The top 15 mortgage quality control issues in 2018, as compiled from tens of thousands of post-close QC audits that we performed over the past year, show lenders still struggling to consistently comply with enhanced disclosure requirements instituted by the Consumer Financial Protection Bureau (CFPB) in 2016.

In the third full year of the new requirements posed by the TILA-RESPA Integrated Disclosures (TRID) rule, our audits show three of them in the top 5 quality control findings, where they have been lodged from the beginning. The number of these regulatory issues remained steady in 2018 even as a decrease in the number of mortgages led to a drop in the volume of audits.

"Despite everyone's understanding of TRID and efforts to correct for it, we're not really seeing the improvement we should be seeing," said Brady Meadows, Strategic Account Manager at MetaSource.

Meadows says the findings suggest that lenders may be juggling too many versions of documents as circumstances change, leading to lost or conflicting records. Some lenders, he said, reissue documents for every small change, creating multiple re-disclosures "when it's not necessarily required." he said.

With 2017 behind us, here is a look back at the top 15 mortgage quality control issues based on tens of thousands of post-close QC audits that we performed over the past year.

In their second full year of adjusting to the Consumer Financial Protection Bureau's (CFPB) enhanced disclosure requirements, lenders managed a better track record of compliance. Only six of the top 15 findings were related to the TILA-RESPA Integrated Disclosures (TRID) rule, down from 12 of 15 in 2016, the first full year of the rule's implementation.

Even so, the results suggest that lenders are still in the learning curve as TRID defects accounted for the top six findings on the list.

MetaSource Study Finds 12 of Top 15 QC Issues Were TRID-Related

Salt Lake City—Mortgage lenders found the federal "Know Before You Owe" mortgage disclosure rule—formally known as TRID—to be the source of most of their quality control (QC) headaches in 2016, the first full year of the rule's implementation.

TRID accounted for 12 of the top 15 findings of quality control (QC) issues in 2016, according to a review by MetaSource of thousands of post-close QC audits conducted by the Utah-based third party mortgage compliance service provider.

With 2016 in the books, here is a look back on the top 15 mortgage quality control issues based on thousands of post-close QC audits that we performed over the past year.

All but three are compliance and TRID related. While we did see a slowdown in TRID findings as the year progressed it does illustrate the impact these regulations have had on the industry.

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.

Overall Findings

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.

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.

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.

While many mortgage loan originators are focused on upcoming TRID rules that go into effect in October 2015, many are unaware of important changes to the Mortgage Electronic Registration System (MERS) rules of membership that include penalties for not adhering to their mortgage registration and transfer requirements.

New TILA-RESPA integrated disclosure rules (TRID) are tricky to condense because the rule runs almost 2,000 pages. However, that is why you turn to MCA. In this blog post, we will explain what TRID replaces in a loan file and what you should do about it.

Loan Types Affected

TRID is pursuant to the Dodd–Frank Wall Street Reform and Consumer Protection Act passed in 2010, which is now administered by the Consumer Financial Protection Bureau (CFPB). TRID applies to most "closed-end" loans made on or after August 1, 2015 that are secured by real property. These are loan types that are exempt from TRID:

The CFPB has published proposed changes to the TILA-RESPA Integrated Disclosure (TRID) Rule. For more information click here.