On Thursday, April 28, the Consumer Financial Protection Bureau (CFPB) issued a letter to mortgage industry trade groups regarding TRID compliance and the "Know Before You Owe" rule as a result of feedback received before and during the recent 2016 Mortgage Bankers Association (MBA) conference.
CFPB TRID Comments
Here is an excerpt from the CFPB letter from director Richard Cordray: "We recognize that the implementation of the Know Before You Owe rule poses may operational challenges. We also recognize that implementation is particularly challenging because of the diversity of participants, from small to large financial institutions, mortgage brokers, real estate brokers, and title companies, through warehouse lenders, investors, due diligence forms, and ratings agencies, whose perspectives may vary as to what compliance under the rule requires.
"We do recognize that incorporating some of the bureau's existing informal guidance, whether provided through webinar, compliance guide, or otherwise, into the regulation text and commentary, would be helpful. We also believe that there are places in the regulation text and commentary where adjustments would be useful for greater certainty and clarity. Accordingly, we have begun drafting a Notice of Proposed Rulemaking on the Know Before You Owe rule. We hope to issue the NPRM in late July and look forward to your comments on it then. The Office of Financial Institutions, along with our Regulations and Markets team, will arrange one or two meetings in late May or early June, but before the NPRM is issued, to discuss further with you the Know Before You Owe rule. In the meantime, we look forward to continuing to receive your detailed feedback on the implementation of the Know Before you Owe rule."
Mortgage Industry Comments
From the National Mortgage Professionals (NMP), "The CFPB has quietly informed the financial services industry that it has acknowledged complaints and concerns relating to the TILA-RESPA Integrated Disclosure (TRID) rule and plans to seek their input on making updates to this federal policy."
From HousingWire: "In a huge win for the industry, the CFPB is taking another look at the Know Before You Owe rule, answering calls to make official a lot of the informal guidance given by the bureau... Up until this point, the industry has been continuously told that 'examiners will be squarely focused on whether companies have made good faith efforts to come into compliance with the rule'... But this wasn’t enough for some companies in the industry, especially investors, since guidance was never made official. Rather than lenders facing time-to-close issues, it is the secondary market that seems to be experiencing the biggest pain points from TRID at this point."
From CU Today: "Both NAFCU and CUNA applauded the CFPB's announcement that it will
initiate rulemaking in late July to address many of the ongoing issues
and concerns over the implementation of the TILA/RESPA Integrated
Disclosures (TRID)... NAFCU, CUNA, the Mortgage Bankers Association and five other trades wrote CFPB in January to seek clarification on the rule.
Cordray responded that the bureau hopes to issue the NPRM in late July."
MetaSource Mortgage Compliance Comments
While there is not yet an understanding of what the TRID revisit will entail, we at MetaSource feel this is a positive sign that some of the confusion and challenges currently facing the industry when implementing TRID rules may be alleviated. Bookmark our blog and check back soon for more updates.