While there have been a wide variety of reactions to the implementation of the TILA-RESPA integrated disclosures (better known as “TRID”), many of the responses have been favorable. In spite of some issues regarding the technology that underscores the new forms, most agree that the implementation process has proceeded smoothly.
Reports from within the industry describe a relatively painless rollout for TRID as far as internal disclosures go. Darrel Bilbrey, CEO of CrossCountry Mortgage Inc., said, “The Loan Estimate part is going well. Now we’re going through the Closing Disclosures. It’s a learning curve. There’s still a lot of manual workarounds. The next three to six months, we’ll be focused on automating those.”
CrossCountry issues Closing Disclosures to several national title services. They claim that many of the title companies they work with are not ready for the Closing Disclosure, which requires they provide extra training and educating on the process. The company believes it’s important to get the system right. “It’s our documents, our compliance, or legal responsibility and we take that very seriously,” Bilbrey said.
Richard Horn led the final rulemaking process for TRID while serving as senior counsel and special advisor for the Consumer Financial Protection Bureau (“CFPB”), and he believes technology will pose the biggest challenge for those in the industry. While he does laud some software designers for spending the resources and time to prepare TRID-compatible software adequately, he cautions that there are still errors being produced by these systems.
According to Horn, “[T]here are some software vendors that have put the time and resources and have gotten it right. But there are technology problems out there.” The complicated disclosure rules seem to have made it difficult for some LOS systems to replicate the data accurately.
The CFPB has received a variety of complaints from vendors that have still not mastered the new rule. However, the CFPB stresses that while they recognize that certain companies have already devoted significant resources to the implementation of the rule, it is confident that vendors soon will be capable of fully implementing the rule.
CFPB representative Sam Gilford said, “We have not advised lenders to avoid using particular vendors… market participants should focus on making loans in compliance with the rule.”
For his part, Horn has made himself available to assist companies with the implementation of TRID. Horn underscored his concern that individual companies may not have the resources to double-check calculations for regulatory compliance themselves, and thus become dependent on the competence of their software to catch any errors. This lack of resources could result in companies sending out erroneous information on the disclosures.
Horn urges lenders to have a backup plan in the event their software is not working as advertised. He warns that that CFPB will expect them to address the problem by either contracting with a new vendor or canceling the existing contract in pursuit of remaining compliant.
Some software vendors are scrambling to update their software to include new rules being issued by the CFPB. This backlog has created some havoc within the industry for closing agents who have yet to master the software. The vendors have tackled the problem by requesting companies contact the programmers directly when issues with TRID compliance arise, allowing them to code specific solutions to issues on the fly, thus ultimately creating software prepared for any TRID eventuality. While this tactic may result in a cavalcade of programming requests at the outset, it should eventually produce a finely tuned product to help ease the stress of closing agents struggling with the new system and rules.
According to an industry professional, settlement agents continue to report frustration at the unfamiliarity with the process. The short implementation time has caused a bit of stress within the closing process, and it appears to be reverberating throughout the lending industry. Trying to get monthly closings completed on time, with the added stress of learning a new software system while implementing new disclosure rules, is causing some concerns.
The good news is that many vendors have already seen their efforts at TRID compliance rewarded by positive reactions from customers regarding carefully prepared TRID compliant closing instructions. Some customers have reacted positively to the new standards established by TRID, and while the process is far from complete, it represents a strong first step towards full TRID implementation and compliance. It will take many more months of alterations and updates, but for now, the system seems to be rapidly evolving.
