New data from the Mortgage Bankers Association (MBA) shows that total mortgage applications decreased 27.6 percent from the previous week as a result of CFPB’s TILA-RESPA integrated disclosures (TRID) rule, which became effective on October 3rd. Additionally, the Refinance Index dropped 23 percent over this period. These figures reflect applications filed through the week ending October 9th. 

The MBA weekly mortgage index surveys 75 percent of all U.S. residential mortgage applications and samples mortgage bankers and commercial banks and thrifts.

“Application volume plummeted last week in the wake of the implementation of the new TILA-RESPA integrated disclosures, which caused lenders to significantly revamp their business processes, and as a result dramatically slowed the pace of activity,” said Mike Fratantoni, MBA's Chief Economist. “The prior week’s results evidently pulled forward much of the volume that would have more naturally taken place into this week.”

Fratantoni also stated that the days following TRID implementation marked the first time since February 2015 that weekly purchase volume demonstrated a year over year decrease. He added that the drop in refinance volume occurred despite minimal changes in mortgage rates.

The final TRID regulation marks a three-year rulemaking effort by the CFPB to consolidate existing real estate disclosures required under TILA and RESPA into two forms for consumers, a Loan Estimate and a Closing Disclosure. In June, the CFPB proposed pushing back the rule’s originally scheduled implementation date from August 1st to October 3rd.

Sources: “Mortgage Applications Decrease in Latest MBA Weekly Survey." Mortgage Bankers Association (October 14, 2015)

“Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (Regulation X) and the Truth In Lending Act (Regulation Z).” Consumer Protection Financial Bureau