While the proposed changes to TRID are certainly generating a lot of attention from lenders planning their 2017 compliance priorities, there are several other developments lenders should keep an eye on. These other regulatory issues affect not only the documents used in applications and closings, but also in reporting the annual loan data required by the Home Mortgage Disclosure Act (HMDA).
By preparing now, lenders and their technology partners can ensure that there are no obstacles to smoothly rolling out the new requirements.
Updating the Uniform Residential Loan Application
One of the biggest changes impacting the documents a lender manages is an update to the Uniform Residential Loan Application. Fannie Mae and Freddie Mac have finalized a new application that will be effective in January 2018. The change is made in conjunction with the new Uniform Loan Application Dataset, along with the updated automated underwriting system datasets from the GSEs.
The changes are designed to make the 1003 easier for borrowers to complete by making the document easier to read. It also eliminates old information that is no longer required or relevant and it also adds new fields that are needed to support compliance with the new HMDA rule regarding reporting of borrowers’ race.
The changes to the application are substantial, and lenders will have to work with both LOS and document providers to update data fields and ensure the new documents can be implemented. Additionally, lenders who opt to begin using the form in 2017 will need to ensure that their document provider supports the new application.
States Falling in Line with Federal Disclosure Laws
One of the side effects of the major changes coming from the implementation of TRID is that state laws have not always been able to keep up with the changes at the Federal level. In 2017, we expect to see more states updating their disclosure requirements to make them consistent with the TRID rule.
One of the most confusing issues is that many state codes still have code provisions that make reference to the old pre-TRID code sections. There are also model forms promulgated by state agencies that are based on the old TIL/RESPA concept. For example, the California RE-882, 883 and 885 forms are still based on standards from prior to 2010, which leaves lenders in the state forced to produce multiple sets of documents to comply with both federal and state law.
For most lenders, these changes will make business easier to manage as more states fall in line with the national standards. Docutech works closely with each state to ensure that all relevant documents are updated and compliant with all laws.
To learn more about how Docutech is keeping its customers prepared for all new regulatory changes – including TRID 2.0 and the URLA – request a demo or visit our resource center.