ATS Secured hosted a webinar today featuring Andy Arculin entitled: “Mortgage Investors: the Real Regulators.” This webinar focused on what types of loans mortgage investors are looking for on the secondary market and detailed what organizations need to do in order to sell their loans after October 3rd.
Andy noted that TRID will affect everything in the mortgage process from application to close. Despite it being an extremely complex rule, the Consumer Financial Protection Bureau (CFPB) is leaving many unanswered questions on the table as for how to implement it. Taking into account the manner in which they’ve done things in the past, they will most likely honor good faith efforts to comply.
Mortgage Investors, However, Will Need Some Convincing.
However, Andy cautioned, investors will not wait for the CFPB to resolve unanswered questions or consider good faith efforts to be proficient. They will want trustworthy business partners and clean loan files.
“This goes beyond legal exposure,” Andy said, “Investors don’t want to do business with lenders who may hurt their business. Fear of reputational damage is very real.”
Beyond legal risk like unanswered questions about TRID, assignee liability and ongoing concerns about UDAAP, investors are also worried about messy loan files/unclear evidence of compliance, guilt by association and consumer-harmful behavior.
Because of these concerns, investors are taking a conservative view of what is allowed under the rules. They are unlikely to permit consumers to waive the timing requirements or allow tolerance re-baselining if closing is delayed after the Closing Disclosure is provided. They will also most likely limit last-minute changes to the transaction because of liability concerns.
Best practice for working with investors:
- Address any areas of disagreement as soon as possible
- Familiarize yourself with guidelines and rep/warranty requirements now, know them as well as investors do
- Be proactive—do not wait until an issue arises
- Keep an eye on industry peers and other investors that may have reached similar conclusions
- If investor guideline is over-conservative, seek a legal opinion and communicate with them
Investors are not technically the law, but if you want to sell an investor the loan they trump the law. To make your loans attractive to purchasers, it is important to think beyond the rule and above even the CFPB’s standards.
Want to make your mortgage process easier and more accurate? Contact ATS Secured today.
Interested in learning more from this webinar? Download the full webinar, complete with Q&As, today!