In January of 2015, it took an average time of 40 days to close on a home loan. Now, the most recent data from January 2016 shows that time has grown longer and the average closing time on a home loan is now 50 days.
The issues causing such long closing times stem from the government’s new loan disclosure rules, the TILA-RESPA Integrated Disclosure (TRID) regulation. The main issue is a federal rule change by the Consumer Financial Protection bureau. The new rule states that loan disclosure documents must combine the information required in the Truth in Lending Act and the Real Estate Settlement Procedures Act.
According to MarketWatch, the rule change states that “consumers must be given the new combined Closing Disclosure with all the changes, fees, and line items three days before closing, rather than at the closing on the HUD-1 form, which is no longer used.”
The purpose of this change was to prevent unscrupulous behavior of some lenders, brokers, or title companies and allow borrowers more time to go over loan documents with a real-estate agent or attorney before signing.
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