TRID explained

TRID Explained: By Former CFPB Regulator

Navigating the TILA – RESPA Integrated Disclosure forms can be a daunting task, even for the most seasoned compliance professional. Among other regulatory changes, these rules are set to go live this coming August, a mere five months away.

Highlights from Our TRID Regulations Webinar

To address these changes, ATS Secured and ABS hosted a webinar today featuring Ben Olson, former Deputy Assistant Director for the Office of Regulations at the CFPB. Ben spoke on the complexities of TRID and best practices for compliance. While at the CFPB, Ben led the formulation of the TRID rule and today advises on the implementation of the final rule in private practice.

TRID’s Purpose

The TRID rule is going into effect to provide clear language and design to make it easier for consumers to locate key information. Consider this the first of many new regulations aiming to make the industry more consumer-friendly.

Key Changes TRID Brings

The key changes that Ben spoke on included how the GFE and initial TIL will be replaced with the Loan Estimate, and that HUD-1/1A and final TIL will be replaced with the Closing Disclosure.

The Closing Disclosure must be provided three days before closing, requiring additional work earlier in process. The lender is now responsible for errors in the settlement agent’s preparation of the settlement disclosures, creating private liability and vendor management risk. The rule applies to most closed-end consumer mortgage loans, although it establishes different requirements for timeshares and construction loans.

Systems used must be able to track the application date and provide the correct disclosures. If an application is received on July 31st, the old disclosures must be used. If an application is received on August 1st, the new disclosures must be used. Lenders must be able to “flip the switch” so to speak, on August 1st.

Don’t Procrastinate TRID Compliance

In his speech to NAFCU in September of 2014, CFPB Director Richard Cordray said, “Although these forms are not required until August 2015, mortgage lenders should already be working on the new rule and getting ready for next summer. Implementation of the new rule will require significant changes to business operations and technology platforms, which may require close collaboration with third-party service providers.”

The CFPB has also stated that lenders cannot expect an extension past the effective date or leniency once the rule takes effect.

These regulations will require more than a simple form or software update—they signify that serious changes are in store for the mortgage closing industry. All entities involved in a closing will need to be ready for TRID by August 1, 2015, or suffer serious repercussions.

Want to make your mortgage process easier and more accurate? Contact ATS Secured today.

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