UPDATED: TRID rules have improved consumers’ ability to learn more about mortgage transactions, CFPB reports

Consumers’ have improved their ability to locate key mortgage information, compare terms and costs between initial and final disclosures and compare terms and costs across mortgage offers through real estate transaction disclosure rules, according to the federal consumer financial protection agency.

In the report, the Consumer Financial Protection Bureau (CFPB) also said evidence “leans positive” (although mixed) regarding whether the rule improved consumer understanding of forms.

The assessment of the TILA-RESPA Integrated Disclosure rule (TRID), CFPB said, found that the rule has made progress toward several of its goals. In addition to improving consumers’ ability to find key information, the bureau said in a release, the report found either no change (or relatively short-lived changes) in such measures as interest rates and origination volumes around the rule’s effective date.

On the other hand, the report found, the TRID rule did result in big implementation costs for companies. “Firms also reported increases to their ongoing costs; however, it is unclear if these increases are due to ongoing trends or if these increases can be attributed to the Rule,” the bureau.

The assessment was directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), which requires CFPB to assess significant rules or orders adopted under federal consumer financial law.

Also on Thursday, CFPB released results of one of its “Data Point” studies, which examined how terms and costs of a mortgage loan may change during the origination process as reflected in the “Loan Estimate and Closing Disclosure” forms provided to borrowers pursuant to the TRID Rule.

According to the bureau, data analyzed for about 50,000 mortgages showed:

• Almost 90% of mortgage loans involved at least one revision;
• 62% received at least one revised Loan Estimate;
• 49% received at least one corrected Closing Disclosure.

Also, CFPB said, the study found that most changes in loan terms between the first loan estimate and the last closing disclosure varied greatly across loan terms. That is: APR changes occurred in more than 40% of mortgages; loan amount and the loan to value ratio changed for almost 25% of mortgages; and interest rate changed for 8% of mortgages.

Integrated Mortgage Disclosures Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) Rule Assessment

Data point: How mortgages change before origination