One example of the continuing troubles caused
by the TRID consumer-disclosure regulations is
that even though TRID has been through three
revisions, the recently finalized amendments
published by the Consumer Financial Protection
Bureau (CFPB) still did not address the so-called
“black hole” that prohibits using the Closing Disclosure to reset fee tolerances. This continues to
generate frustration in the industry.
All the frustration with TRID has done one
good thing, however: It has driven more lenders
and mortgage companies toward adopting
automation than any other regulation. This
automation also should help smooth out TRID’s
ongoing rough spots — of which there are
bound to be more.
downpayment and related assistance loans by
excluding recording fees and transfer taxes from
the fee limitation that applies to the exemption.
Amid these changes, timely and accurate
delivery of the Loan Estimate (LE) and Closing
Disclosure (CD) to borrowers remains the main
challenge the mortgage industry faces in com-
plying with TRID. By now, most companies have
leveraged automation to deliver disclosures with-
in the required timelines specified under TRID.
What’s more, by implementing the right mix
of technology to deal with TRID, many mortgage
companies have improved their communication
with borrowers and among their staff. Ultimately,
this leads to increased borrower satisfaction and
fewer complaints — which is critical because the
CFPB monitors its Consumer Complaint Database
specifically for TRID violations.
As is the case with most financial regulations,
however, TRID is likely to see additional amendments and clarifications over time. As such,
mortgage companies and their technology partners must be ready to adjust their systems to
accommodate minor “tweaks” in the rules and
how they are interpreted.
Looking forward, timeliness and accuracy
of fee data, plus workflow automation, are two
important areas where technology will play a
crucial role in helping the industry achieve TRID
compliance, while at the same time improving
the borrower experience.
the right mix of
deal with TRID,
Timeliness and accuracy
One of the biggest ongoing challenges faced
under TRID is fee accuracy in both the LE and CD.
This is particularly true on fees for credit reports,
titles, appraisals and recording. The problem is
there are often many additional fees that may
be required during the process, such as a credit
supplement, additional appraisal work or even a
What’s more, there could be sudden changes
to a loan program that require fees to be recalu-lated and updated. Through automation, these
changes in fee data can be applied nearly in real
time to the disclosure documents, thus ensuring
compliance, speeding the process and reducing
the risk of human error.
It is important that mortgage companies use
the right technology for automating changes in
fees, however. If an automated system creates an
error, and that error is repeated across multiple
loans, a company and its originators could quickly have a catastrophe on their hands.
On the other hand, when a system performs
consistently (i.e., it always delivers disclosures
in a timely manner and with accurate data), it
reduces errors and the risk of noncompliance,
including penalties and fines. In other words, it
pays for itself.
Need for automation
Although the recent set of amendments to TRID
didn’t appear to increase regulatory risk in any
significant way, mortgage companies must
nonetheless come to grips with the changes.
As we’ve seen, failure to adhere to TRID can
result in significant penalties.
Among the current revisions, the CFPB has
established tolerances for the total of payments
disclosure; changed the scope of TRID to cover
loans on cooperative units; and provided clarification on how to provide separate Closing Disclosures to borrowers and sellers. The bureau
also updated the partial exemption for certain
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