Pending changes to mortgage disclosure processes that take effect Oct. 3 may require additional time beyond the typical 30-day loan closing and corresponding interest rate lock. The TRID—which is the Truth in Lending Act and Real Estate Settlement Procedures Act integrated disclosures—includes a new Closing Discloser form that replaces the existing HUD-1 settlement statement. Unlike the current HUD-1, the Closing Disclosure must be finalized and in possession of the borrower three days before closing.

That additional time, plus the eight to 10 days already built into the timeline for mailing forms, may constrict the ability for lenders to operate within a 30-day period.

These new timing requirements, which will be supervised by the Consumer Financial Protection Bureau, suggest that lenders may need increase rate locks and closings by up to 15 days, or longer.

A longer rate-lock period may increase costs paid by borrowers to offset the lender’s costs of locking in an interest rate.

“A 30-day loack at the time of application will likely not be sufficient in many cases, but a 45-day lock may be more expensive,” said Richard Andreano, a partner at Ballard Spahr. “We’ll have to wait and see what lenders do with lock periods.”

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