WASHINGTON (10/15/15)--Mortgages dipped by 27.6% from the week before to the week after the effective date of the Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosures (TRID) rule, according to the Mortgage Bankers Association (MBA).
Its weekly mortgage applications survey for the week ending Oct. 9 showed the decrease in the Market Composite Index, a measure of mortgage loan application volume.
“Application volume plummeted last week in the wake of the implementation of [TRID], which caused lenders to significantly revamp their business processes, and as a result dramatically slowed the pace of activity,” said Mike Fratantoni, MBA chief economist. “The prior week's results evidently pulled forward much of the volume that would have more naturally taken place into this week.”
The findings confirm what most of the mortgage industry has said leading up to TRID’s implementation, and what many said in a hearing conducted by the House Financial Services subcommittee on housing and insurance in May.
During the hearing, mortgage lenders, title companies, realtors and academics testified that the rule was the biggest regulatory change to the mortgage market in decades. Another witness said the lack of a test period and delays in updating the Mortgage Industry Standards Maintenance Organization data elements did not allow for stakeholders to test their compliance.
CUNA urged the Consumer Financial Protection Bureau on numerous occasions to provide a hold-harmless period that would protect lenders from litigation and enforcement.
CUNA also supports a bill, the Homebuyers Assistance Act (H.R. 3192), that would put such a hold-harmless period in place through Feb. 1, 2016. The bill passed the House last week.