Is Housing Gaining Traction?

In the News   Presented by Prairie Title  

June 1, 2016         

TRID Bumps along; Housing too 

By Frank Pellegrini, Prairie Title CEO 

I find it informative to follow the voices of those in the media who really know real estate inside and out. Two of those real estate media pros, Ken Harney and Diana Olick, are typically spot on in their assessments of the market and real estate industry issues in the short term and the long run. 

Harney, syndicated by the Washington Post, recently wrote an article whose premise was that implementation of TRID is delivering mixed results for professionals and consumers. He noted:

“A new study gauging consumers' experiences before and after the new rules took effect suggests that things may be looking up. It found that 92 percent of buyers are taking time to review their mortgage documents in advance of the settlement — making use of the three days they're now allotted to do so.” That study was conducted by the American Land Title Association. 

Citing another survey, Harney said, “Buyers also were pleased by being encouraged to shop for settlement services such as title insurance.”  I was especially happy to read that. We are actively encouraging consumers to shop for title services and I’m glad that approach is taking root. 

Lenders fees have increased to cover the additional costs at their end, and the average time to closing has increased (and now stabilized). For consumers, Harney’s bottom line was: “Be aware of the pluses and minuses of the rule changes. Expect greater transparency about costs — and more time to check them out — but also maybe a little longer time to close and increases in fees.” 

Olick is a featured reporter on CNBC who writes about day-to-day real estate activity more than the longer term trends Harney typically dives into. She is a great resource for the facts and figures that drive the trends in the industry. Among other analytics, she has recently focused on pending home sales, the shortage of existing homes for sale and the driving forces behind increasing mortgage applications, pointing out the fits and starts we continue to experience as housing bumps along. 

We regularly Tweet Harney’s and Olick’s observations and I would encourage you to follow them as well. Or simply follow Prairie Title on Twitter and we’ll provide that information for you.

Other stories we’re following:

Who’s Afraid of TRID risk?                                    Housing Prices Increase more than Expected.

 

Home Buying Drives Mortgage Apps.                         ommercial Sales Subdued in First Quarter.             

Notes from Boston

Mary and I are just back from the annual American Land Title Association Convention, held in Boston this year. Two topics were top of mind for title insurance professionals as we gathered from across the country: TRID and outreach to homebuyers.

As far as TRID is concerned, we’re now a week past the implementation date, and new loans are being processed under the new rule. In the title business, most of us are still awaiting our first new Closing Disclosure Forms as lenders work their way through the new process. Most of the talk about TRID at the convention revolved around potential issues that title underwriters and agents feel might be coming down the pike and efforts in Congress to institute a formal grace period for those moments when good faith efforts fall a little short.

The House of Representatives passed the Homebuyer Assistance Act in veto-proof, bipartisan fashion last week, and we hope the Senate will follow suit soon. While the White House has threatened a veto, let’s hope that the President will relent when the bill reaches his desk, or at least the Senate also passes the bill with a veto-proof majority. Asking Washington to institute a grace period is not asking for special treatment. Lenders, attorneys and title industry members simply want to be able to implement the new rule as seamlessly as possible in the coming months without being overly concerned about daunting repercussions for honest mistakes. 

I urge you to contact your senators in support of this bill. As third in command of Democrats in the Senate, Illinois Sen. Dick Durbin is a particularly crucial leader to get on board.

Regarding consumer outreach efforts, ALTA is urging members to get more deeply committed to educating home buyers and sellers about the residential real estate process. There is growing awareness that consumers in the coming years will increasingly be making decisions regarding vendors throughout the transaction process. Arming them with comprehensive, easy-to-understand information is a first step in helping consumers make good choices.

Take a look at ALTA’s homeclosing101.org web page and direct your customers to the page for more information about our industry. The Realtors’ and Mortgage Banking Association’s web sites also have consumer-oriented educational tools. Better consumer outreach is critical, I believe, as members of the home-buying public become more sophisticated in their approach to the residential real estate process. Let’s help them get there.

Questions, comments? Please post your thoughts for all to see and respond to. 


Frank
 

Educating the Consumer

For a long time I’ve been perplexed by the self-imposed silence the title industry practices when it comes to home buyers and sellers. In our business, virtually all of our outreach efforts have been aimed at intermediaries (attorney, lenders and brokers) rather than the people whose lives are actually affected by the real estate transactions we process for them.

We let others do our talking for us – typically we don’t talk to consumers until they are across the closing table from us – yet we offer products and services that are invaluable to those very consumers even if they don’t realize it. With TRID implementation around the corner, we have a great opportunity to change that dynamic.

To quote an article by author by Nancy Tarr posted on Housing Wire.com, "Consumers have always looked to real estate professionals for help understanding how to buy and sell a home. Traditionally, real estate agents and brokers have led consumer education efforts, and they will continue to play a leading role. But, it’s clear that lenders, as well as title insurance and settlement service providers, will need to play a larger role in helping home buyers and sellers understand the new residential real estate environment."

The American Land Title Association just released a revised, expanded and updated Closing 101 web site specifically created to offer consumers in-depth information about the home buying/selling process. And with electronic closings coming, it is even more imperative that we ramp up our efforts to educate consumers.

I’ve given a great deal of thought to this idea over time and I believe that now is the time to move toward a new communications model for the industry. We’ve been using web sites and social media to provide information directly to consumers with some success, but we need to couple our social media efforts with direct outreach to consumers through new and traditional media as well as other means of connecting.

What do you think?

Post a comment and let’s discuss the future of communications in the real estate industry.