Did loans take an unusually long time to close in November, or was that simply your imagination? You probably didn’t dream it up.

  • The time to close a loan rose slightly in November compared to the same period last year -- by about four days.
  • The increase could be related to a busy September and October selling season, with many of those contracts closing in November, as well as the aftereffects of rising mortgage rates, spurring buyers and refinancers who may have been dragging their feet.

Did loans take an unusually long time to close in November, or was that simply your imagination?

You probably didn’t dream it up.

Although real estate closings haven’t been the 45-day odyssey some expected them to be following the October 2015 launch of the Consumer Financial Protection Bureau’s (CFPB) TRID (aka the “Know Before You Owe”) rule, the time to close a loan rose slightly in November compared to the same period last year, according to ongoing research by the National Association of Realtors (NAR).

Year-over-year change in time to close

Year-over-year change in time to close

The trade association shared this surprising finding this week on realtor.org as part of its ongoing analysis of how the sweeping mortgage industry regulation, also known as the TILA-RESPA Integrated Disclosure, or TRID, rule is affecting the business of real estate.

‘Add 15 days to closing timelines’

In the two-year lead-up to TRID’s implementation on Oct. 3, 2015, NAR had advised its members to expect to add at least 15 days to their customary closing timelines to accommodate for the rule’s various disclosure and delivery deadlines, fee tolerances and any last-minute snafus that might require a total reset of the process.

Some compliance experts and industry leaders, however, said the new closing process could take up to 45 days to complete, especially as mortgage, real estate and settlement service providers adjusted to the new requirements and ironed out the kinks in their software and employee workflows.

The delays proved to be much less of a pain point for real estate agents than expected, with NAR reporting that the twelve-month average time to close was about 36.7 days in November 2015, the first full month following TRID implementation.

image-22

Why aren’t closing times shrinking?

However, although one might expect closing times to continue to shrink as the industry gets more comfortable with the post-TRID world, this does not seem to be the case, according to NAR’s analysis.

The twelve-month time-to-close in November of this year rose to 40.5 days, about four days longer than the same period last year.

This is “a surprise relative to the recent easing pattern,” said Ken Fears, NAR’s manager of Regional Economics and Housing Finance Policy.

So what happened?

Fears said the increase could be related to a busy September and October selling season, with many of those contracts closing in November, as well as the aftereffects of the presidential election, when mortgage rates rose nearly 50 basis points, spurring buyers and refinancers who may have been dragging their feet to move into the market.

“These delays should ease in the coming months as refinance volume eases and as lenders continue to adapt to the new settlement process, but a longer average time-to-close may be part of the new normal,” Fears said.

Email Amy Tankersley

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×