Several mortgage and housing trade groups have requested that the Consumer Financial Protection Bureau (CFPB) go a step further in cleaning up the agency’s TRID consumer-disclosure rules, the increased regulation that took effect one year ago.
Industry groups are asking that the bureau extend a ‘soft enforcement’ period for several months, and proposed changes that the CFPB had previously declined. For example, the industry wants the bureau to establish a way for companies to correct errors found in the documents after the loan has been originated. This would help protect a lender from legal liability should the loan ultimately default, and reassure issuers of mortgage-backed securities. TRID errors have shown up in recent loans that were to be collective into securities.
Industry groups also requested the bureau give lenders more flexibility around the time of the closing. TRID has largely forced companies to lock in mortgage rates and the consumer’s expenses three days before closing. The CFPB has proposed to allow companies to make adjustments of the loan costs in the final closing document, but the industry has requested further modifications.
The industry is asking for numerous technical changes that will clarify aspects of the rule.
TRID, or the TILA-RESPA Integrated Disclosure rule, took effect on Oct. 3, 2015, creating new streamlined forms on the initial rate disclosure and final closing documents. It also established a timeline for disclosures. The rule was intended to make it easier for consumers to understand, but the changes created huge technical challenges for the industry. In April, CFPB announced it would make changes to TRID using the industry’s input.
The Mortgage Bankers Association, the National Association of Realtors and other groups submitted separate letters ahead of the deadline, including their comments and suggestions. The CFPB is expected to publish a final rule sometime next year.
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Related Resources: Scotsman | Guide: The Leading Resource for Mortgage Originators