A February survey conducted by Callahan & Associates revealed more than 96% of credit union executives experienced mortgage closing delays over the past six months. Respondents reported the average number of days to close was 42, up from the ideal average closing goal of 31 days.
The survey evaluated the impact of TRID on more than 200 credit unions from 46 states. A small portion of executives reported no delay in closing at 3.9%, while more than half reported an additional five or more days were added to their mortgage closing times.
The four main reasons for the closing delays included new lender workflows between the title company and members, as well as a refinement of procedural processes for 51.5% of respondents. More than 26% reported compliance as the primary reason for delays.
Further, 16.2% said closing delays were due to their mortgage loan origination and core processing systems not being fully equipped to handle necessary updates, and 6.1% said the delays resulted from members being unable to provide necessary documentation and other information in a timely manner.
Nearly 80% said they were able to deliver disclosures quickly without any issues, while slightly more than 20% said they deliver closure disclosures three days before the mortgage closing. The survey said the delivery delay could be the result of several variables, including settlement collaboration, system and member delays, as well as extra precautions being taken to avoid TRID violations.
Portfolios and the secondary market played significant roles in the origination process for most respondents. The vast majority – 83.3% – of respondents said they originate loans to hold in their portfolio. But more than half – 66.9% – also actively originate for sale to government-sponsored enterprises. A minority of respondents – 11.3% – said they solely originated for sales to GSEs.
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