As the industry moves ever close to the August 1 deadline, the TILA-RESPA Integrated Disclosure (TRID – another industry acronym to learn) has been the topic of conversation in hundreds of articles, multiple media outlets and conveyed in a myriad of different ways. Some may even say that it has been a daunting task with the staggering amount of information to sift through, decipher and digest.
With that being said, let’s take a deeper look into the TRID topic and the massive change it will cause to lenders and vendors alike. The discussion begins with the MISMO 3.3 rewrite as well as a lender changing and choosing a document service provider that will meet the requirements for 2015 head on – change being the operative word and the fear that seems to come along with it. Why is that?
First – MISMO 3.3 Data Standards Change
The days of documents being the most critical element of the loan package are outdated and are no longer the show case. Now the emphasis is on the data, particularly in the eyes of the investor and the regulators which is a big concern for the lending community. The adoption of MISMO 3.3 may not sit well with the industry as it poses a complete rewrite of the MISMO standards that we once knew, but the benefits are numerous. Prior to MISMO 3.3 and with other MISMO 2.x standards, every system handled the format slightly different causing issues with data integrity, data transfer and compatibility between systems, and difficulty in streamlining that process.
MISMO 3.3 allows for consistent, accurate, and clearly defined data elements and naming conventions. The challenge is that it will require quite the effort to program to MISMO 3.3 even to add the additional elements necessary to MISMO 2.6 to meet the requirements of TRID. This data standards / technology change is the most significant we have seen to date, catapulting lenders and vendors in brand new territory never chartered.
Second – Fear of Change Itself
A direct result of TRID coupled with MISMO 3.3 is the fear of change itself. The days of lenders and vendors succumbing to “that’s the way we’ve always done it” are long gone. It is simply too risky not to change. Those organizations who were resistant to change because of not wanting to re-program, re-train staff members, loan officers or closers or IT unwilling to make the leap and take necessary action to do what was necessary are a thing of the past.
It is now time to change the mindset in those shops, eliminate the fear and embrace change. The decision to choose a document service provider needs to be holistic across the organization and buy in from the top down that will carry them up to, through and beyond August 1st. Once a decision has been made with a provider who can keep that organization in compliance, defend what they do and deliver the necessary technology in tandem with a streamlined process, the onus of risk on the lenders’ part is eliminated. There should be no disparate systems to pull data and documents together – one single document provider is the change and should be embraced, not feared.
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