Real estate practitioners should expect changes in contracts
The Research Department of the National Association of Realtors® surveyed members in August about their awareness and preparation for the changes in residential closings being implemented by the Consumer Financial Protection Bureau in October of 2015. The most dramatic change is eliminating the current disclosure forms in favor of a Loan Estimate and Closing Disclosure, collectively called the TILA RESPA Integrated Disclosures (TRID).
The results of the survey were detailed in an Executive Summary entitled “TRID: REALTORS® and the New Closing Process”.
The best news from the report is that 71.2% of the respondent members rated their level of preparedness as average or better. Many stated they are taking action and working with their industry partners to prepare for a smooth transition. More than 80% of respondents indicated they have taken some form of TRID training.
Dirt lawyers should expect to see changes in residential form contracts. More than half of respondents indicated they will adjust contracts to reflect longer closing time frames, and almost a third indicated they plan to adjust contracts to include new contingencies.
Take a look at the following chart for more information on how Realtors® plan to deal with the new rules.
Although it is anticipated that the changes may introduce new burdens on lenders, closing attorneys and REALTORS®, many of the respondents indicated the number of delayed closings has been low in the past, and they will continue to work with their industry partners to help make the transition smooth.
Real estate lawyers who have not reached out to their REALTOR® contacts should do so soon and often to assist with the transition!