time to close

March Marks Modest TRID Progress

Lenders appear to have stabilized the TRID impact and edged toward improvement, but substantive delays linger. With a busy spring market looming on the horizon, their efforts may pay dividends when higher volumes come.

The average time-to-close as measured in days fell from 43.3 in January to 39.9 in February. However, this decline reflects seasonal variation. Relative to the same time in February of 2015, the time-to-close was 5.1 days higher reflecting TRID-related delays. The February year-over-year increase under TRID was a decline from the 5.2 additional days in January and the 5.7 day peak registered in December.

time to close

There was a shift in the distribution of closing from January to February that was in-line with typical seasonal variation. Comparing February of 2016 to the same period last year, which accounts for seasonal variation, there was a small improvement. The share of settlements that took more than 45 days rose from 36.7 percent in February of 2015 to 45.1 percent in February of 2016, an increase of 8.4 percentage points compared to a year-over year difference of 8.8 percentage points last month. At the other end of the spectrum, the share of settlements that took less than 30 days fell by 8.6 percentage points to 23.7 percent in February compared to a year-over-year decline of 8.3 percentage points in January. Thus, a small share of under 30-day settlements look longer while a slightly larger share of the over 45 day settlements were shorter and the middle portion of the distribution absorbed both, rising 0.1% on a year-over-year basis, an improvement from the 0.6 percent decline last month.

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This month’s reading was a mixed bag with modest improvement at the long-end of the settlement distribution and some erosion at the short end. As a result, the average time-to-settle improved modestly. Still this modest gain is progress and the abnormal delays are limited to about 8.5 percent of the market. Lenders will be pressed as volumes rise through the spring and summer months. REALTORS® should seek out lenders who are collaborative and who have successfully navigated TRID without delays to assure smooth settlements in 2016.

Ken Fears, Director, Regional Economics and Housing Finance

Ken Fears is the Manager of Regional Economics and Housing Finance Policy. He focuses on regional and local market trends found in the Local Market Reports and the Market Watch Reports . He also writes on developments in the mortgage industry and foreclosures.

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