“Wholesale is a weak link in the [CFPB] rule, because the rule says the least about the interaction that exists between the wholesale lender and the mortgage broker.”
Since implementation, it has become increasingly apparent that TRID is especially difficult for wholesale lenders to interpret. Due to the lack of communication and standards on how mortgage brokers and wholesale lenders should interact to remain compliant, lenders have adopted their own interpretations of what the rule means for their business.
Brokers often work with multiple lenders, all of which may have different processes to evaluate loans due to lack of clarification in the rule.
“…if the wholesaler spots errors regarding fees in the Loan Estimate it can bring the process to a halt. In some cases, he said, after the broker has approved a borrower’s application the wholesale lender will reject the loan over errors in the disclosure, forcing the broker to shop for another wholesaler to close the loan.”
In addition, there are often instances where brokers provide information that doesn’t align with a lender’s pricing. With so much confusion on what TRID means for both brokers and wholesale lenders, it is going to take time to adapt to the rule.
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