Magazine article Mortgage Banking

False Alarm

Magazine article Mortgage Banking

False Alarm

Article excerpt

TO SAY THAT THE MEMBERS OF THE CHICAGO-BASED NATIONAL ASSOCIATION of Realtors[R] (NAR) are a loud and vocal group is something of an understatement. Any issue that ruffles their feathers brings an uproar of thunderous proportions. [paragraph] So if the Truth in Lending Act (TILA)-Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure (TRID) rule has caused closings to be delayed by even a few days, it stands to reason they'd likely be among the first ones screaming to NAR staff or their legislators in Washington. But they haven't, according to staffers and key officers who spoke at NAR's 2015 Realtors Conference & Expo in San Diego in mid-November. As far as they are concerned, the Consumer Financial Protection Bureau's (CFPB's) Know Before You Owe initiative could easily be called Much Ado About Nothing.

"It's been a non-event," said NAR Chief Economist LAWRENCE YUN. "Realtors are a vocal bunch. They will tell us immediately if something is wrong ... but so far, we haven't heard much at all."

In the RESPA-TILA Know Before You Owe Rule: Regulatory Issues Forum at the NAR conference in November, KAREN CROWSON, chair of the Regulatory Issues Forum and an agent with Crye-Leike Real Estate Services in Benton, Arkansas, told the audience, "Loans are closing with very little disruption." And MARIA LAU, sales division manager of Waco Title in Waco, Texas, said, "A lot of people are in denial. Loans are closing. Some go out a little further, but we're still here. We'll get through it."

Even some people from the mortgage sector wondered what all the fuss was about. JONATHAN CORR, president and chief executive officer of Ellie Mae, Pleasanton, California, said on an economic out-look panel at the NAR conference that, "in the short term," loans may take a bit longer to close. "But at the end of the day," he added, "Know Before You Owe will have a huge benefit.... Closing will be a better experience for all involved."

And DON CHIESA, vice president of national loan production at Quicken Loans, Detroit, said he has seen "only a minimal amount of added times" to the 3,800 loans his company has closed since the new disclosure rule took effect Oct. 3.

(Similarly, Chicago-based mortgage firm Guaranteed Rate Inc. issued a statement in late November saying its closing times haven't been hampered by TRID. "We were ready for the TRID implementation and it has not slowed us down at all," said President and Chief Executive Officer VICTOR CIARDELLI. "Our loan officers have continued to close loans in less than 30 days.")

Kicking off the NAR conference, meanwhile, ED GOLDING, Federal Housing

Administration (FHA) principal deputy assistant secretary, Office of Housing, told a packed ballroom at the San Diego Convention Center about changes in the FHA's condominium policies. His remarks came a day before the FHA published its new guidelines.

Just in case you missed it, the new rules--which are temporary--streamline the agency's condo recertification process and expand the eligibility definition of "owner-occupied" to include units that are not investor-owned second homes. The new regs will expire in one year.

Also during the NAR conference, Ellie Mae's Corr said the next major shift coming to the real estate sector "will be demographic, not regulatory."

Noting that 80-odd million millennials "are just entering their home-buying years, with marriage and children on the horizon," Corr told the Realtors that they and everyone else connected with home buying must be connected electronically if they hope to survive.

"In the next five years, everything will be done electronically," he said. "You must think like a millennial so they can access the process when they want, how they want and when they want. You have to be able to respond to them on their terms."

Yun said he expects the Fed to raise the Federal Funds Rate eight to 10 times over the next two to three years, but the jumps "are nothing to worry about. …

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