Now that Thanksgiving is over, few things strike fear into the hearts of the mortgage industry more than the Consumer Financial Protection Bureau (CFPB) and the new TILA-RESPA Integrated Disclosure (TRID) rules that went into effect on October 3, 2015.
While the grace period for enforcement may extend into the new year—many expect March 2016, which is six months following the October 2015 deadline—mortgage servicers have been trying to address TRID since it was first announced a year ago.
The Road Ahead
Because TRID just took effect, not many mortgages have gone all the way through closing. Mortgage volume went up in the first week of October but have nosedived since. This could be because many are still figuring out the process but also because the first week of any month is more common for applications. Both lenders and servicers have also been waiting for loan origination software (LOS) and loan servicing software (LSS) vendors to get up to speed to enable their processes, and that's been a bumpy road.
Once the TRID grace period ends, perhaps an even bigger deal will be on what side of the fence investors land. TRID itself doesn't require a loan estimate or closing disclosure to be signed by borrower, but many investors do and require a wet signature or won't purchase the loans. Because only a handful of loans are starting to close, it's expected that we'll start to see investors publishing bulletins on correspondent lending in November and this month.
Whatever the case, it's important to focus on what we know and what can be done about it now.
How to Ensure TRID Servicing Compliance
The biggest challenge is that many mortgage servicers don't know what TRID guidelines they need to follow and/or they don't have the resources to do so. That is why we wrote our new Mortgage Servicing QC Requirements whitepaper, which discusses the following:
- What these mortgage servicing QC requirements are
- Proven methods that will minimize your risk of incurring CFPB fines
- Best practices around implementing a new servicing QC program