The Broader Impact Of TRID

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TME-TGarritanoAs the TRID deadline approaches we are all wondering what the industry impact will be. Will it be Armageddon? Or will it be a blip? One thing is for sure, the industry is grateful that the CFPB delayed the deadline from August to October.

“The level of complexity makes readiness hard,” said eLynx President and CEO Sharon Matthews. “We are ready, but the lender has to be ready, and other parties have to be ready, as well. The CFPB should have a parallel deployment that starts before October so lenders can test and use the new disclosures early to truly know if they are ready, that would increase the quality of the outcome once it’s mandatory.”

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eLynx recently launched an updated version of Expedite, its cloud-based platform for managing and delivering all loan documents. This release will enable lenders to comply with the CFPB’s upcoming TILA-RESPA Integrated Disclosures (TRID) rule. Expedite is used by thousands of lenders and settlement services providers across the industry.

New functionality includes:

>> Full document generation of Loan Estimate and Closing Disclosure documents;

>> Direct bi-directional integration with third party fee providers and title production systems that automates the collection of fee information from different sources;

>> Data extraction service that eliminates the need for manual data entry even when direct integration between lenders and settlement agents is not possible;

>> Fee determination features that allow lenders to compare the fees side-by-side, select the appropriate fees to include in the Closing Disclosure and document the different fees and actions in a fee reconciliation report;

>> Real-time alerts when there are potential compliance issues;

>> A fully integrated audit trail that documents TRID compliance; and

>> Two-step authentication and other security enhancements.

The good news is that many players within the space are trying to educate lenders and vendors alike about how to be ready for TRID. For example, Vantage Productions, a leading innovator in customer relationship management (CRM), marketing, sales and content solutions, hosted a free one-hour webinar earlier this year aimed at preparing senior managers and lending executives for the TILA/RESPA Integrated Disclosures (TRID) industry-wide implementation. Attendees received a detailed implementation worksheet and other useful tools to help them prepare.

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“The vendors are ready but I think the full readiness of lenders is up for grabs,” noted Sue Woodard, President and CEO at Vantage Productions. “Lenders will find themselves in a lot of trouble if they feel like this onslaught of new regulation is a passing fad and don’t dedicate the resources necessary.

“Second, leadership can be deficient, especially when interacting with sales staff. It reminds me of a parent that hates to hear their kid cry so they won’t take them to the doctor to get needed vaccinations. There are too few lenders focusing on boldly leading all their people, instead they are working around the concerns of their people.”

Certainly it seems like most lenders are looking for a band-aide approach to TRID compliance instead of taking a deeper dive and actually looking to improve their overall process. Those lenders that think holistically will be the winners after the dust has settled on TRID. For example, Security National Mortgage Company (SNMC) of Salt Lake City, Utah turned to Vantage Productions to centralize marketing, compliance and sales process management for its national network of retail origination branches.

Like many mortgage lenders, SNMC was concerned about standardizing and controlling messaging for Realtors and consumers to ensure compliance with CFPB requirements, as well as making sure that loan officers were utilizing the best possible materials across the country. SNMC was founded in 1993 as a subsidiary of the Security National Financial Corporation, which began in 1965 as Security National Life Insurance Company and has invested in mortgage loans for almost 50 years.

“As a company that started from humble beginnings, we have grown and succeeded over the decades by providing very personal service to our customers,” says SNMC Chief Marketing Officer Michael Shehan. “It was absolutely essential that we continued to offer the best possible borrower experiences while making certain that SNMC was fully compliant with the new regulations surrounding customer communications. With 80 branches across the country, we turned to Vantage Production to centralize this effort with VIP’s content and workflow, vastly improving control and messaging across our network,” he says. “Additionally, we offer a broad range of home loans due to our very well established relationships with mortgage investors, so not all of our loan programs are the standard products offered everywhere. We needed flexibility with differentiated program specifics for our sales force, and VIP creates outstanding presentations on every possible loan product,” he notes.

While a lot of focus is put on the lender and their technology partners, the real point of TRID was to improve the consumer experience. “The other thing to consider is the consumer,” reminds Stan Baldwin, Chief Operating Officer, Informative RESEARCH. Founded in 1946 and based in Garden Grove, California, Informative RESEARCH has grown from a local credit reporting agency to a national data and technology company providing a broad range of risk management products to the financial industry. Informative RESEARCH is a privately held company, known for its innovative approach to industry solutions via analytic data applications. The company is a Tier One credit reporting agency, providing proprietary tri-merge credit reports along with a broad variety of other risk management solutions for lenders and servicers, including pre-qualification, fraud detection, and credit score management tools. Informative RESEARCH is a preferred provider to the Lenders One Mortgage Cooperative.

In advising smaller lenders on the best way to prepare, Baldwin says, “they might want to pull together their resources with other lenders and join a consortium like Lenders One. In general, lenders need to rethink their process. We need more innovation to help lenders improve and gain efficiencies.”

In the end, compliance can actually be a plus for a lender. “Compliance should be a competitive advantage,” pointed out John Lawson, Chief Compliance Officer at Commerce Home Mortgage. He has more than 30 years of experience in the areas of consumer compliance, audit, accounting, finance, operations, and information technology in the specialized financial services and banking industry. Lawson’s previous work experience includes the Federal Reserve Bank of San Francisco, Bank of America, E-Loan and Union Bank.

“Getting back to fundamentals is key. If you are not documenting your controls, you are in trouble,” added Lawson. “Compliance is so abstract. Each regulation compliments another one, but if you don’t see that you will run into problems. You need training and legal support. You can’t interpret everything every time you come across something. Lenders may hire a guy that’s good at one thing, but not so good at other things. You need a suite of people that are good at a lot of things. If you under fund your compliance folks and your training, you are going to be in big trouble.”

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