TRID has been all consuming for the past two years now. Top executives gathered at the Fifth Annual ENGAGE Event to discuss what happens now. What will the mortgage industry be like now that TRID is a reality?
“I think we’re going to have regulation by litigation. The CFPB isn’t interested in lenders, they’re interested in the consumer,” answered Rebecca Walzak, founder of rjbWalzak Consulting. “So, lenders need to start thinking about how they interact with the borrower. A Peanuts character used to say, I love humanity, it’s people that I can’t stand. Similarly, lenders have to ask” What have I done for the consumer?”
And make no mistake, TRID has been all encompassing. On the property preservation side of the business, big changes have been necessary said Tom Kalas, legal counsel for Five Brothers. “The regulations have forced us to change how we operate. We document more. We attend more onsite audits. It’s a lot more expensive to conduct business. And I think that things will get more intense in terms of new regulation and enforcement throughout mortgage lending.”
Even the appraisal sector has been touched by TRID. “The verdict is still out on the best way to handle appraisal fees now,” explained Jennifer Miller, president of Mercury Network. “With appraisal fees, you have a general idea. But now you have to know the fee. And remember, depending on the property type and the geographic location, the fee is different, which will impact your TRID disclosures.”
In the end, lenders have to demonstrate that they are making an effort to comply, said Amanda Phillips, senior legal and compliance lead at Accenture Mortgage Cadence. “Initial audits by the CFPB will focus on the lender’s intent to comply. From there, the fines will start.”
“Going forward, the next big regulatory hurdle is going to be HMDA, according to Phillips. “HMDA is next for the CFPB. We all have to think: What are they going to do with that data? With all of that data at their fingertips they will have an informed opinion about the lender even before they walk in your office to perform that audit. So, lenders have to know their data and they have to be able to explain it.”
So, how does the industry cope with the CFPB? “We have to automate more, noted Walzak. “We need websites and other platforms to focus more on the consumer. We need to show them that we are out there for them. We need them to know that we are not going to put them into a loan that they can’t afford. We need to educate them about the process. We can’t fear the consumer, we have to use technology to both improve our process and become a trusted advisor.”