For much of the past 18 months, the mortgage industry has been solely focused on one thing—TRID. And although the TRID deadline has come and passed, the industry is not quite finished with the recent guidance. Just when you thought it was safe to get back in the water, the CFPB has reopened its TRID rulemaking.
According to a letter sent by Director Richard Cordray on April 28 of this year, the CFPB intends to revisit rulemaking for the TILA/RESPA Integrated Disclosure (TRID) rule, specifically around the Know Before You Owe mortgage disclosure forms. In addition, the Bureau announced the Notice of Proposed Rulemaking will most likely be issued in late July 2016.
“We recognize that the implementation of the Know Before You Owe rule poses many operational challenges. We also recognize that implementation is particularly challenging because of the diversity of participants, from small to large financial institutions, mortgage brokers, real estate brokers, and title companies, through warehouse lenders, investors, due diligence firms, and rating agencies, whose perspectives may vary as to what compliance under the rule requires. The Bureau continues to work very hard to understand your concerns so that we can find the most effective solutions. Our cross-Bureau team meets weekly to discuss industry feedback and identify appropriate responses and, as you know, has near-daily interactions with external stakeholders to identify issues and questions. We continue to seek your active engagement in providing us with concrete information about technical problems. Although anecdotal information helps frame a picture of the issues, detailed and precise information is most helpful and will enable us to understand fully the concerns and evaluate how to best provide guidance.”
Per the Bureau’s announcement, the new rulemaking will likely incorporate pieces of informal guidance, such as existing webinars, into the new rules. Why? The Bureau (as well as the rest of the industry) is hoping that this will help to clear up many of the gray areas, such as the use of the Closing Disclosure to reset tolerances after a changed circumstance.
While many in the industry do not anticipate large scale changes to the rule, the new rule making appears to be an acknowledgement by the CFPB that the industry does, in fact, need added guidance that can be relied upon to add certainty to the process. Although informal guidance has been available thus far in the process, it does not carry the same clout as the rule or the official staff commentaries. By bringing greater certainty to some of the more ambiguous areas, we may finally see many lenders’ fears calmed and gain some much needed stability within the secondary market with regard to TRID compliance.