The Trials & Tribulations Of TRID
TILA-RESPA Integrated Disclosures Are Coming! One If By Land! Two If By Sea! Three If Making Everyone Crazy!
Housing Wire does not recommend planning any summer vacations this year if you are in the mortgage lending industry.
With the new TRID mortgage disclosures this August, you are probably preparing for managing the most significant revisions you’ve ever had to make to your businesses processes. The scope of these new rules is tremendous and include much forethought and training.
The official Home Loan Toolkit brochure you are required to use doesn’t explain “form rounding” or the inclusion of mortgage obligations never before included on a GFE. Loan Officers are facing a whole new round of questions regarding the new forms. With TRID, there is no concept of “over-preparing” – we recommend making a detailed comparison for the impact on your tolerance verifications, investor overlays, and fee information for points and fee testing.
However, Loan Officers are not the only ones changing their processes. In addition to builder, realtors, and marketers that now have new procedures, DON’T FORGET YOUR ACCOUNTING DEPARTMENT! Your reports for accounts payable, commissions, accounts receivable, the general ledger, and so much more may need to be modified since there are no static line numbers on the new forms.
According to a survey conducted by Lenders One, the national alliance of community mortgage bankers, more than 68% of mortgage banker respondents said their top challenge in preparing for the new TILA-RESPA Integrated Disclosure rule is its actual impact on the processes required to deliver the loan estimate.
“This is where the challenge comes for the broker: Once the broker gives the Loan Estimate, whomever they register that loan with, whatever lender, is bound by that Loan Estimate,” said Mike Vitali, senior vice president and chief compliance officer at Loan Logics.
Regulators have been keen on implementing better controls around the prices lenders quote for third-party settlement services on consumer disclosures. Under the new TRID requirements, there is no room for error in the prices quoted up front on the Loan Estimate and the final costs outlined in the new Closing Disclosure that’s replacing the current HUD-1 settlement statement and final TIL disclosure. Any amounts above the originally quoted prices are the lender’s responsibility.
The new regulations stipulate that as soon as the borrower provides the six pieces of application information the process starts immediately to give the Loan Estimate.
- the consumer’s name
- the consumer’s income
- the consumer’s Social Security number to obtain a credit report (or another unique identifier if the consumer has no Social Security number)
- the property address
- an estimate of the value of the property
- the mortgage loan amount sought
Over the next few months, as you continue to read through the 1,888 pages, commentary, guides, forums, attend seminars and training make sure that you don’t get lost and remember to explain to everyone in your organization what you know, and help your peers understand the new rules.
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