates for payment on the transaction or they are not familiar with the method of calculating tax pro-rations in the area. As a result of this and the failure to keep the LO in the loop and the unwillingness to permit sharing (even when authorized) of the information with the Realtor, the consumer is often given incorrect numbers and when they reach out to the LO and Realtor for guidance, they haven’t yet seen the numbers and can’t easily address their questions. Further, this leads to last-minute corrections that could have been avoided if shared with these parties prior to sharing with the consumer.”
“The consumers are still struggling to read and understand pages 2-3 of the CD. The multiple columns, the rollup calculations and the line numbering are all confusing to them.”
“Delays in the lender submitting the final CD to the borrower” have caused issues.
“Generally, it’s taking 45 days to close.”
“People are still working through all of the steps.”
“There is still a wide discrepancy of interpretations of the rule with regard to how accurate the initial closing disclosure needs to be relative to non-lender fees.”
“Software issues from vendors for title companies and banks are still prevalent.”
“Collaborating [on the] CD is still done manually.”
“There is still little electronic collaboration.”
“Training on SoftPro and limitations of SoftPro remain a challenge. Entering data ‘incorrectly’ causes corruption of the file.”
“RamQuest is horrible for TRID closings. We just had to switch to SoftPro because the glitches were too many.”
“Still seeing a few come in on the [Closing Insight] platform, but not as many as we were led to believe. It is still a cumbersome program to work with and not at all user friendly.”
“Adoption [of Closing Insight] has improved slightly but I believe that is due to seasonal slowdowns and rate of learning curves.”
“We are still using manual workarounds. Not all files that should be coming through the [Closing Insight] platform are.”
“Lenders are leaving the [Closing Insight] platform.”
“Adoption [of Closing Insight] has not improved. Many lenders are still finding workarounds to the Closing Insight platform. It has been more of a hindrance than a help and it is not adding any efficiency value.”
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