Whatever the CFPB declares as the final deadline date for TRID, lenders will still be under intense pressure to comply. Lenders that have started to implement and test their TRID solutions are quickly realizing that TRID is about so much more than just a new disclosure or a new document for the borrower to sign.
In the current regulatory environment, especially under the Consumer Financial Protection Bureau (CFPB)’s TILA-RESPA Integrated Disclosures (TRID) rule, the lender is responsible for accurate and timely delivery of key disclosures to the borrower.
Historically, the lender prepared early disclosures, often without collaboration with the settlement agent, and the settlement agent carried the burden of preparing the HUD-1 Settlement statement. Now, due to the strict tolerances on fees and high potential fines to the lender, most lenders are preparing the new forms (Loan Estimate and Closing Disclosure forms) themselves and requiring information from the settlement agent earlier in the process.
Today, the collaboration is often via phone or email and not centralized or audited. Since the lenders are on the hook for completing these forms correctly, they need stricter controls and more streamlined processes to reconcile data among the lender’s main system, the loan origination system (LOS), and the settlement agent’s system, the title closing system. In essence, this is changing lending as we know it.
This is forcing lenders to look at their lending processes in a completely new way. That new way of looking at their mortgage process requires a lenders solution provider to deliver the following to effectively address these TRID requirements:
>> An electronic collaboration service that connects lenders, settlement agents, and counties, making electronic collaboration possible from loan application through final title policy delivery. The service should provide a platform for collaborating on fee data, documents, and transaction details. With the TILA-RESPA changes, being able to connect lenders to their settlement agents is more important than ever to get the fee collaboration and transaction details right. A solution that also goes the last mile to connect in the counties with an e-recording component satisfies ALTA Best Practices #4 and #5, among other benefits.
>> An independent and open service that is integration-friendly. This allows all parties in the transaction to have the ability to share changes, updates, deficiencies, and statuses within one system, making it easier to audit and ensure compliance.
>> A post closing/post tracking service that provides the visibility into the settlement agent processes after closing, along with the reception of recorded documents, fee data, and final title policy. Many solutions end at the closing process, which is why trailing documents continue to be an industry pain point. Lenders need to know where the documents are and what happens to them after closing.
To meet the CFPB’s TILA-RESPA Integrated Disclosures (TRID) rule, lenders must reimagine their lending processes and the collaboration needed to effectively comply. The right TRID solution will change the way people work every day, providing them with information and data that they have never had access to in real time.
About The Author
Paul Clifford is President of Simplifile. As President, Paul manages all aspects of Simplifile’s corporate strategy. Recognized as an e-recording industry founder, Paul frequently presents at state and national industry trade shows and conferences. Prior to founding Simplifile, Paul served as the Director of Corporate and Strategic Planning for iLumin Corp., where he was responsible for researching, modeling, and creating strategic business plans and projects, including an automated mortgage transaction initiative for Freddie Mac and Fannie Mae.