Now that TRID has been in effect since October 3, 2015 (with the grace period for enforcement having ended in March 2016), we now have over six months of data on findings based on the pre-fund and post-close quality control (QC) audits that we perform.
Because of the new formatting required by TRID, the industry is having a hard time with capturing and displaying information, such as getting documentation in the file, following up with the title, having the loan origination system (LOS) accurately track dates and timing requirements, making sure information is complete on documents, etc. A lot of our clients don't even know they have problems – they don't review documents because they rely on their LOS and thinking it will catch everything – until they are pointed out by their investors and/or QC vendor after closing. There have also been a lot of hiccups with LOS updates since TRID. LOS vendors are trying to fix things that broke originally and in the process broken new things that previously worked – creating a whole new set of issues for mortgage lenders. Tip: don't rely entirely on your LOS to capture information as it does not automatically result in your being 100% compliant.
Another common issue is with data integrity. We're not sure how important this is yet, but it creates a domino effect: if one doesn't enter data into the system properly, it creates a chain reaction through the rest of the file, like the address of a borrower being incorrect or not listing services on a service provider list.. These issues end up being a finding on quality control reports. It’s also important to document everything. Not doing so may not be seen as outright non-compliance because these issues are usually caught in the underwriting and closing process but it's better to resolve them upfront rather than rely on someone else to catch errors later on in the process.
Reminder: the CFPB simply wants you to operate in good faith, acknowledge errors and correct findings going forward.
TRID Findings Top 10
|Evidence the borrower was provided the Home Loan Toolkit within three (3) general business days after receiving the borrower's application was not included in the file.
Note: This is the top TRID findings by far and is usually because they're not documenting that they did give it to the borrower.
|There is no evidence a Risk Based Pricing Notice was provided to the borrower.|
|Evidence that the Closing Disclosure was provided to the seller at or before consummation is not included in the file.
Note: This is a big one for our clients: lenders aren't required to give the seller the closing disclosure, title person is, but lenders are required to ensure the title company does.
|A column for services and fees were included on the Settlement Service Provider List; however, no specific services or fee amounts were given for the providers listed.|
|Settlement Service Provider List was not provided in the file for review.|
|Closing costs expire less than ten (10) general business days from the Date Issued on the Loan Estimate.|
|Evidence of borrower's Intent to Proceed was not provided in the file.|
|Appraisal was ordered prior to borrower's acknowledgment of Intent to Proceed.|
|An address for the Seller was not included on the Closing Disclosure.|
|Amount listed for the Estimated Taxes, Insurance and Assessments on the Closing Disclosure does not match the amounts cited on the Final Application (1003).|
If you have issues with any of the above TRID mortgage compliance defects or findings, or don't know if you do, let us know. We can even audit your internal auditors to see how they're doing.