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).
After nearly nine months of watching lenders struggle to fully implement the TILA-RESPA Integrated Disclosures (TRID) regulations that went live in late 2015, the Consumer Financial Protection Bureau (CFPB) released a series of proposed amendments. While there are no large individual changes, depending on a business’s practices, there are several small tweaks that could greatly impact the lender’s processes and procedures.
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.
Consumers and regulators are pushing for mortgage transactions with less paper, more electronic signatures and the higher customer satisfaction that comes along with them. One challenge has been the need to keep the Loan Origination System (LOS), the lender’s database of record, in sync with the document vendors that supply modern electronic disclosure and closing documents. That’s changing now that innovative doc prep software is making it easier to accomplish a two-way LOS data exchange.
It’s already been seven months since the Truth-in-Lending/Real Estate Settlement Procedures Act Integrated Disclosures (TRID) went into effect. Many lenders were adequately prepared for the changes by integrating new technologies within their organizations. However, many lenders are still struggling to adjust to the “new normal” that is TRID compliance.
Five months after the CFPB’s TRID rules went into effect, mortgage lenders across the country are still struggling with how to best manage the changes. Outside of the physical changes to the documents, the biggest impact has been in the waiting periods mandated for both the initial “good faith” estimates and the closing costs disclosures.
The rules are well known by now – a three-day requirement for all loan document disclosures and a seven day advanced notice for all material changes to the Loan Estimate. Closing delays due to disclosure errors can be extremely costly – impacting realtor relations and the ability of a homebuyer to move in and maybe even own the home if the rate locks and the deal falls through because of mistakes.
