“The new rules are the reason I drink,” said Joe Parsons, a senior loan officer at mortgage lender PFS Funding in Dublin, California, referring to the federal home disclosure rules created to give borrowers more time to review documents. He says because the new rules are extending closing times beyond a week,some borrowers are having to pay extra to lock in rates 45 and 60 days out, instead of the usual 30.

The National Association of Realtors (NAR) tells MHProNews that for Nov., 2015, sales of existing homes dropped 10.5 percent to the slowest rate in 19 months, to a seasonally-adjusted annual rate (SAAR) of 4.76 million. The decline is 3.8 percent over last year, according to marketwatch.

NAR Chief Economist Lawrence Yun agrees with Parsons, saying the average closing time is increasing from 36 to 41 days, and pushing sales into December.

The new rule imposed by the Consumer Financial Protection Bureau (CFPB), termed the “Know Before You Owe,” or the TILA-RESPA Integrated Disclosure regulation, requires the lenders to provide consumers with the combined Closing Disclosure (CD) that includes all charges, fees and line items three days before closing instead of at closing. Parsons said some borrowers are paying $300 to $500 to hold the interest rate longer.

“We’ve got more moving parts than ever before. And if a loan estimate isn’t perfect down to the penny, then the loan gets re-disclosed” and the closing gets delayed, he said. He noted in one case, because the loan disclosure rules are lengthening the time to close, the developer is threatening to charge $500 a day for each day the deal is not finalized.

The three-day period was to allow borrowers time to examine loan documents instead of potentially being surprised at closing with fees hidden by unscrupulous lenders, title companies or brokers.

Benjamin Niernberg, a title insurer with Proper Title in Northbrook, Illinois said 25 percent of the 250 home loan closings for new purchases he handles in a month had to be rescheduled, well above the three to four percent of the loans that were postponed before the new rule took effect.

In a response to a question from marketwatch, the CFPB said “We have devoted considerable resources to help the industry come into compliance. We expect as (the) industry continues to adapt to the new changes, future closings will be increasingly timely.”

Proper Title’s Niernberg, saying by early next year the delays in closing will be but a memory, said, “Has TRID been disruptive? Sure,” he said. “Was it worse than we thought? No.” ##

(Image credit: CNNMoney)

Article submitted by Matthew J. Silver to Daily Business News-MHProNews.