Buying a house may not be more complicated than it needs to be, but there is certainly room for improvement when it comes to accurate information. According to the Consumer Financial Protection Bureau (CFPB), 53% of the complaints it receives related to mortgage loans focus on inaccurate information about mortgage settlement, and another 32% center on inaccurate loan servicing, payments and escrow accounts.
In a new post at its Insights blog, CoreLogic said that in its most recent survey of consumers’ experiences getting a mortgage, nearly half say they are only “somewhat familiar” with amounts required at closing. The percentage goes up for first-time buyers.
When the new TRID procedures went into effect in October last year, mortgage processing slowed way down, and depending on who you ask, the fault lies with the new regulations or with mortgage servicers and escrow companies. (TRID is an acronym for two other acronyms: the Truth in Lending Act is known as TILA and the Real Estate Settlement Procedures Act is known as RESPA; together TILA-RESPA Integrated Disclosure is TRID).
CoreLogic’s Dominique Lalisse noted:
It’s easy to see how these inaccuracies on annual tax estimations are driven by the lack of standardization in the origination and underwriting processes. From the moment a home is put on the market until the time the new homeowner’s mortgage is being serviced by the lender, up to six annual tax estimates are being completed with different levels of accuracy.
To underscore that point, Lalisse cited a survey by one major national lender showing that about 12% of all loans will require a change in yearly escrow payments of $250 or more due to inaccurate tax estimates. And when costs rise unexpectedly, so does customer dissatisfaction, predictably.
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