In a recent speech, the CFPB’s Richard Cordray indicated that the mortgage industry’s concerns about TRID are overblown. He stated that 2015 mortgage application rates are actually higher than the last year:
“Reports from participants across the market seem to be indicating that implementation of the new rule is going fairly smoothly. So it seems that these anxieties were much like the errant predictions of technological disaster stemming from Y2K, which of course never materialized,” said Cordray.
TRID Violations Impact: A Different Perspective
A survey conducted by Moody’s Investor Service, however, shows a different view of TRID’s impact on the industry. The survey found that 90% of loans submitted after the TRID implementation had compliance violations directly related to the rule. While many of the violations were small and technical in nature, such as the inconsistent spelling conventions or misuse of a hyphen, a violation is still a violation, regardless of size.
Avoiding TRID Violations Before the Closing Table
The surveyors expect the number of technical violations to decline in the coming months as the industry adjusts. One way to minimize technical mistakes is to have all parties collaborate on one mortgage file. With all critical information in one centralized location, and all participants on the file looking at the same set of data, technical violations are more likely to be caught before being submitted.
TRID Liability Danger
The technology currently being used by most lenders doesn’t function in ways that will achieve full compliance. Even after 20 extra months of time to prepare, the industry still wasn’t prepared for the rule and the way in which it would change day-to-day operations. One of the biggest changes TRID brings is incorrect settlement fees now carry higher assignee liability. The transfer of liability to investors is real and the investors are now realizing that.
Whether or not concern about TRID implementation has been overblown, the fact remains that the industry is drastically different than it was before the rule’s implementation.
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