Where Do We Go From Here?

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TME-TGarritanoSTRATMOR Group, a consulting firm that helps mortgage banks build profitable mortgage lending operations, announced that the results of a recent PeerViews Survey on the industry’s readiness to comply with the CFPB’s new TILA/RESPA Integrated Disclosure (TRID) rule confirms that lenders would not have been ready to comply with an August 1 deadline. Survey data indicated that, as of the end of March, many requirements of the new rule had not even been considered by an alarmingly high proportion of lenders.

“Lenders felt like they were ready, but when asked for specifics about how certain TRID-related tasks would be handled internally, they didn’t have good answers,” said Dr. Matt Lind, STRATMOR Group’s Managing Director. “This suggests that many lenders may be missing key elements of TRID compliance, particularly in regard to process change, that would have constituted a significant risk if CFPB had not set back its deadline.”

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CFPB said earlier this month that an administrative error led the Bureau to set back the deadline for compliance with the new TRID rules until October 1, 2015. Given the data STRATMOR uncovered in its survey, this was a fortunate decision for the industry.
STRATMOR’s PeerViews survey revealed an alarmingly high percentage of survey respondents that had not even considered or decided on the following compliance issues at the time of the survey:
>> Who will generate and send out the Closing Disclosure?     13.5%

>> When will the Closing Disclosure be issued?  26.1%

>> Handling of Post Closing review  26.4%

>> Scripting of LOs and fulfillment personnel         41.8%

>> Preparation of initial Loan Estimate (wholesalers)      23.3%

>> Post Closing repair procedures   34.5%

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STRATMOR’s PeerViews program is a fast turnaround, small-survey program that gives senior mortgage executives a unique way to obtain specific qualitative mortgage industry information. All PeerViews surveys are conducted as “blind” surveys, with results aggregated to protect the privacy of participants. PeerViews participation is complimentary during this special introductory period. Full results of the survey are made available only to survey participants.

Regardless, many have prepared long and hard to be ready for the TRID deadline. For example, DocMagic announced that the CFPB’s proposed delay will have no bearing on its plans to be ready to meet the CFPB’s originally planned Aug. 1 due date to implement the TILA-RESPA Integrated Disclosure (TRID) rule.

“The CFPB only stated that they will be issuing a ‘proposed amendment’ to delay the rule to Oct. 1, which means it could possibly finalize a shorter time period,” commented Rich Horn, TRID legal advisor to DocMagic and former senior counsel and special advisor at the CFPB. Mr. Horn led the 1,888 page final TRID rule and the design and consumer testing of the new mortgage disclosures. “Lenders would be wise to keep their foot on the gas and proceed with their TRID implementation work, and DocMagic gets that,” said Horn.

“DocMagic has been working very closely with our clients, LOS partners, industry experts and other mortgage entities to be absolutely 100 percent certain that we are TRID compliant by the original Aug. 1 date,” said Dominic Iannitti, president and CEO of DocMagic. “The CFPB’s announcement about the proposed delay will not change our momentum.  All of our systems will be TRID-compliant come Aug. 1 ranging from loan document production to LOS integrations to our new Collaborative Closing Portal, SmartCLOSE.

Similarly, Mortgage Builder says that its Architect loan origination software product has been updated to assist clients with compliance with the impending TILA-RESPA Integrated Disclosure (TRID) requirements for loan originations, processing and closing. Architect 5.0 addresses compliance with TRID.

“TRID compliance is a subject of great concern for our customers, and while achieving compliance can be complicated and challenging, it is absolutely achievable,” said Lawrence Alston, General Manager at Mortgage Builder. “We’ve devoted substantial time and resources to studying the rules and updating our software, and we’re now working closely with mortgage bankers to help them prepare for the October deadline through a combination of technology and education.”

Surely a lot of industry players are working very hard. Regardless of the deadline I hope that lenders and vendors alike stand up and show the world how great the mortgage industry is.

How do we do that? By being ready on day one for any and all changes that the CFPB or any other regulatory body may cook up.

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